Did Your Employer Miss Payroll? Act Now to Protect Yourself

Did your employer fail to pay employees at the scheduled time? Fortunately, few employees will ever have to deal with this. But if you are one of those unlucky few, your next steps are vital for securing the compensation you are due as well as for protecting your financial future.

To help you navigate a difficult situation like this, here are five things to do as soon as your employer misses a payment.

1. Document Your Efforts

Your first step is likely to create a written record with your employer (if they have not taken proactive steps to talk to employees) about the problem. You'll need to document your efforts to inform the company of any problem and their response.

The best way to document anything is, of course, to do this through email or other written communication. Email exchanges work best – be professional because a Judge or Jury might see it later. If you choose to have a conversation with the Employer’s managers, make sure to have another person in the conversation to serve as a witness.

2. Understand the Seriousness

A company who has failed to make payroll will often downplay the problem. But don't be misled into thinking that this is just a minor hiccup. Payment of employees (and associated payroll taxes) is governed by law and carries stiff penalties for noncompliance. For this reason, most struggling employers will do everything possible to reduce expenses, increase income, or put off payments before they miss payroll.

So if your company has reached the point where it is risking fines, penalties, and legal actions, the situation has probably become dire. While this could be a single error or one-time budget issue, treat it like a serious problem until you are fully satisfied that it is not.

3. Consult an Attorney

If your employer fails to provide compensation to employees immediately, the best way to protect yourself is to meet with an attorney versed in wage and labor issues. And because this is a matter of money needed to continue living your normal life, you'll want to take action as soon as possible — even in as little as one week.

Your attorney may advise you to pursue a claim through the court system for failure to pay the Federal Minimum Wage and State Law wage claims (often called Work & Labor or Quantum Meruit). Usually, if you win this case, your employer will be made to pay your legal fees as well.

4. Report the Matter

At this point, you and your attorney should determine the best way to report the employer to the appropriate oversight agency. Most states have laws about wage payment which are overseen by a state labor board, but Alabama does not. You can contact the United States Department of Labor.

Some states set their own rules while others — including Alabama — follow the federal rules in the Fair Labor Standards Act. While there are no specific payment schedules in the FLSA, courts have agreed that companies must abide by their set payday schedule or risk legal action on behalf of employees.

5. Consider New Employment

If you have had to fight this hard to receive one or more paychecks that were due, don't continue this tenuous relationship. The situation is usually unlikely to get better soon, and you don't need the stress that comes with an uncertain paycheck for your hard work. Most employees in your situation should dust off their resume and make efforts to find a better — and more stable — paycheck.

Even if the company does get back on track, assess your ability to continue working there. Do you have faith in your employer's ability to continue paying the bills? Do you believe in this employer's behavior? Are you proud of your work there? Will you be able to work with staff, managers, and ownership after pursuing legal or regulatory action? If you aren't sure, you can see what other options are out there.

Allen D. Arnold Attorney at Law  can help. Call today to speak with one of our employment law professionals about your situation. The sooner you act, the sooner you'll get what is owed to you.

Alabama Rules of Professional Conduct Notice: No Representation is made that the quality of legal services offered is greater than that of other lawyers. The information contained on this website is not a substitute for legal advice, and reading it does not create an attorney-client relationship.