What can I do if my boss is not paying me because the company is broke?

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What can I do if my boss is not paying me because the company is broke?

My current employer has not paid me for 2 weeks and will not be paying me tomorrow. Even when he is able to pay me, I don’t think he’ll have enough to give me the entire amount that I’m owed. Do I have any immediate recourse such as filing for unemployment? Also, will I get in any trouble with my taxes because of this? Note: This is not the first time that this has happened, but he has in the past been able to get completely caught up on payroll.

Asked on June 9, 2011 under Employment Labor Law, New Jersey

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Legally, the company has to pay you--being broke is not a "legal" defense--but as a practical matter, if he doesn't have enough money, you won't be paid.

You can't file for unemployment if you keep working there. You may be able to sign if you claim you've been constructively, or effectively, fired, since you're not being paid--but if you then do additional work after the date you claim you were constructively fired, that may be unemployment fraud. (Being paid for work done prior to the date you claim you were terminated *should* not be a problem.)  Discuss the situation with the unemployment office--they are usually happy to try to answer questions like this. Find out the best procedure, timing, etc.

If the company is not an LLC or corporation (e.g. it's a sole proprietory, partnership, or d/b/a or "doing business as"), you may be able to sue the owner(s) personally for your pay, even if the company has no money.


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