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

UPDATED: Jun 9, 2011

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Jun 9, 2011Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

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


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption