If my employer failed to make payroll during our last pay period and we still have no promise of a pay date, what can we do?

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If my employer failed to make payroll during our last pay period and we still have no promise of a pay date, what can we do?

Today we were told we should have set aside 3 months of pay ourselves. She accepts no responsibility and is in the process of moving the company out of state. The business is getting economic development dollars down there. Our pay scale is well below the norm for our field (IT) and most of us are experienced degreed professionals with families. Many are overdrawn now and missed bill payments. She also is spending money as fast as she can on her credit cards, which is the root of our poor corporate situation. She is bi-polar and unwilling to take meds and is convinced she can do no wrong.

Asked on May 21, 2012 under Employment Labor Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

The employer-employee relationship is essentially a contractual  relationship, in that if the employee does the work, he or she must be paid as per the then-in-force rate or wage; in honoring his or her obligation to work, the employee binds the employer to honor the employer's obligation to pay.. There are no legal grounds for not paying employees for the work they have done.

If employees are not paid, they may sue the employer for the wages or salary they should have received. If a number of employees have not been paid, they could jointly retain an attorney. Based on what you write, a good idea would be to sue the employer NOW, before she spends all her money, ruins the business, or moves it out of state--all of the above would make it more difficult to collect, since regardless of legal rights, you can't collect money if there is no money available. Your attorney should probably also move for injunctive relief (a court order) barring her from moving the company or its assets and requiring her to at least escrow, or deposit with the court, funds to cover any judgment against her if you should prevail in her lawsuit and prove that she owes you money.

Forget though about whether you are paid less than the norm, or about your families--those factors may impact fairness, but they do not impact legal rights. Your right is to be paid the wage you had in fact been working for, whether it was a fair wage or not.


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