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Question

I am working with a start-up small business, since almost 2 years now. I am their longest and also the highest paid in-house employee which gives me some benefits. I am also the only professional in my specific section, cross-platform application development. They frequently tell me of internal company matters and like to hear my say on them. The work environment is lax and not strict at all.

Currently my November salary is due, they have paid the subsequent salaries but are dodgy about it. I have slowly incurred a debt, almost equaling the due salary.

Here are some pros and cons;

Pros

Apparently a very understanding and cool minded boss.

Say of the employee is valued and if an idea is termed beneficial, time is allowed to nourish it.

Package includes accommodation, 3 time meals and any utility consumption.

Overtime is paid double the base rate when company is doing good.

Cons

At least 2 hour mandatory overtime, if the company is doing badly.

Coordination issues in between management.

Pessimistic approach towards payment collection due to fear of losing clientele.

No HR department, so all concerns should be directly relayed to the CEO or the boss.

Thinking about leaving makes me very scared as there are very few such offices with such benefits. Also I am also going to do higher studies later this year, to which the company has allowed me to reduce my work time accordingly with same package.

Should I give them a warning, like pay me or I'll leave in a month? Finding another job wouldn't be difficult but for them to find another professional such as myself would be difficult.

As I haven't ever like resigned nor got fired (the previous employer pulled out due to security concerns), am not very confident but I have persevered too long already.

Update 1

I talked with the CEO, he said that as there are holidays in China so all the payments are delayed and when they'll get them, I'll get paid full. He said he can provide me with 1/4th amount by tomorrow, if its urgent...

I am in Pakistan, so I am not seeking legal advice as its not possible. Hiring a lawyer and trying for a legal solution will be more expensive than recovering my salaries and will take years!

@JoeStrazzere you are the first person to say such. Though it would satisfy my raging heart very much, it will burn all the bridges i have built with them. Considering they are also my seniors from university and the company is not very big on the market, I am conflicted at best. — Feb 4 '14 at 17:13
With Pro #3 are you saying that you get full meals and board ongoing + a stipend which has not been paid, or are you waiting on pay to cover basic housing and food? — Feb 4 '14 at 17:15
@bethlakshmi I am provided basic housing, utilities and food free of cost. The month they didn't pay me, I had to incur a debt to make ends meet with phone, internet bills and other costs. — Feb 4 '14 at 17:32
there are very few such offices with such benefits. Other offices have other benefits though - like paying you for doing your job. — Feb 4 '14 at 23:19
You are owed 3 months of work? After I am owed 2 pay checks I start looking for a new job. After 4 missed pay checks I start looking for a laywer. I do not work for free. Its a symbonatic relationship. I give you work product you give me money. — Feb 5 '14 at 19:46

score 5 · Accepted Answer · 2014-02-05 01:34:17Z

Apparently a very understanding and cool minded boss.

Apparently a very flakey boss, who as well as being genuinely cool-minded is passing some of that flakiness off as cool-mindedness.

I would hazard a guess that legally your employer is in material breach of contract, even if you don't have any realistic hope of enforcing the contract.

How understanding and cool-minded would they be if you just didn't show up to work for a few days and then wandered in? Don't do that of course (tantrums don't help), but that's about as cool-minded as you need to be about late payment. There is basically no excuse on earth for not paying what you owe and not telling the person you owe it to, on or before the date payment was due, everything you know about the reason for non-payment[*].

You don't need to be grateful to your employer for valuing your ideas -- it's part of what you're paid for, especially as a senior employee. Your ideas benefit your employer. So be glad of it but don't use it as an excuse on their behalf.

You should give credit for the general laxity, if it's unusual and it benefits you, and be somewhat lax in return. But that must be within reasonable limits, don't give them more credit than they're really due. Ultimately you aren't there for the lack of strictness, you're there to earn a living. So, you might well feel that since you value the company it's worth the risk of staying despite unreliable cash flow, and a reasonable chance that some day they'll run out of money entirely and you'll be left a certain amount out of pocket[**]. But you should assess it as a gamble and you should figure out how many month's pay you're willing to risk in this way before you cut your losses. To my mind that should be a small number -- partly because it's your living and partly because the more they owe you the more you can fall into the "sunk cost" fallacy. There are plenty of people in the world for whom it is 0, and I don't think there's any shame in being one of them.

You should not threaten to leave until you're actually ready to go, because you shouldn't make an idle threat. Aside from being poor behavior, it damages your credibility for the future.

You should let your employer know (not aggressively) that the unreliability is a real problem for you, both financially and in terms of your confidence for the future of the business. You could also ask if they're willing to make good the losses you've suffered as a result of late payment (that is, any interest or other costs associated with your debts). This will make sure they see the late payment as a problem for you and for them, not just something they can do with no risk and no cost.

You don't have to threaten to look for other jobs, they'll surely figure out that if you're not happy and they're not paying you on time, there's a chance you'll find someone who will. You should look around enough to be sure of your options if you leave. And if you decide you want to go at a point where they're behind on pay then you probably don't have to work notice if you don't want to -- but you might never get the back pay if you don't!

I talked with the CEO, he said that as there are holidays in China so all the payments are delayed

There is indeed a holiday in China, but it has not been going on since November! Beware when people explain why they can't do what they're supposed to right now, but not why they didn't do it when they were supposed to. It's a sign that it's just an excuse, not the real reason. If you still haven't been paid next week then increase your estimate of your boss's dishonesty/unreliability and factor that into whether it's a good place to work.

Personally I would only take the offered 1/4 pay if it would make a practical difference. Find out what date they expect to pay you, compare it to the dates of your bills or planned expenses. And remember the date they say -- if you're not paid on that date then you can use it to remind them that they have a problem they need to solve. If they can't give you a date they expect to pay you, maybe take the money to be safe.

[*] Actually I tell a slight lie, there is. If your company is negotiating for investment or other money coming in then they may be unable to to tell you the details or in extreme cases even the existence of the negotiation. But in good conscience they must at least admit on the day that they aren't paying you and they don't have the money. Preferably before.

[**] This has happened to me. I wasn't in debt, so I knew for sure I could afford the risk. Since I don't know what your employment market is like, I can't tell whether you need to take this kind of risk in order to get on, or whether your employer is just exploiting you in a way that the next employer wouldn't.

+1, really good answer covering a lot of the issues here. But I disagree with "only take the offered 1/4 pay if it would make a practical difference", see my comment on Ã“ÂÃÂƒÃ¡Â¶ÂŽ's answer above. — Feb 5 '14 at 5:07
@Carson63000: I get it. My personal feeling is that if they have some cash hanging around that they're in effect using as a hardship fund, but not enough for payroll, then it's better on my co-workers if I don't grab more of it than I need. But it's all part of calculating what gamble you're going to make. — Feb 5 '14 at 9:20

MÃ³Ã…Â¼ 1,81911523 · Answer 2 · 2014-02-04 22:33:34Z

Since your boss has said that if you really need the money they will pay you, I suggest taking them up on at least the part-payment they're offering. The point is less about the relatively small amount, but that they are actually paying down their debt to you. Since they're not good with collecting payments, it's important to be clear that you're making a sacrifice in order to lend them money, you're not an investor in their company (unless you are, of course).

Letting your employer get away with not paying you is bad two ways. As Joe said the deal with employment is that you work, they pay you. And unless you're getting something extra out of that missed payment, you're making an unsecured loan to them and not charging interest. That's a much better deal than they can get elsewhere, so they'll be tempted to keep the loan and try to borrow more. That's bad!

I went through almost exactly this situation a year ago. I got paid late in November 2012, two weeks pay in late December, then not again for several months. By March my boss was actively avoiding me, as well as not answering email or phone calls.

What I did was:

email him every time he missed a pay cheque, and leave voicemail

email him and his business partner after three months to say that I was not going to be checking in code until I was paid, but that I would continue to support customers (making it clear that that meant customers would have executables that the company did not have source for)

After four months emailed/voicemailed that I was taking my accumulated leave then would begin actively looking for paid work

What made this work that is that in Australia wages are guaranteed by the government for six months in the event that the company goes bankrupt. So I could afford to have them owe me six months wages at no real risk. When that guarantee kicks in that debt is handed to the tax department who collect it using their usual enthusiastic methods :) What actually happened was that at step 3 I rang Fairwork Australia (the government department) and explained my problem. Two days later my boss paid me in full, including the leave. Strangely he expected me to keep working for him, but with that payment record I was not interested and I was in my second week of my new job.

Definitely take any part payment they offer. It's clear that the company is dysfunctional and stands an excellent chance of going bankrupt. At that point, you want the amount owed to you to be as small as possible, because you're never going to see it (not being in Australia where we have the tax office guarantee). — Feb 4 '14 at 23:22

Jessica Brown 1,4531222 · Answer 3 · 2014-02-04 17:03:00Z

I would sit down with your boss and let him know that although you love working there, you just can't afford to keep working there indefinitely if you aren't getting paid, and see how they respond. I wouldn't give them a full-out ultimatum that they pay you "or else", it's more a courtesy to let them know that they have a problem they need to solve if they really value your contributions and don't want to risk losing you. Your living expenses don't pay themselves. Benefits are worth little if you're not getting paid and going into debt. You do not owe them an obligation to stay around because you are "hard to replace".

Begin updating your resume and sending out applications to other companies, regardless of whether they promise to pay you the money they owe. If your company still hasn't come through with the back-pay they owe you by the time you have a solid offer in hand from another company, it's time to jump ship, and I'm sure they will not be terribly surprised at that point, even if they're disappointed you won't work for free indefinitely.

Roger 7,17132644 · Answer 4 · 2014-02-04 16:50:23Z

Do the fringe benefits really matter that much if you're not getting paid consistently? If you have the opportunity to look for another position, you should do so. Since your skills seem to be in demand, you can evaluate any prospective employers for cultural fit and similar benefits before burning bridges with your current employer.

I would advise against any sort of ultimatum. Either they don't have the money to pay you what you're owed, or they don't think it's absolutely necessary for some reason. In either case, it's unlikely that you'll bring about any long-term, consistent change by making demands.

Xavier J 26.3k104797 · Answer 5 · 2014-02-04 16:52:28Z

Umair,

I don't know where you're located but if involving legal authorities is an option, that's one way.

What sticks out worse is your comment about "Pessimistic approach towards payment collection due to fear of losing clientele". That tells me that your management doesn't know how to run a business. And because they don't know, you are hurting by way of slowing creeping into debt.

I won't say "quit your job", but I'll say its definitely time to consider your options. You can't change the management.

Just because they owe you is not a guarantee that you'll be able to collect on it, even with the help of a lawyer, especially should the company go out of business. — Feb 4 '14 at 17:05
No legal solutions. But if you could give some examples of the possible options other than resignation, do tell. — Feb 4 '14 at 17:05

Brian Warshaw 63558 · Answer 6 · 2014-02-04 18:47:35Z

It is a fundamental concept that if you expect folks to work for you, you ought to pay them what and when they deserve. If you're in a position where you have to teach them this, then I don't have a lot of confidence that things will go well long-term. And honestly, if you're going into debt because you aren't getting paid anyway, what do you stand to lose by leaving? Better to take a job that doesn't have the "pros" in your list but does have that central pro: pays.

score 5 · Accepted Answer · 2014-02-05 01:34:17Z