Employer says he needs to delay payment by 3 months due to bureaucracy [closed]

Question

I started working as a researcher on a private funded project around one year ago, working as Data Scientist/Software Developer without a written contract.

The problem lays in the fact that my employer told me this week that he is not going to be able to pay me until January, due to some issues with the funding agency, which I truly believe due to the fact that there is a lot of bureaucracy when it comes to payments/hiring new people.

I would like suggestion/tips about not burning any bridges with this current employer (mainly because I enjoy the current work, has a good work/life balance, interesting projects and lots of freedom), but also in order to avoid any issues for myself, such as not receiving the payment for these months.

Answer 1

It doesn't matter how much you like the work if you do not get paid. You work to get money. Employer pays you to work. When you don't get money, they do not get work done.

You say you want to ensure you are getting paid after three months. Since your employer do not have the money yet they cannot guarantee that. They may end up bankrupt, out of money. Then you do not get anything.

There are two ways to go as I see it:

1. Pause the project for three months. You can come back when they have money.
2. Get a stake in the project. You get a large percentage of the results. You say this is a privately funded project so perhaps there is a company that you can get shares in?

Number 2 is still a risk since the company can go bankrupt. But if it works out and the project starts earning money, you get a part of the profits.

Personally I know what my time is worth and I am not interested in taking on that kind of risk. So I would go with option 1. "I'll see you in three months, then".

Answer 2

The problem lays in the fact that my employer told me this week that he is not going to be able to pay me until January, due to some issues with the funding agency ...

The first thing you should do is verify the claim. As Ronald Reagan said, "Trust but verify".

I would like suggestion/tips about not burning any bridges with this current employer (mainly because I enjoy the current work, has a good work/life balance, interesting projects and lots of freedom), but also in order to avoid any issues for myself, such as not receiving the payment for these months.

About 15 years ago I worked for a small company that lost its Angel Investor. The owner of the company said similar things to keep me and the other engineers. He said he would pay us the back pay plus interest when he got a new investor. He also went so far to say the company was being restructured, we were getting shares in the new company, etc.

I worked for the guy another 4 months or so. I left after I learned the owner found additional funding but he did not pay us the back pay. He had enough money purchase himself a new Mercedes; and go to fund raisers and purchase autographed Baltimore Ravens footballs; but he could not pay us.

We did not get the promises in writing. I asked for the agreement in writing for several months over the water cooler informally, and through email. You can probably guess how that ended. It cost me about $60,000 USD.

The District Courthouse in Maryland has a legal aide center. I visited the center and the staff attorney told me tough luck because I did not have anything in writing.

The "have anything in writing" is an important litmus test. In my case, the owner of the company did not provide written agreement. In fact, he did not even mention it in email. If we emailed the owner about it, he would not reply. He spoke to us person-to-person.

Has your employer passed the communications litmus test? Has the owner put something in writing? If not, then I would be inclined to believe the statements your company are making are less than truthful, and may hide a lot of sharp edges.

Moving beyond the litmus test, you should get the exact terms in writing. This should not be offensive to the company. The company lawyers advise the company to do the same in its other relationships.

You should also insist the owner personally guarantee the agreement. It is possible the old company will be folded, a new company will be installed, and the IP transferred to the new company. With the old company out of business and the IP gone, there's nothing left to extract money from.

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As an addendum, I'll tell you about a trick I now use due to the previous experience...

You need to have a record of a conversation, whether it is in writing or other medium. Purchase a portable recorder with some accessories to plug into a phone. I purchased a SONY ICD PX333 Digital Voice Recorder and Sony ECMPC60 Electric Condenser Microphone.

Call the person who is being evasive and not providing information in writing. Ask him/her to go over the details again for you. After the person speaks their first sentence, stop them and say, "I can't write as fast as you can talk", and then ask "do you mind if I keep a record of this conversation".

Your first statement disarms them and they believe you are taking written notes. The second statement is what gets you permission to record the conversation.

Some states don't require both parties to consent to recording a conversation. If you live in a state like that, then just record the conversation.

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Also, from watching the Shark Tank, new investors don't want the old bills. If your company does get new funding, then the one thing I can assure you is there won't be any money for the past employee costs and back pay.

New investors don't pay old bills; rather they start fresh. Mark Cuban said the same on the Shark Tank. So don't believe for a minute a new investor is going to pay your back pay accrued before his/her agreement and investment took effect.

Answer 3

Employment relations are simple:

• The employee (you) is responsible to work
• The employer (they) is responsible to pay salary on time

How the employer manages that is up to them. There are ways for them to do that. They could take a loan, for example. If they can't get a loan to pay their employees while they wait for funding, well, then the banks know more than you do.

So whenever your employer tells you they won't be able to pay you on time, run away! It means that your employer messed up. They are in serious financial peril and it is very likely that you will end up working for free.

In order to not burn any bridges, simply tell them:

I really would like to work for you, but I simply can not afford to not receive a salary for 3 months. I need to pay rent and eat, you know. I can not bridge such a large period without any income. So please call me again when you secured funding and can guarantee that I am going to get paid on time.

Answer 4

There are two things that should tip you off to leave the building and never come back

without a written contract

my employer told me

And althought in some countries the contract is assumed to "be there" in the reflection of the fact that you work it only assume it's existence (so not the type, benefit, pay etc.).
So only after proving that such contract existen you could go and see if your employeer paid taxes, health benefits or any other required funds. And it's assume that you were paid basic income (if such exist).

THE BRIDGE HAVE BEEN BURNED You just don't want to believe it. As other asnwers point out, you are paid to perform work. That performance is wanted by your employer. It should be his responsibility to assure that you would perform that work even if not paid. By, for example, having a written appendix to your contract. Which as you know don't really exist.

There is nothing, and I mean nothing, that in case of court case would stop your "employer" from stating that you both verbally agreed that what he have paid you in previous 12 months were overpayment for those 3 months. Or that it was YOU that requested volluntary work for him.

Answer 5

I would recommend walking out and not returning; it's bad practice as a consultant/contractor to let employers delay bills like this. If you absolutely feel compelled to stay, at least insist that you be given a written version of the contract before you do further work. If the company fails, or still refuses to pay, this might enable you to use a debt collection agency against them.

Answer 6

I'll play with your stance that

"due to some issues with the funding agency, which I truly believe"

& "I would like suggestion/tips about not burning any bridges"

-which basically means not making any demands/ultimatums to the boss

Basically you are hoping for the best, where almost all of the cards and probabilities and anecdotes of similar circumstances are stacked against you. So if YOU make the decision to stick it out, make sure you blame no one but yourself for choosing to stick it out if the worst comes. Basically take responsibility for making your choice if it goes sour, since you noticing and posting here is your chance to get out before being 3 more months deep in the hole.

Answer 7

Since didn't list a location, I'll give you an answer specific to Australia, though other countries might have unemployment programs with similar rules.

Australia has a government organization called Centrelink that handles all of the payments for various government benefits programs, and one of those programs, the Newstart Allowance, pays unemployed individuals a fortnightly benefit to look for work. Those who receive it have a legal obligation to look for paid employment, and are not allowed to refuse job offers.

When I was on Newstart payments, I received a preliminary job offer from a start-up that offered me a position that turned out to be an unpaid "internship" position. So, I simply informed them that I would be legally obligated to continue looking for paid employment, and if I received a job offer, I would be legally obligated to quit working for them and begin my new job elsewhere. I didn't get given the job.

Answer 8

It is fairly normal many organisations having a backlog of pay from 30 days to 3 months.

However, the job of an employer is being a buffer for those delays, and paying you regularly. If not for that, then you could very well be a consultant and charge 5x more.

If they are not upholding their end of contract, then I do not see why you should work for them.

They are failing at their main responsibility, and there is no arguing about that. Salaried workers work to be paid on time. It is their responsibility to find another source of money before the payment comes through, not yours.

Walk away, and find another job, or just come back when there is money. You are being taken advantage of.

Answer 9

OP, if you decide to ignore the chorus of advice here (which is based on bitter personal experience for the most part, obviously) I hope you will at least try to cover yourself better. Please don't work even one more hour for this person without a written contract. Preferably a retrospective one dating back to the beginning of your employment, or at least to the last time you were paid. It would at least allow you to collect back pay if money miraculously reappeared later on.

And I'd add that if that entirely reasonable request is turned down, you should take it very, very seriously.. Because then you know that not only they're in trouble, but they're dishonest.

Answer 10

Start looking for new job NOW

If the company doesn't pay the money to the employees, it means they either try to scam you or they are in HUGE financial problem. If they scam you, they are not going to pay you. If they are on the edge of insolvency, they will likely not be able to pay you anymore.

Look for a lawyer

In both cases, it might be still able to get at least a part of money they owe you. Depending on the country you're in, there might be nothing possible to do, or there might be some steps that will get you (and others in the same situation) the money back. For example, if the court will declare the company insolvent and order to sell all remaining assets, before they will go away, it might be enough to pay employees back. The companies file insolvency normally when it's too late even to pay the taxes from the remaining part of their assets.

Answer 11

Find another way to let them put money in your pocket

First find out what the actual situation is. It makes a large difference whether a specific funding for your salary is delayed, or whether the whole cash reserve of the organization has dried out.

If the organization still has cash

Find a way to let them give it to you, explain that you need to pay the bills, and even if it is impossible to give you the actual salary (as that may interfere with the funding request), there is probably nothing stopping them from giving you cash in hand.

The simplest solution, may be to ask for an advance equal to your income.

If the organization does not have any cash

Consider making them look for a source of cash. Perhaps they need to take out a small loan, this is unpleasant but otherwise you will effectively be doing that.

If this does not help, keep in mind that you are not an employee anymore, but a lender. (Of an interest free loan with no collateral and no interest).

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Last but not least: If you know other people that may have seen this situation before, it won't hurt to ask how it was dealt with earlier.