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I worked for a company as a developer for over 4 years. The last year we had ups and downs. There were lots of one-sided punishing rules from company management to employees, like cutting from our payment for coming in 15 minutes later than 8:00 a.m. etc, and 8 months ago the company started to delay our monthly payments. They have not paid for the last four months.

I quit this month and this week is my last week at work, but I was thinking about how to receive my delayed payments from them.

I've given them all the needed documentation about the project and development process, and gave them an official letter about leaving the contract because of delayed payments, but my friends that quit before me has not received their delayed payments for about 6 months now. I was thinking I should have the leverage to force them to pay.

Should I sue them to get my rights? What are my options?

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Should I sue them to get my rights? What are my options?

Well, ultimately that is up to you to decide - we cannot tell you what to do.

However, as you describe it, it seems you have exhausted all other options.

In general, not paying promptly (no matter whether it's salaries or open bills) is a huge red flag for a company. It usually means the company is on the verge of bankruptcy. Some manage to turn things around, but the outlook is not good. In addition to that, the company does not show any signs of trying to make things right (such as paying at least some outstanding wages).


You should probably write one last, formal letter to inform your company that you are waiting for payment, what exactly you consider outstanding and why. Send it with recorded delivery or registered, and ideally with a witness present, so there is proof. This notification is also usually a prerequisite for suing in court. Set a time limit for a reply (14 days is common).

If that does not make them pay, it seems that suing is your only option if you want to push this further. Whether the effort is worth it is up to you to decide.

Generally you should not agree to wait longer than 14 days, no matter what excuses the company has. If they try to delay you with promises like "we need to sort out some problems" or "we are waiting for a big payment", ignore them - promises are not worth anything in this situation, and if you wait longer, the company may go bankrupt, which will make it even more difficult for you.

Learn about your options:

  • Is there some sort of arbitration system, or will you need to sue in court?
  • Will you need a lawyer?
  • What will the cost be for suing?
  • If your employer formally declares bankruptcy, it may become hard to recover anything (again, depending on local regulations).

Consider this, then decide.

20

I don't know anything about the company. But if they don't pay any salaries for 4 months, then they are very likely bankrupt.

That means you could sue them for the outstanding payments, but you can't press water from a rock. When they simply don't have any money left, then there is nothing for you to take. Even when you have a court decision saying they have to pay you X money. When they are bankrupt, then there is no way to enforce that decision. Chances are you won't even be able to get enough money from them to pay for your legal costs.

So only take legal actions if you are certain that they are actually able to pay you and just refuse to do so for... reasons. Otherwise you are wasting your time and your money.

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    Good point. Note that in some jurisdictions, claims for outstanding wages have a fairly high priority, so you may get some money even in case of bankruptcy. But that totally depends on applicable laws, rules and the details of the situation. – sleske Jan 28 at 10:42
  • @sleske The important point would be to make a reasonable estimate of what the company's illiquid assets are worth - in bankruptcy these will be liquidated and employees will share whatever is left with suppliers, banks, and other unsecured creditors after secured creditors are paid. Making a good estimate of these numbers is really important when making the decision to take legal action. If there's not likely going to be anything left after secured debt is repaid, then it's a hopeless case. – J... Jan 28 at 15:28
  • Getting the money after a bankruptcy also depends on how the company was set up. If it was an LLC or another type of corporation in the US, the owners have some protections for their personal assets, but if they don't have those protections, the OP and co-workers might be able to sue the owners directly to get their pay. Only lawyers in their locale will be able to determine the situation. – computercarguy Jan 28 at 19:05
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    If it's not clear whether they will go bankrupt, sue sooner rather then later. You may be able to extract your payments before the company goes under. – Pieter B Jan 29 at 11:43
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Should I sue them from officials to get my rights?

Yes, twenty times over. I don't know the process for your country, so you will have to find out, but as an employee - not contractor, there usually is some government body you can turn into for help rather than going directly to court. So have a deep session with google and see if you can find something like that.

If you cannot find such a body, by now it's best to engage a local lawyer for further guidance on how to proceed. And I would not waste time waiting if the company is in financial trouble then stating your claims need to be done ASAP as a day delay may be the difference between being paid and not.

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    Also don't wait too long. I am not entirely sure from your question but if your employer might go bankrupt, it could very well be that you are not the first in line for whatever is left moneywise. So better try to get it (legally ofcourse) before they file for bankrupsy – user180146 Jan 28 at 8:28
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    @user180146 I've heard some whispering about bankruptcy two days ago, that's why I'm worried about my rights. – Mohammad_Hosseini Jan 28 at 9:36
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    Not enough for an answer and my story is aligned with this answer so I will put it in a comment here. I was in a situation similar to yours just in Poland. My employer started to delay salary payments, eventually stopped entirely - in 4 months I received any money at all only once and the amount was covering just half day of my work. I had quit and delivered a letter giving the last deadline for receiving the entire due amount with information I will take legal action if they missed it. They tried to delay further so I went to government authority with a formal complaint. – Ister Jan 29 at 0:34
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    The authority decided to run a control in the company. As a result, the former employer was fined (the fine was a bit more than monthly salary) and very quickly found the money to pay me the debt. Two years later I found out that the company went bankrupt so I would just not receive my money if I had waited much longer. – Ister Jan 29 at 0:38
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Talk to a local lawyer.

A lot of the answers given are assuming that you're located in the West, under the sorts of laws that Western countries have. Since you're apparently located in Iran, judging by your profile location, those assumptions may be inaccurate to your situation. I'm not sure what Iranian bankruptcy laws look like, and I can't find anything relevant with a quick Google search; it's entirely possible that they're based on Islamic Sharia law rather than the Western systems of common and civil law.

As a result, I would recommend talking to a local lawyer, who would be able to inform you what your options are, what the obligations of your employer in the event of a bankruptcy are, whether there are government agencies you can contact for help, and whether you're realistically going to be able to recover any money from your employer.

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    I've Already talked to a lawyer and he mentioned the formal rules to how to confront this issue. – Mohammad_Hosseini Jan 30 at 11:42
  • @Mohammad_Hosseini Excellent! I hope things go well for you. – nick012000 Jan 30 at 23:47
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    Thank you, as I mentioned In other comments I managed to solve the issue by talking to lawyers and ministry of work..., But Thanks for your kind response. – Mohammad_Hosseini Feb 1 at 19:58
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If you worked as a normal employee, I would recommend you to go ASAP to your local trade union and discuss with them. At least in my country (Italy), in case of banckruptcy employees are considered privileged creditors so they will be the first to get paid by bankruptcy trustee but assistance from a trade union will be de-facto mandatory. You could teoretically sue your Company on your own, bypassing the trade union assistance, but it will cost you much more for sure and you will not have more benefits compared to the other option.

If you worked as an independent contractor, it is up to you whether sue the company or not but you should think about it very carefully: you will not be a privileged creditor and you cannot ask assistance by trade union (as far as I know) so the chances of spending a lot of money to have nothing back may be very high. As i said before, this is true in Italy but laws and regulations in your country may differ even substantially.

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    The problem is it is very much country-dependent. In Poland employee is quite far in the queue and usually never sees their money if the employer goes bankrupt or gets only a laughably small share of the due sum. Also, trade union would have pretty much little to nothing to do with this kind of settlement. – Ister Jan 29 at 0:24
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I would not sue because lawsuit proceedings are public record. Corporations absolutely positively hate lawsuits, as do most people. I don't want a future potential employer seeing how I sued a place that hired me. Even if I were 1000% in the right to do so, I still worry it reflects poorly on me that I was unambitious enough to not address the problem before it turned into a legal matter.

If it's your last job ever then I guess "dang the torpedoes", but a lot of times both kids get in trouble for fighting, not just the one who started it.

EDIT: Additional Considerations

Remember that any earnings you recover in a lawsuit are not free and clear. You will owe full taxes on it, as nothing will have been withheld like is the case with a paycheck. You can also expect to fork over about a third of it to your lawyer. You might not win the suit, but still concern future employees with your suit. Lastly, you might win and still get nothing while owing your lawyer their fees. It sounds like your company simply cannot pay you. Thus, you can actually lose money (not to mention headaches and lost goodwill) even if you prevail.

It's up to you, but consider all the factors before making a choice.

  • So you would prefer future employers to know that you are okay with getting not paid? – Paŭlo Ebermann Jan 29 at 22:02
  • @PaŭloEbermann: how would they ever know that? That's not searchable for free online... – dandavis Jan 29 at 22:03
  • "You can also expect to fork over about a third of it to your lawyer" - while this is possible, it is not quite certain. This depends a lot on local rules, fees and on the details of the case. For example, in Germany, in simple cases, you may get by with fees of a few hundred euros, which may well be worth it. – sleske Feb 5 at 10:18

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