Haven't been paid for last month, is it ok to stop working? [closed]

Question

I'm working as the lead and currently (since everyone else was laid off for money reasons) sole developer of a start-up, and have been there since its beginning a couple of years ago.

A self-employed friend of mine also does work for the company every now and then, but stopped completely—temporarily—as he hasn't been paid since last summer for his work.

For the past couple of months pay has been a couple of days late because of money problems, but this month (after being warned that it would be a couple of days late) I still haven't been paid over two weeks later. I'm working abroad right now so emailed my boss, and he explained that he's waiting for some money to come in and he'll pay me ASAP—the same thing he's told my colleague for months.

I trust the guy, and I know he'll pay me when he can, but the thing is my colleague hasn't been paid for months, and unlike him I don't have any savings, though I'll be returning to university after the summer anyway to finish the last year of my degree, and was due to start working less hours as I used to for the same company.

What I'm here to ask is, is it okay to just stop working until I'm paid? The company depends entirely on me, there's a lot of work to do and things would come to a standstill if I stop working, so I don't really want to do it. But I feel very uncomfortable working without having been paid, especially that it's now closer to the next paycheck (and rent coming out of my account!) than the previous.

How should I word the email when I explain that I won't work for free? Should I give him notice (a few days, or more?) or just stop working immediately? I've already made it clear I'm unhappy about the situation, but just got excuses.

If I didn't have so much invested in this company (emotionally) I would simply quit, but doing this isn't as easy as just leaving.

Answer 1

There's a harsh reality here: this company has failed. There's a tiny chance it can be be brought back to life, but not by anything you, as a lone and remote developer, can do.

This is probably very difficult for the founder. It's probably disappointing for you, but not a disaster. When you write it up for your resume, be sure to explain what you did for them. Think through clearly what you learned from this experience: you'll be asked about that in future job interviews. "If you had it to do over, what might you do differently?" is a standard kind of question. This is real-life experience, not just some tech buzzword, and makes your candidacy for your next job quite a bit stronger.

As far as letting the founder know what's going on, you don't need to burn your bridges. You can remind him that you're returning to school. "I need to earn some money for school fees so I'm spending some time on another project" will explain your situation perfectly.

If he comes back and says, "wait, wait, work for me" then you can say, "I AM working for you, but I still need to do the other project to earn money." This makes it clear to him that you have to get on with your life and meet your own needs.

Answer 2

The business transaction is that you get paid in return for work performed. Conversely, no money, no work. No matter how progressive the company culture and no matter how good the bosses, at the end of the day, you have to be paid. Your landlord only cares about the rent and couldn't care less why you can't pay it. The supermarket clerks are similarly sympathetic.

I am happy that your boss is a good guy, but it doesn't matter why he can't pay you. He has to pay you. Period. Disclosure: I did not follow my own advice and stuck with my boss when the firm lost a customer who accounted for 90% of its revenues. That was years ago. I worked for six months without pay and fortunately, before my savings ran out, the firm stopped its nose dive. I did it because I liked the better angels of his nature :) I would have been better off collecting unemployment, helping him to the best of my ability and getting another job that paid real money - I am not doing that again. As a final note, I never recovered my lost salary. You have to look out for yourself because you can't rely on anyone else.

Forget about equity. Any equity they give you at this point is worth little more than toilet paper. You can't eat equity and you can't pay rent or mortgage with equity. Equity is worth something only if it's convertible to cash. They are most probably going down the tubes at this point. Make sure they don't take you with them.

My advice to you is to look for another job ASAP, because you are at severe financial risk. If you want to help them, take care of yourself first and give them all the help you want to give them - after hours. If you can't help yourself, you are in no position to help anyone.

In your email, give them say a week's notice, tell them that your are on a precarious financial footing, that you need all the time available to get another job. Tell them that you'd love to continue working for them but the bottom line is that you can't afford to work for free. Tell them it's been good to work with them and that they treated you well, that you are sorry that you are compelled to go, that you wish them the best of luck, and that you'll help them however you can. Apply for unemployment benefits ASAP - if the firm contests the benefits, simply tell the unemployment office that you haven't been paid.

Follow-up comment from @JimG "Any equity they give you at this point is worth little more than toilet paper. That assumes that the equity shares are printed on paper. Otherwise, I disagree. Toilet paper has more utility"

Answer 3

What I'm here to ask is, is it okay to just stop working until I'm paid? The company depends entirely on me, there's a lot of work to do and things would come to a standstill if I stop working, so I don't really want to do it.

Reading this is quite painful to me. A lot of computer work is invisible so even on a team we invest tons of heart and soul on simple things. But at the end of the day work you do not own yourself—and do for others—is truly just work.

Here is the harsh reality: If they haven’t paid you yet, the chances of them paying you are slim to none. If you have a contract that stipulates pay, you might be able to legally leverage that in some way if things truly go south. But the reality is that even if you do—sorry to say—take the employers to court for back pay, you might only get a fraction back of what you are rightfully owed.

Chances are if the company is failing, they will claim bankruptcy and there you go. 100% of nothing. Maybe the court would order them to—I don’t know—sell the chairs and coffee machine to pay back vendors. But then you are the end of a huge list of people owed. Meaning when you get something it might be so low it’s a joke and the check is best framed on the wall as such.

Some might suggest equity, but I can show you tons of examples of that not working either for the same reason. Basically if you are not getting paid, the chances of equity are zilch.

If I didn't have so much invested in this company (emotionally) I would simply quit, but doing this isn't as easy as just leaving.

Well, The choice is yours:

• What is the company to you? A paycheck? A career? A stepping stone?
• If you leave & they fall apart how would it impact you? Would you be seen as the reason for the collapse or someone acting reasonably in an unreasonable scenario.
• What exactly are you doing there that you can do similarly elsewhere? Meaning if you are a coder, what code and processes have you created that can be transported somewhere else. And I do not mean code per se, but mainly ideas, concepts and the things that make you valuable.

It’s taken me a long time to truly realize my heart and soul can only exist for my own projects. And if my own projects dovetail with my employers, all the better. But at the end of the day, they own your work and you own yourself.

Answer 4

This sounds like a textbook example for where you should ask for equity in the company in exchange for a specified amount of work. They don't have cash to pay you, but it seems like your work is vital. This is great bargaining position for you, and it actually would be a win-win-situation for everyone involved. They would get your work without you hitting their cash flow.

After all, it sounds like your choices are:

1. Continue working and hoping for a paycheck
2. Drop everything and walk off
3. Ask for equity and continue working

Of course, this only makes sense if you trust the cash flow problems to be temporary and the company to make a profit some day. It you don't have that level of trust any more, I would suggest cutting your losses.

If you decide to cut your losses, be professional about it. You will likely meet your current boss and colleagues again. Then again, I don't think they will bear a grudge against you if you explain that you simply can't keep working without getting paid.