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Ask HN: Startup stopped paying my salary

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Ask HN: Startup stopped paying my salary

#1
My first job out of college was for an "internet media" startup right across the street from school. Long story short, after a few years they started running out of cash. Salary started coming a few days late, then weeks, then a month. At the point when they owed me 2 months of salary, I quit and started looking for a new job full-time (which I found after a couple months, thank God).

Whenever I talk to the founder, he typically says they have "potential investors" and the money should be coming in a few months. I'm not as stupid as I was, and I'm sure that no money is coming in. Who wants to invest in a startup that hasn't been profitable for 5+ years and has back salary obligations to multiple employees?

I can survive without the money, but it's still a pretty good chunk for me so it's worth it to me to put in effort to retrieve it. Problem is, I don't really know how to approach it. I see my options as being: 1. Go to the law; 2. Approach them aggressively; 3. Forget about it.

I've been thinking about filing a wage claim with the state (California), but I would rather settle directly with the company rather than go through the state. I can't really forget about it because it's a decent chunk of change.

There is a little twist, and that is that my experience with the founders and officers was very good up until the point they stopped paying me. They took us out to nice lunches and bought us the first iPhones on launch day (even bought me a new one when I dropped mine). They sent me all-expenses paid to WWDC, Google I/O, OSCON, and SIGGRAPH. I essentially got my career started at that company. It was my first job as a developer, and when my boss left I got promoted to "CTO" and got to hire my own small team. This is one of the main reasons I haven't really "gone after them". I don't really want to screw them over, I just want my money.

Any advice would be welcome. Thanks!

Re: Ask HN: Startup stopped paying my salary

#3
Go for 2, then 1. Have a polite, but firm discussion with the CEO. Tell him that you can't wait anymore for what it's rightfully yours. Give them 30 days to get your money or you'll be forced to go through the state. If they don't pay up, file a claim (you gave them ample time and a fair warning). And remember, they are the assholes, not you for wanting your money.

Re: Ask HN: Startup stopped paying my salary

#4
You're not going to get the money back. 'grellas may hop on and set me straight on that, but what I expect will happen in the best case is that by pursuing a wage claim you start the machinery that finally puts your employer into bankruptcy, whereupon you become a creditor, lining up with all the rest of the creditors who aren't going to get paid either.

Don't let my belief here imply that you shouldn't do anything; all three of your options are valid. However, in each of them, before you (a) get emotional, (b) burn any potential bridges (even treacherous, slippery ones), or (c) contemplate investing serious time or any money in this process, keep in mind that your outlook on this probably isn't good.

Re: Ask HN: Startup stopped paying my salary

#5
post #2

Forget about it, move on. In the future, when salary starts coming in late is the time to start looking for a job. Better yet, always keep your network open.

I actually did start looking for a job right a little bit before the salary starting coming late. From the time I sent my first official "hey guys I'm looking for a job" email until the time I signed the contract for my next job was about 6 months. The operations of the company started smelling weird to me the longer I was there, plus I felt like I needed to be in a different type of position, so did start looking before things started falling apart.

While I was still getting paid, I didn't want to quit until I had secured a new job. When they were 1 month late with pay, that pretty much drew the line for me so I gave them 1 month notice at that point.

And yes, now I'm regularly updating my resume and keeping my eyes and ears open for other opportunities.

Re: Ask HN: Startup stopped paying my salary

#6
Two issues from my point of view:

1) You're owed the money legally. No question about it. You can probably even get it. California takes a very hard line on unpaid wages.

2) In the grand scheme of the situation do you feel good about fighting them over the unpaid wages?

#1 is easy. You file a claim. You have a decent chance of getting your money.

#2 is harder and it's impossible to know from the outside. I think it's perfectly reasonable to let people off the hook in some rare circumstances. Only you can make the call if this is one of those times. It doesn't make you weak or a fool to treat people better than they strictly deserve.

It sounds though, like you've already made up your mind that you want to go after the unpaid wages. So give them a final warning (written, certified mail, return receipt) and then file a claim.

Re: Ask HN: Startup stopped paying my salary

#7
post #4

You're not going to get the money back. 'grellas may hop on and set me straight on that, but what I expect will happen in the best case is that by pursuing a wage claim you start the machinery that finally puts your employer into bankruptcy, whereupon you become a creditor, lining up with all the rest of the creditors who aren't going to get paid either. Don't let my belief here imply that you shouldn't do anything;…

Thanks for your input tptacek. When I spoke with one of the VP's he also said that there wasn't much I could do to go after the money. But I thought he might be trying to prevent me from doing anything against the company.

What you described about kicking off the bankruptcy process is pretty much how I pictured it. They have implicitly made me an interest-free lender.

One of the hard lessons of life here for me is that I am really hesitant to trust any people in business now. I now understand why unions exist.

Re: Ask HN: Startup stopped paying my salary

#8
post #4

You're not going to get the money back. 'grellas may hop on and set me straight on that, but what I expect will happen in the best case is that by pursuing a wage claim you start the machinery that finally puts your employer into bankruptcy, whereupon you become a creditor, lining up with all the rest of the creditors who aren't going to get paid either. Don't let my belief here imply that you shouldn't do anything;…

It's worth noting that if you do resort to pushing the company into bankruptcy, at best you'll get nothing, and at worst you'll make things even more difficult for the founders than they already are.

Re: Ask HN: Startup stopped paying my salary

#9

Go for 2, then 1. Have a polite, but firm discussion with the CEO. Tell him that you can't wait anymore for what it's rightfully yours. Give them 30 days to get your money or you'll be forced to go through the state. If they don't pay up, file a claim (you gave them ample time and a fair warning). And remember, they are the assholes, not you for wanting your money.

Thanks, that confirms what's been stewing in my mind.

Re: Ask HN: Startup stopped paying my salary

#10
These guys are scum for letting you work blindly without 1) having any idea how or when they would pay what they committed to and 2) warning you they're circling the drain. They deserve to get nailed for it.

That said, it doesn't sound like you have a long employment history, so a cordial relationship and good references from them might be worth more than the money they're unlikely ever to be able to pay, no matter how you go after them. Consider hanging tight at least until you risk losing the right to claim your due (I have no idea if there's anything like a statute of limitations on wage claims or suits).

Good luck. I've been through "oops, we're about out of money, guys", but I was fortunate they were honest and ethical about it.

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