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Ask HN: What to do when your company misses payroll?

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Re: Ask HN: What to do when your company misses payroll?

#41

Post by raghus »

tjic wrote: post #7

There's a lot of good advice here telling the employee how to act. I concur with most of it. Let me add something from another perspective: Speaking as a startup owner who has had money problems from time to time: a) crap happens b) your hourly people, who have no equity, deserve every single cent. Whether answering phones, stuffing boxes, or whatever, these people work hard, and you MUST pay them every penny, on the…

Before an owner asks anyone to take even a temporary pay cut, he should cut his own pay to the bone. Before he misses a payroll for other people, he should have already skipped a paycheck or two.

How can you tell for sure if the owner/CEO has in fact taken a pay-cut or missed a pay period or two? I am sure they all say they've have gone without pay for 3 months already. I am asking this in all seriousness.

Re: Ask HN: What to do when your company misses payroll?

#42

Post by tjic »

raghus wrote: post #41
tjic wrote: post #7

There's a lot of good advice here telling the employee how to act. I concur with most of it. Let me add something from another perspective: Speaking as a startup owner who has had money problems from time to time: a) crap happens b) your hourly people, who have no equity, deserve every single cent. Whether answering phones, stuffing boxes, or whatever, these people work hard, and you MUST pay them every penny, on the…

Before an owner asks anyone to take even a temporary pay cut, he should cut his own pay to the bone. Before he misses a payroll for other people, he should have already skipped a paycheck or two. How can you tell for sure if the owner/CEO has in fact taken a pay-cut or missed a pay period or two? I am sure they all say they've have gone without pay for 3 months already. I am asking this in all seriousness.

Funny answer: when I go out to grab a $6 burrito with some of my coworkers, I have to borrow ... um ... $6.

Serious answer: I think that my people would say that I conduct myself in ways small and large such that they don't wonder for a second if I'm telling the truth or not.

Re: Ask HN: What to do when your company misses payroll?

#43

Post by tjic »

mrbgty wrote: post #27
tjic wrote: post #7

There's a lot of good advice here telling the employee how to act. I concur with most of it. Let me add something from another perspective: Speaking as a startup owner who has had money problems from time to time: a) crap happens b) your hourly people, who have no equity, deserve every single cent. Whether answering phones, stuffing boxes, or whatever, these people work hard, and you MUST pay them every penny, on the…

This list is awesome. I would love to work for someone like you. My experience has been that even when the leader/ceo/whatever decides to cut their own pay in that situation, it is done in some sneaky way that doesn't really result in much loss to their overall pay.

> This list is awesome. I would love to work for someone like you.

Thank you. I appreciate that.

Re: Ask HN: What to do when your company misses payroll?

#44

Post by jellicle »

miracle wrote: post #12

It depends on where you live. In european countries (I'm pretty sure that it's the case in Switzerland) you will always get your salary for the last 3 months! If the company goes bankrupt, an insurance will pay.

Sadly, the U.S. has no equivalent insurance program.

Re: Ask HN: What to do when your company misses payroll?

#45

Post by nostrademons »

ryanwaggoner wrote: post #31
rokhayakebe wrote: post #8

If you are going to work a few weeks for free, you may as well think of a good small business application and build it. At least you will make money from it or you can add that to your resume.

Be careful about intellectual property ownership bullshit here.

I'm curious how that works out if you're not getting paid for your time at the company...

I thought part of the employment agreement was that you'll be compensated for your work. If you are not, does the agreement still hold up?

Re: Ask HN: What to do when your company misses payroll?

#46

Post by jellicle »

Get out of there fast. Also note that very probably the company isn't sending the money it's supposed to be withholding from your paychecks to the government, so you will have tax problems this year, that are the company's fault but you will end up having to resolve.

I.E., your paystubs say the company withheld $5,000 from your paychecks and gave you $10,000. You file your tax return, and the IRS comes back and says, "We don't know what you're talking about, Company X didn't send us any $5,000. You can go ahead and send us the $5K now though."

Missing payroll is a VERY VERY VERY VERY bad sign. Do not continue to waste your time working there for free.

Re: Ask HN: What to do when your company misses payroll?

#47

Post by bmj »

synnik wrote: post #40

I've been in 2 startups that didn't have cash for payroll. Startup #1: The CEO took payroll out of his own personal credit cards and paid us all anyway. That startup went public and grew to be very successful. Startup #2: The CEO was already a millionaire, but wouldn't put in a cent of his own money. That startup failed. In short, if the CEO cannot find a way to pay you, then he isn't cut out to be the CEO. Don't lea…

This is very good advice. I worked for a small start-up when I entered the industry. After two years, due in part to factors outside of the company's control, things started to look bleak. One of the founders, my boss (and the only other programmer) pulled me aside and explained everything to me (the other founder talked to the sales and marketing guys). He told me I was free to walk away, and he would gladly recommend my work. Or, I could stay on, work part-time for the company and part-time for his consulting business (this was the primary source of his income while he did the start-up). I really appreciated how upfront the founders were about the situation.

Re: Ask HN: What to do when your company misses payroll?

#48

Post by iigs »

quellhorst wrote: post #19

Offer to accept hardware in lieu of payment, get as much as you have to sell to get repaid. Find another job right away.

I worked at a company that missed payroll. They told us that they "couldn't stop" us from taking our laptop and marking its fair market value against what we're owed.

I asked about the desktop next to my laptop. "Can't stop you." "The Server under the desk?" "Can't stop you."

I drove home with fourteen PCs in the back of my car. It was so heavily loaded I had to peer over the hood. This was early 2003 and I'm still getting rid of them.

It made the eventual "yeah you had some entitlement to money but there wasn't any after the lawyers got done with it" letter all that much more sweet. :)

Re: Ask HN: What to do when your company misses payroll?

#49

Post by calaniz »

moe wrote: post #36
TallGuyShort wrote: post #4

I worked for a small startup and had that problem several times. It was never a long enough amount of time that I really questioned whether or not I would get paid, but it did annoy me and the way the owner handled it made a very 'awkward' work environment. He generally gave an explanation as to why it was our fault, and why we shouldn't question him. Eventually I just left. He was very upset when I quit. He felt tha…

He felt that I really owed him something just because he had hired me. Never fall for that trap. I have seen quite a bit of this attitude - mostly pulled off on younger employees during salary negotiations. In fact I have witnessed it so often that I think this must be something they teach in business schools, probably under the "optimizing employee performance"-tab. You don't owe your boss anything beyond the regula…

I agree. I negotiated my salary the first three years I was working full time. I did it politely and with respect. Truth is, you've got to look out for yourself.

Re: Ask HN: What to do when your company misses payroll?

#50

Post by iigs »

jellicle wrote: post #46

Get out of there fast. Also note that very probably the company isn't sending the money it's supposed to be withholding from your paychecks to the government, so you will have tax problems this year, that are the company's fault but you will end up having to resolve. I.E., your paystubs say the company withheld $5,000 from your paychecks and gave you $10,000. You file your tax return, and the IRS comes back and says,…

The counterpoint to this is a bankrupt company may well not have ever reported your income to the IRS, at all.

Process that however your ethics guide you.

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