Ask HN: What to do when your company misses payroll?
25 comments
You should have started sending out your resume when they missed payroll back in May. Not only does this place have some serious financial problems, but management doesn't even have the decency to let people know ahead of time. That's pretty sleazy in my book. Even if you could rationalize giving the place a free pass on a missed payroll there's no excuse for them not even mentioning it.
Don't fall for the line about the money right around the corner. You'll be hearing that from now until the time you leave the company in debt up to your eyeballs because you've been living off credit cards instead of the paychecks you should be getting.
I know people who have been in this situation before and none of them had any stories about how the company turned the corner. It turned uglier instead. More missed payrolls- sometimes for a month at a time. Stress. Thousands of dollars of debt due to living off credit cards. Showing up to a locked office one day without any notice. Working the last month sitting on a crate in the owner's living room because the money is still right around the corner. Protests on the owner's front lawn. In the end if you'll be damn lucky if you leave with some office furniture or a laptop. Forget about money.
You should be out finding a new job ASAP. Any job. This is worse than being unemployed. You're off working the day at an office and not getting paid for it. At least when you're unemployed you've got some time on your hands to do something more productive than doing free work for some greedy asshole. You could very well show up to work tomorrow only to be laid off. Or even worse- the door could be locked.
Don't fall for the line about the money right around the corner. You'll be hearing that from now until the time you leave the company in debt up to your eyeballs because you've been living off credit cards instead of the paychecks you should be getting.
I know people who have been in this situation before and none of them had any stories about how the company turned the corner. It turned uglier instead. More missed payrolls- sometimes for a month at a time. Stress. Thousands of dollars of debt due to living off credit cards. Showing up to a locked office one day without any notice. Working the last month sitting on a crate in the owner's living room because the money is still right around the corner. Protests on the owner's front lawn. In the end if you'll be damn lucky if you leave with some office furniture or a laptop. Forget about money.
You should be out finding a new job ASAP. Any job. This is worse than being unemployed. You're off working the day at an office and not getting paid for it. At least when you're unemployed you've got some time on your hands to do something more productive than doing free work for some greedy asshole. You could very well show up to work tomorrow only to be laid off. Or even worse- the door could be locked.
jm4 makes a good point. Get any personal items out of your office ASAP. Do it slowly and quietly, do it after hours if possible.
Just prepare for the possibility that one morning the doors may be locked when you show up.
Just prepare for the possibility that one morning the doors may be locked when you show up.
Friend of mine had same problem, company is now in legal trouble for not paying many employees for a long time and trying to go bankrupt at this point. The friend who went through this received paperwork from the court stating that the company owes him a few grand for unpaid time worked, we doubt he'll ever see that money.
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 day it's due.
c) Folks who have equity, and will see some upside in good times, can be asked (ASKED, not TOLD) if they are willing to make sacrifices for the success of the team. Ask them ahead of time - preferably well ahead of time.
d) When a startup has successes, it's because of your people. When a startup has problems, it's because of leadership. Get out your spoon and start eating shit ^H^H^H humble pie. Tell your people that screw ups happened, and - because the buck stops with you - YOU are the cause. Apologize to your people.
e) LEADERS LEAD FROM THE FRONT.
The last point is the most important. 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.
Startups come and go, but 50 years from now, your reputation, and your sense of self will still be with you. Make sure that you are scrupulously ethical with your people.
Travis J I Corcoran, President SmartFlix
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 day it's due.
c) Folks who have equity, and will see some upside in good times, can be asked (ASKED, not TOLD) if they are willing to make sacrifices for the success of the team. Ask them ahead of time - preferably well ahead of time.
d) When a startup has successes, it's because of your people. When a startup has problems, it's because of leadership. Get out your spoon and start eating shit ^H^H^H humble pie. Tell your people that screw ups happened, and - because the buck stops with you - YOU are the cause. Apologize to your people.
e) LEADERS LEAD FROM THE FRONT.
The last point is the most important. 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.
Startups come and go, but 50 years from now, your reputation, and your sense of self will still be with you. Make sure that you are scrupulously ethical with your people.
Travis J I Corcoran, President SmartFlix
"Startups come and go, but 50 years from now, your reputation, and your sense of self will still be with you. Make sure that you are scrupulously ethical with your people."
Goes without saying, but sure is nice to see anyway. Thank you, Travis.
[Aside: Don't compromise the quality of your otherwise excellent posts. Move your signature and company link off of your comment and onto your profile where it belongs. You are obviously a pro. Look like one here.]
Goes without saying, but sure is nice to see anyway. Thank you, Travis.
[Aside: Don't compromise the quality of your otherwise excellent posts. Move your signature and company link off of your comment and onto your profile where it belongs. You are obviously a pro. Look like one here.]
I intended to have the sig block, so that folks could see that I wasn't just pontificating about what others should do.
I have, however, removed the link.
Good point. Thanks.
I have, however, removed the link.
Good point. Thanks.
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.
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.
Thank you. I appreciate that.
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.
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.
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.
"What to do when your company misses payroll?"
1. Invent a time machine.
2. Go back 30 days.
3. Run, don't walk, the other way as fast as you can. This won't end pretty.
Steps 1 & 2 are desirable, but optional. Step 3 is required.
(I'm not using the time machine to be cute or funny, but to make a point. This problem didn't just happen when you found out about it. They knew long before you and did little or nothing to help you. Shame on them.)
1. Invent a time machine.
2. Go back 30 days.
3. Run, don't walk, the other way as fast as you can. This won't end pretty.
Steps 1 & 2 are desirable, but optional. Step 3 is required.
(I'm not using the time machine to be cute or funny, but to make a point. This problem didn't just happen when you found out about it. They knew long before you and did little or nothing to help you. Shame on them.)
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 leave because payroll was missed -- Leave because the leadership isn't there. But by all means, LEAVE.
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 leave because payroll was missed -- Leave because the leadership isn't there. But by all means, LEAVE.
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.
I have been doing startup work in Silicon Valley since 1984 and have seen all the variations on this.
It all depends on the facts. When a startup struggles and misses payrolls, it is legitimate for the executive team to ask employees to stay and help the company through the struggle. Each employee then must decide based on his or her individual circumstances. Employees will have varying stakes in this. The employee who, say, owns 1-2% of the company via stock options may have a different motivation from the one who owns little or no equity, particularly if the company may eventually have a huge upside with a turnaround.
If the sacrifice is significant, though, then the employees should at least be offered some additional compensation for the added risk they are taking in potentially working for nothing. A commitment to give them added option grants if the company turns it around does this well.
This hits the founders and investors, but it should hit them - they are the ones asking people to do extraordinary things to help them save their dreams and they are the ones who will most benefit if it can be saved.
If this is done with options, there are no special tax complications. Nor does it cost anything to make a letter commitment that can be documented formally after the turn-around once the company has money again.
The one thing that has shocked me most over the years are the management types who expect employees to take the hit in such situations but who will not lift a finger to reward them for making a special sacrifice.
Others have mentioned secretiveness as a danger sign for the employees. I would add to this any display of unfairness such as a failure of management to recognize that special sacrifices deserve special rewards.
Of course, some cases are hopeless and then the only remedy is to run for the door, as many have noted.
It all depends on the facts. When a startup struggles and misses payrolls, it is legitimate for the executive team to ask employees to stay and help the company through the struggle. Each employee then must decide based on his or her individual circumstances. Employees will have varying stakes in this. The employee who, say, owns 1-2% of the company via stock options may have a different motivation from the one who owns little or no equity, particularly if the company may eventually have a huge upside with a turnaround.
If the sacrifice is significant, though, then the employees should at least be offered some additional compensation for the added risk they are taking in potentially working for nothing. A commitment to give them added option grants if the company turns it around does this well.
This hits the founders and investors, but it should hit them - they are the ones asking people to do extraordinary things to help them save their dreams and they are the ones who will most benefit if it can be saved.
If this is done with options, there are no special tax complications. Nor does it cost anything to make a letter commitment that can be documented formally after the turn-around once the company has money again.
The one thing that has shocked me most over the years are the management types who expect employees to take the hit in such situations but who will not lift a finger to reward them for making a special sacrifice.
Others have mentioned secretiveness as a danger sign for the employees. I would add to this any display of unfairness such as a failure of management to recognize that special sacrifices deserve special rewards.
Of course, some cases are hopeless and then the only remedy is to run for the door, as many have noted.
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 that I really owed him something just because he had hired me.
So what did I learn? He was a jerk anyway, and it wasn't worth working for him. Fortunately, the economic climate was more forgiving 4 years ago when that happened, and after working in landscaping for 2 weeks, I got a great job that I loved.
If you're really that concerned, go ahead and look elsewhere. If you get some pretty solid connections, go ahead and present your concern to your manager. Depending on his reaction, I don't think you need to feel like you're letting the company down by leaving. If they can't pay you when they said, they at least owe you a very good explanation.
So what did I learn? He was a jerk anyway, and it wasn't worth working for him. Fortunately, the economic climate was more forgiving 4 years ago when that happened, and after working in landscaping for 2 weeks, I got a great job that I loved.
If you're really that concerned, go ahead and look elsewhere. If you get some pretty solid connections, go ahead and present your concern to your manager. Depending on his reaction, I don't think you need to feel like you're letting the company down by leaving. If they can't pay you when they said, they at least owe you a very good explanation.
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 regular performance that you are paid for. In most companies I'd even go as far as to say that they technically owe you for the various "extra miles" that have become the norm in our industry.
And I guess that's exactly the point they are trying to camouflage when they attempt to push you into the guilt corner.
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 regular performance that you are paid for. In most companies I'd even go as far as to say that they technically owe you for the various "extra miles" that have become the norm in our industry.
And I guess that's exactly the point they are trying to camouflage when they attempt to push you into the guilt corner.
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.
A business exists to make money. If it can't pay you, it isn't making money and either should not exist now or will not exist in the near future. There are rare exceptions, but the odds are so bad that I would not take the chance or extend the trust.
There aren't enough specifics in your write up to know for sure what to do. However, either you hold equity or you do not and that should be a major factor.
If you are an equity holder in this company and it is a funding issue, not a core business issue, I would stay and see it through. Sometimes you can cut way back on the leverage and nurture the core profit with the equity holders you have.
If you are an employee, exit as diplomatically and respectfully as you can. Why? You made an agreement with your company to trade services for pay. They have defaulted. It sounds like they have done so without a heads up. This shows a lack of integrity on the part of management and is even more troubling than the cash.
There are things in the world that can blind side a good management team - abrupt law changes, competitor introduces game changing technology, key team member leaving, etc. However, pay roll is a cash flow issue and one management teams can look ahead and predict.
If a management team can't predict, process and pay payroll, how well can they execute on the things that make your business money?
If they can execute on payroll but have chosen not to, or to not tell you, are they people that you should throw your lot in with?
There aren't enough specifics in your write up to know for sure what to do. However, either you hold equity or you do not and that should be a major factor.
If you are an equity holder in this company and it is a funding issue, not a core business issue, I would stay and see it through. Sometimes you can cut way back on the leverage and nurture the core profit with the equity holders you have.
If you are an employee, exit as diplomatically and respectfully as you can. Why? You made an agreement with your company to trade services for pay. They have defaulted. It sounds like they have done so without a heads up. This shows a lack of integrity on the part of management and is even more troubling than the cash.
There are things in the world that can blind side a good management team - abrupt law changes, competitor introduces game changing technology, key team member leaving, etc. However, pay roll is a cash flow issue and one management teams can look ahead and predict.
If a management team can't predict, process and pay payroll, how well can they execute on the things that make your business money?
If they can execute on payroll but have chosen not to, or to not tell you, are they people that you should throw your lot in with?
You bring up a very good point. I do not have any equity. I was always promised it, but of course it never materialized.
Not all businesses exist with a primary purpose of making money. That's like saying people exist to procreate.
FWIW.
If it can't pay you though, and you need the money, then you should leave.
FWIW.
If it can't pay you though, and you need the money, then you should leave.
Note added for clarity: this was not a startup, it was a long established company with around 30 employees. It is in an industry where raising funding would be a disaster and guarantee no orders ever again.
I was working for a company some years ago, and pay started to get late. No word from management, no explanations, and when it did turn up, no apologies.
We were all starting to look to jump, and some did. I found out what really was going on and started to make serious plans.
I won't go into full details, but after about 6 months we managed a hostile management buyout. We dealt with some unpleasantness from some people who jumped early, and half of those who had stayed were made redundant. That was a horrible, horrible thing to do, but we had no choice - we had no money. It cost us a bundle, but it was the only way to save the company.
The ones who stuck with us are now secure in their jobs, have equity, have 50% of the six months of missing pay restored (we weren't responsible or liable, but we honored it anyway) and have a fantastic work place.
In the middle of the worst, when negotiations were bad, we asked a few people why they were still working 5 hours a day, four days a week, when they hadn't been paid for three months, and everything was uncertain.
"We don't want to work with anyone else." was the rather humbling reply.
Since then there have been months when cash-flow was tight, and money wasn't on time. Company directors, I have learned, are legally obliged not to destabilise the company, and telling employees the exact situation when money is tight can be regarded as that. It's not always the owners' fault. Employees are quick to say "You should've told us." but legally, the situation is not always that clear.
I have to say that we, the directors, never took more pay than the employees until they were back on full pay. even then we took 1/4 pay for a further few months, then 1/2 pay until the cash-flow stabilised. We never asked employees to forego pay without ourselves first taking nothing.
I'm not making excuses for your bosses, nor suggesting that you stick it out and hope it all works. My employees did, and they're very, very pleased about it. I stuck it out, took steps, and now (part) own the company.
Take control, one way or another. In a smaller company, jumping is not the only option.
I was working for a company some years ago, and pay started to get late. No word from management, no explanations, and when it did turn up, no apologies.
We were all starting to look to jump, and some did. I found out what really was going on and started to make serious plans.
I won't go into full details, but after about 6 months we managed a hostile management buyout. We dealt with some unpleasantness from some people who jumped early, and half of those who had stayed were made redundant. That was a horrible, horrible thing to do, but we had no choice - we had no money. It cost us a bundle, but it was the only way to save the company.
The ones who stuck with us are now secure in their jobs, have equity, have 50% of the six months of missing pay restored (we weren't responsible or liable, but we honored it anyway) and have a fantastic work place.
In the middle of the worst, when negotiations were bad, we asked a few people why they were still working 5 hours a day, four days a week, when they hadn't been paid for three months, and everything was uncertain.
"We don't want to work with anyone else." was the rather humbling reply.
Since then there have been months when cash-flow was tight, and money wasn't on time. Company directors, I have learned, are legally obliged not to destabilise the company, and telling employees the exact situation when money is tight can be regarded as that. It's not always the owners' fault. Employees are quick to say "You should've told us." but legally, the situation is not always that clear.
I have to say that we, the directors, never took more pay than the employees until they were back on full pay. even then we took 1/4 pay for a further few months, then 1/2 pay until the cash-flow stabilised. We never asked employees to forego pay without ourselves first taking nothing.
I'm not making excuses for your bosses, nor suggesting that you stick it out and hope it all works. My employees did, and they're very, very pleased about it. I stuck it out, took steps, and now (part) own the company.
Take control, one way or another. In a smaller company, jumping is not the only option.
"telling employees the exact situation when money is tight can be regarded as that"
Not telling the employees there is a non-trivial chance they won't be paid for their work when you have actual knowledge of such could pretty easily be shown to be theft of services/fraud in front of a jury, and almost certainly piercing the corporate veil in the process. It's simply not right to force your employees that have no equity in the company to assume financial risk on behalf of the owners, particularly without the employees' knowledge.
Not telling the employees there is a non-trivial chance they won't be paid for their work when you have actual knowledge of such could pretty easily be shown to be theft of services/fraud in front of a jury, and almost certainly piercing the corporate veil in the process. It's simply not right to force your employees that have no equity in the company to assume financial risk on behalf of the owners, particularly without the employees' knowledge.
Definitely shop your resume ASAP, simply because there's no downside: you don't have to quit unless/until you get a better offer, and if the money does come in you're set.
The company I worked for went through this a few years ago, but pulled out of it and was doing well for a while.
Nonetheless I got a zero-day shitcan from them about a year ago (let go on Wednesday and paid through Friday, with another half month of medical/dental).
Don't be more loyal to the company than they would be to you.
The company I worked for went through this a few years ago, but pulled out of it and was doing well for a while.
Nonetheless I got a zero-day shitcan from them about a year ago (let go on Wednesday and paid through Friday, with another half month of medical/dental).
Don't be more loyal to the company than they would be to you.
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.
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.
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.
Process that however your ethics guide you.
One thing that you should do is network with your soon to be former coworkers. Set up a mailing list, start talking about what is happening and help each other find jobs. I've had to do this once or twice, though never at a place that outright missed payroll. But be prepared for the fact that most of your coworkers are in denial.
Depending on the state you are in it may be that management broke the law. Generally speaking, if you can't make payroll you are supposed to dissolve the business then and there and pay employees by selling the assets of the company.
And yeah, if management didn't even have the cojones to tell you that there wouldn't be paychecks on payday, the place is doomed and there is no helping it.
Good luck.
Depending on the state you are in it may be that management broke the law. Generally speaking, if you can't make payroll you are supposed to dissolve the business then and there and pay employees by selling the assets of the company.
And yeah, if management didn't even have the cojones to tell you that there wouldn't be paychecks on payday, the place is doomed and there is no helping it.
Good luck.
The problem is that this situation creates a death spiral for the company. If they are missing payroll they are literally out of money. Any investor willing to put money in is going to do their due diligence. This means the investor is going to be aware of just how badly the company needs this investment, which typically leads to the terms being very unfavorable, which typically leads to your equity being very unvaluable.
So, without knowing more about the specifics at this point, I would say that you are working for free, and unlikely to have any stock options you have ever amount to anything of value.
Everyone has their own reasons, but one of the reasons I work for startups is because of the equity. When the future value of the equity is at or near zero, it's no longer an interesting or worthwhile proposition for me.
You should have a good enough feel for the pulse of the company to know if there if you are close enough to sustainability that maybe a little extra cash will get you across the finish line, or just delay the inevitable. My guess though is that it is time to start looking.
So, without knowing more about the specifics at this point, I would say that you are working for free, and unlikely to have any stock options you have ever amount to anything of value.
Everyone has their own reasons, but one of the reasons I work for startups is because of the equity. When the future value of the equity is at or near zero, it's no longer an interesting or worthwhile proposition for me.
You should have a good enough feel for the pulse of the company to know if there if you are close enough to sustainability that maybe a little extra cash will get you across the finish line, or just delay the inevitable. My guess though is that it is time to start looking.
Some comments about resumes ...
If you apply for a job with me, I want to know why I should employ you. I want to know how you will add value to my company. I want to know that you will bring skills and abilities.
Do you know what I want? You should. You shouldn't just read the ad for the job - you should find out what my company does, then read the ad, and work out how your skills will help me meet my goal of making money. If you can't or won't do those things, I probably don't want you to work for me.
What skills do you have? How can I tell?
Can you work on your own? How can I tell?
Can you work in a team? How can I tell?
Will you get things done? How can I tell?
I don't really care about your education, or your recent jobs, unless they show me why you are the right person for me. And I want to read that on the first page, preferably in the first paragraph, and preferably without typos, grammatical errors, or anything else to distract me. I don't at this stage really care what your name is, or how to contact you, or whether you can typeset 16 different fonts on the same page.
Why should I employ you? What do you think I want, and why should I think you have it.
And good luck in whatever you choose. You could choose to put your resume in your profile here on HN.
If you apply for a job with me, I want to know why I should employ you. I want to know how you will add value to my company. I want to know that you will bring skills and abilities.
Do you know what I want? You should. You shouldn't just read the ad for the job - you should find out what my company does, then read the ad, and work out how your skills will help me meet my goal of making money. If you can't or won't do those things, I probably don't want you to work for me.
What skills do you have? How can I tell?
Can you work on your own? How can I tell?
Can you work in a team? How can I tell?
Will you get things done? How can I tell?
I don't really care about your education, or your recent jobs, unless they show me why you are the right person for me. And I want to read that on the first page, preferably in the first paragraph, and preferably without typos, grammatical errors, or anything else to distract me. I don't at this stage really care what your name is, or how to contact you, or whether you can typeset 16 different fonts on the same page.
Why should I employ you? What do you think I want, and why should I think you have it.
And good luck in whatever you choose. You could choose to put your resume in your profile here on HN.
Been there before. Best get out as soon as possible.
Likewise here. If the company had any prospects of funding, they would be more open. Get your resume out now. There is no harm in working for a while longer, so long as it doesn't interfere with your job search. Also check with you state employment office, because you probably have wage claims which may go ahead of other creditors. (IANAL)
EDIT: Your coworkers are still working because they dont know what else to do. They are going through the motions on hope.
EDIT: Your coworkers are still working because they dont know what else to do. They are going through the motions on hope.
"Your coworkers are still working because they dont know what else to do."
Email every one of them the link to this discussion. Give them a chance to "know what else to do".
Email every one of them the link to this discussion. Give them a chance to "know what else to do".
Bad advice. Dont burn your bridges. You may need recommendations from your boss or he could sue out of spite.
WRT your coworkers, I was thinking of stories of people would get ready for work every day, go sit on a park bench until quitting time, and go back home, because they couldnt face the fact that all the meaning in life was gone. People have a hard time dealing with major setbacks like death, divorce, or loss of their job.
WRT your coworkers, I was thinking of stories of people would get ready for work every day, go sit on a park bench until quitting time, and go back home, because they couldnt face the fact that all the meaning in life was gone. People have a hard time dealing with major setbacks like death, divorce, or loss of their job.
I disagree that this is bad advice. Perhaps I didn't make myself clear enough.
You are in a time warp. This game is over. It was over long before OP posted here.
You are on a sinking ship and must jump. Your co-workers are in the same boat. Some may even say you have a moral responsibility to help them. In real world disasters, some risk their lives to help others escape. Sending this link to your co-workers could greatly benefit them while costing you nothing.
You have no bridge to burn. Your boss already burnt it. Any recommendation from someone who let this happen to his people is worthless.
I don't blame your boss for having business problems. That can happen to anyone. I do blame him for letting it reach the point where it would affect his employees without fair warning. This is inexcusible and unacceptable.
From a practical point of view, you are much more likely to get a good reference from helping out a co-worker than from a boss who has already screwed you. So do it.
You are in a time warp. This game is over. It was over long before OP posted here.
You are on a sinking ship and must jump. Your co-workers are in the same boat. Some may even say you have a moral responsibility to help them. In real world disasters, some risk their lives to help others escape. Sending this link to your co-workers could greatly benefit them while costing you nothing.
You have no bridge to burn. Your boss already burnt it. Any recommendation from someone who let this happen to his people is worthless.
I don't blame your boss for having business problems. That can happen to anyone. I do blame him for letting it reach the point where it would affect his employees without fair warning. This is inexcusible and unacceptable.
From a practical point of view, you are much more likely to get a good reference from helping out a co-worker than from a boss who has already screwed you. So do it.
I have been unfortunate enough to have been the General Manager of the Company when this happened. I had no equity. I tried my best to keep everyone motivated and paid myself last to the detriment of my own family. I thought the Captain is supposed to be the last to leave.
I believed that the Company could have turned around, but needed the capital. However an under capitalized Company has a very slim chance of being successful. Even if you stay and work, you become an observer as everything you build starts to crumble and your hands are tied.
My recommendation still stands. Get out as fast as possible and remember, when one doors closes another opens.
I believed that the Company could have turned around, but needed the capital. However an under capitalized Company has a very slim chance of being successful. Even if you stay and work, you become an observer as everything you build starts to crumble and your hands are tied.
My recommendation still stands. Get out as fast as possible and remember, when one doors closes another opens.
Here's my experience with this. Maybe it will shed some light on your situation, maybe it won't.
At one particularly insane start-up, I went two months without a paycheck. It was such a bizarre place to work, and so interesting, I didn't care. The company officially went under. The State of California has ruled that they owe me $30,000 (including the penalty for not paying). I'll never see it.
They did, however, call a meeting and tell everyone when they were unable to meet payroll. There was no attempt to deceive the employees about this. There was no psychological pressure put on to continue working.
Bottom line: While they were meeting payroll, I made really good money—better than 99.9% of the human population. I learned lots of cool stuff, did some cool stuff, and lived in luxury despite working in a warehouse with a cement floor (I don't care about that sort of luxury, anyway). Even after two months without pay, I had saved up so much in the bank that I was still in nice financial shape.
I would do it again. The big danger, at least for me, is that the company might have taken a long time to officially terminate. The smart thing to do would be to set a date: if payroll isn't back on track by that date, then I move on. In hindsight, I was lucky that they officially crashed in only two months, since that forced me to leave and start making money again.
At one particularly insane start-up, I went two months without a paycheck. It was such a bizarre place to work, and so interesting, I didn't care. The company officially went under. The State of California has ruled that they owe me $30,000 (including the penalty for not paying). I'll never see it.
They did, however, call a meeting and tell everyone when they were unable to meet payroll. There was no attempt to deceive the employees about this. There was no psychological pressure put on to continue working.
Bottom line: While they were meeting payroll, I made really good money—better than 99.9% of the human population. I learned lots of cool stuff, did some cool stuff, and lived in luxury despite working in a warehouse with a cement floor (I don't care about that sort of luxury, anyway). Even after two months without pay, I had saved up so much in the bank that I was still in nice financial shape.
I would do it again. The big danger, at least for me, is that the company might have taken a long time to officially terminate. The smart thing to do would be to set a date: if payroll isn't back on track by that date, then I move on. In hindsight, I was lucky that they officially crashed in only two months, since that forced me to leave and start making money again.
I have been in your situation. My advice is to get out before the company goes under and forces you to compete with everyone else you work with for jobs.
Even though your company has not been very stand-up with you, don't burn any bridges. You never know when that kind of stuff will come back to bite you in the ass.
Even though your company has not been very stand-up with you, don't burn any bridges. You never know when that kind of stuff will come back to bite you in the ass.
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. :)
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. :)
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?
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?
The IP assignments I've signed when joining a company (and always gotten modified in my favor to varying degrees) have never said anything about whether or not they have their shit together enough to pay me. In my experience, they tend to boil down to: anything you do on company time, with company equipment, or at the company's request belongs to the company, full stop. You might be able to argue that you weren't on company time if you weren't paid for that time, but the other two clauses should cover that handily.
At my present job, I use my own laptop, and got the agreement winnowed down to just the third of those -- they only own my work if they specifically asked me to do it. (Granted, I'm not writing a lot software here, and what software we do write just exists to facilitate our core business, so I doubt they'd have any qualms about any of the developers modifying their agreements similarly, anyway.)
At my present job, I use my own laptop, and got the agreement winnowed down to just the third of those -- they only own my work if they specifically asked me to do it. (Granted, I'm not writing a lot software here, and what software we do write just exists to facilitate our core business, so I doubt they'd have any qualms about any of the developers modifying their agreements similarly, anyway.)
Right, but I seem to remember something in various state laws about a contract not being a contract unless there is "consideration" involved, i.e. both parties are receiving something of value. That's why so many transactions are for $1, eg. wealthy CEOs and Arnold Swarzenegger taking a salary of $1, old school buses or old surplus military equipment being sold for $1, etc. Regardless of what's written down, the transaction isn't a valid contract unless both parties receive something.
IANAL, this is all just idle speculation, consult with a real lawyer before you actually rely on this.
IANAL, this is all just idle speculation, consult with a real lawyer before you actually rely on this.
That's pretty much what I remember from my business law class, but then again I was often annoyed by the professor's little skits and rarely frequented whole live lectures (search Robert Emerson University of Florida if you haven't had a chance to see what nightmare the students go through).
A friend of mine has been through something like that, not happily; here's another employee of the same startup telling the story: http://www.sixdemonbag.org/yomu.html
(Summary: founder trying to keep stringing everyone along gets convicted of securities fraud.)
(Summary: founder trying to keep stringing everyone along gets convicted of securities fraud.)
So I was working for a company that stated withholding paychecks. My boss was very charismatic and we had a client or two that owed us a very large amount of money. Due to these facts I and many many others stuck around long after we should have. In the end I was owed several thousand dollars, about 6 paychecks. The company is now being sued by many people, and it turns out hasn't payed the IRS for the last two years. My advice is to get out now. It just isn't worth the risk. Possibly stick around until you find a new job but look desperately for a new job.
Aside from payroll, your company is likely facing massive amounts of debt to their creditors.
While you may have an emotional connection to the company, bill collectors acting on behalf those with outstanding invoices with your company will have no such connection. There's likely a backlog of unpaid invoices that will also need to be paid. Employees walk ... creditors sue. Your company will pay creditors first, and is likely to leave you guys hanging.
While you may have an emotional connection to the company, bill collectors acting on behalf those with outstanding invoices with your company will have no such connection. There's likely a backlog of unpaid invoices that will also need to be paid. Employees walk ... creditors sue. Your company will pay creditors first, and is likely to leave you guys hanging.
This is correct. When payroll was missed the first time, we learned that the software consultants we were working with had not been paid in a month. I can only assume at least the same is true for our hardware suppliers.
No, legally, the employees get paid first.
Yes but it's not automatic. Creditors don't have any feelings of loyalty towards debtors the way employees feel towards employers. Creditors also tend to be businesses who are used to suing for their debts, unlike employees. So while employees should get paid first, you have to actually make a claim to that money somehow. I'd ask a real lawyer for the details.
I've seen first-hand that companies don't always do this.
Perhaps once a company files bankruptcy there's more oversight with this ... but before that happens, I've absolutely seen a company trying to cover its ass and limit its legal expenses by closing out unpaid invoices and stiffing their staff.
Perhaps once a company files bankruptcy there's more oversight with this ... but before that happens, I've absolutely seen a company trying to cover its ass and limit its legal expenses by closing out unpaid invoices and stiffing their staff.
Norway has (had? I moved to the UK a decade ago) a great protection against this: Be late with payroll and any employee could have the company bankrupted without paying a fee. All it took was filing a form.
Now, of course, at the bankruptcy hearing the company might be able to pay money due to staff and avoid being put under administration and shut down, but it's a very effective way of ensuring companies keep on the good side of their staff when cash gets tight.
Taxes also pay for a fund that covers back payment of salary for up to 6 months in the case of a bankruptcy where staff have been more lenient, and so provides both a safety net and a reason for staff to be more accommodating if there's hope of improvement.
Now, of course, at the bankruptcy hearing the company might be able to pay money due to staff and avoid being put under administration and shut down, but it's a very effective way of ensuring companies keep on the good side of their staff when cash gets tight.
Taxes also pay for a fund that covers back payment of salary for up to 6 months in the case of a bankruptcy where staff have been more lenient, and so provides both a safety net and a reason for staff to be more accommodating if there's hope of improvement.
Yes, there is much more oversight with formal bankruptcy proceedings.
Anything is possible, and from what the OP describes, the highest likelihood is that there is no cash to pay ANYONE.
Anything is possible, and from what the OP describes, the highest likelihood is that there is no cash to pay ANYONE.
+another if I could.
It's really important to understand this. If you, as an employee, are not getting paid, then it's a pretty safe bet that no one is getting paid. You are just now finding out what the creditors have been dealing with for months. Missing payroll is deadly fucking serious. Get out now.
It's really important to understand this. If you, as an employee, are not getting paid, then it's a pretty safe bet that no one is getting paid. You are just now finding out what the creditors have been dealing with for months. Missing payroll is deadly fucking serious. Get out now.
There are ways to encourage businesses to pay wages ahead of other debts, though. For example, Ontario makes directors of corporations personally liable for up to six months of unpaid wages (and some amount of vacation pay too, IIRC).
My company came very close to missing payroll several times in the dark days but we always pulled it off. In the same period I saw a close partner company reach the point where they were paying partial paychecks (barely above minimum wage) before they finally folded. I also have a friend who went from almost $5m in the bank to almost $1m in debt trying to keep his company afloat.
Bottom line: if it's a one-time (or once-in-a-while) thing where the cashflow just got held up, that's one thing, but if it's been multiple times now, it's time to get out. If they're just waiting on one big payment from a single customer, run out the door. It'll never happen.
But don't burn your bridges. I work with many people who left our company in the "dark days" and have come back now that we're more financially stable.
Bottom line: if it's a one-time (or once-in-a-while) thing where the cashflow just got held up, that's one thing, but if it's been multiple times now, it's time to get out. If they're just waiting on one big payment from a single customer, run out the door. It'll never happen.
But don't burn your bridges. I work with many people who left our company in the "dark days" and have come back now that we're more financially stable.
I recently left a startup that was in a similar situation, though I think they were alot more open about finding more investment (It was however always just around the corner).
I'd advise you to leave now, especially if the founders/management have decided not to take anymore pay themselves, thats usually the sign there is only a few weeks (Not months) of cash left.
I'd advise you to leave now, especially if the founders/management have decided not to take anymore pay themselves, thats usually the sign there is only a few weeks (Not months) of cash left.
A couple days after the last missed payroll, I indicated I would be working from home but not in a full time manner. Since then, everyone else appears to continue going into the office and working full days even though they have not been paid. Am I wrong in my actions?
The most upsetting part for me is that on payday, no one in management mentioned we would not be getting paychecks. It seemed like they figured we wouldn't mind/notice and we would just continue working.
I have updated my resume, but have not sent it out yet. They keep saying money is right around the corner and I'd like for that to be true. So I've basically been waiting that out while keeping my eyes open for opportunities (which are sparse).
Does anyone who has been through this before have any advice? Or how would you have handled it if you could go back and do it again?
EDIT: Thank you all for your insightful comments.
After hearing how often this thing doesn't turn itself around, I am going to start sending my resume out immediately. I guess I just needed a community kick in the ass to get me going!