An employer hasn't paid me for months already. Should I keep working with them?

Question

A little background: my employer has a client and this client is pretty big and they are using the system for many users and I'm the only resource person who knows the source code and everything in it. The first few months was fine and I receive my salary on time. They told me that they were having problems with the finance recently but I'm skeptic because they hired another contractual developer to do other work for them.

So I've been working for this employer for more than a year now but they keep on delaying salary and currently 2 months delayed. I already have deployed the project in the development sites for testing purposes and there are items that still need fixing and other features to be added along the way. My question is, should I keep on working with this employer or should I tell them that I need to get paid first before I resume work? I'm not the kind of person who does things demandingly.

Key Question
So what should be my tone of voice? Inquiring? Demanding? I don't like to put bad impressions on clients/employers and burn bridges.

Also I'm thinking my employer might lose this client because of me not proceeding but I need to get paid first, I have a family to feed. By the way, the system was worked by a different developer primarily and I just took over and my employer just got hold of the codes with which they don't have idea how to so I'm the one managing it at the moment and currently under my Git account.

Update

So my employer paid me already but it took more time than I have expected. It just takes patience and lots of it and had to remind them a couple of times. So lesson learned, make sure you are getting paid (at most) every fortnightly so if in case your employer won't be able to pay you at least the damage will be manageable to a minimum. Nevertheless, just be honest as much as possible with your dealings regardless if your boss is not. In the end it's not your loss but theirs.

Answer 1

It sounds like your employer is having financial problems, possibly the end client not paying them, but the fact that they hired another contractor for something else, indicates they have money, you are probably just one of their last priorities. And once they pay you late once, it's just easier to sit on your next paycheck than someone else's. Also, how many employees do they have? Have you heard any of them grumbling about not getting paid on time? I doubt it.

The squeaky wheel gets the grease - and you need to start squeaking a lot louder!

I would stay VERY pleasant with them at this point. You don't want to burn bridges or have them bad mouth you to others if things fall apart.

However, you are running a business not a charity, and now your own financial standing is being affected by their financial problems. I would tell them they are a favorite and important client to you, consequently, you have turned down other work because you know how important this project and the end client is to their business, you love working on the project, but you simply cannot afford to wait any longer for payment. You need to be paid what is overdue immediately, otherwise you regrettably cannot do any more work for them because you need to spend your time trying to get back some of the business you turned away to work on this project so much.

I would not turn over any more work until they are caught up on their payments to you and I would tell them you understand about cash flow issues, but you need to be paid on time in general, and know in advance any time they are going to be late paying you so you can make decisions for your own financial future.

Answer 2

Consider this: the time you spend, continuing to work for this client in the hope of eventually getting paid, can more profitably be invested finding a new client who doesn't have money problems. The sooner you find that new client, the sooner you can pay your own debts.

Remember, you are not a charity. You are a business. You have obligations to your own suppliers (such as your ISP), yourself, and your family.

Over a 40 year career, I've spent almost half of it freelancing. It's a hard lesson to learn, but in my experience the day the client misses the first payment is the day you stop work. Often, simply telling your contact that you are going home, and will return when their check clears, can be a marvelous motivator. With back-to-back contracts, it can also cause the end client to put pressure on the middleman to pay up.

But note this, if a client misses the first payment there's a very good chance they will miss the next one as well - or the one after that.

One vitally important thing to always know is the limit for a small-claims action in your area. If you let the arrears get beyond that limit, you are facing legal costs if you ever hope to get the money back. I have worked on direct contract, and through agencies - and have sent the bailiffs in with both types.

If you file a lawsuit, the client will fight it - ratcheting up the legal fees and potentially damaging your reputation. It will consume huge amounts of your time - time which could be billed to the next customer.

With a small-claims case, the costs are usually minimal and can be added to the claim. Even the time commitment can be minimal. Also, a client with money troubles will often fail to respond to a small claim (worrying more about the people who are threatening to sue for large amounts) allowing you to get a default judgement. That makes you a registered creditor if it really goes pear-shaped.

Another consideration here, reading your explanations of the arrangement in various comments.

Your 'employer' who pays by paypal is in breach of contract. Depending on your country, even without a written contract, you can show a history of payment and probably establish an implied contract.

I suspect it isn't your employer's client who isn't paying up - but instead the middle-man. In that case, you should be able to talk directly to the client. Either get them to put pressure on your employer, or contract directly with the end client. There's even a possibility that the end-client is still paying your employer, and it's just not trickling down to you.

If you do the latter, be sure to negotiate for the hourly rate your employer was charging them - not what they were paying you. You'll need to cover the costs your employer was shielding you from - and smooth out your own cash flow. If you were (once upon a time) being paid weekly by your employer, you can bet the end client was paying monthly and will expect the same terms.

Answer 3

Do you have a contract with this company?

In most cases it shouldn't be your issue if the end client isn't paying your 'employer'

Are you working in a freelance sense or though your own company? UK/USA?

Assuming you invoice this company do you have a payment date on it? eg 'Within 30 days'

When I have had late payments from companies I usually send them a reminder email with the original invoice. My process is usually like so:

• 7 days late - reminder email.
• 10 days late - polite phone call.
• 14 days late - Signed for letter with original invoice attached politely informing the client that they may incur additional charges owing to their original non-payment.
• 21 days late - Final Demand (never got past this stage)

Pretty much of what is written here (UK based)

http://www.contractoruk.com/limited_companies/contractor_late_payment_letters_-_free_templates.html

Don't be scared of putting your foot down, as you said yourself you have a family to feed

Answer 4

Sometime [In rare case]it happens that employer has situation and can not pay you regular. But if you have been working for that employer since very long time and paid regular since many months then you should not demand but just request them that please do not delay payment. Also you should know that how that employer reputation is in market. That will help you a lot to make quick decision.

If you have been working since very short time then you can warn and demand for pending payment. but here you must have written proof of work you have done or any other contract which is done between you and employer. You can stop work if they do not pay.

Answer 5

Well, in some cases there´s not much you can do but wait. My opinion is that it all depends on the situation the employer and its industry is in. In some cases you might want to put some pressure, in others you might want to wait (more than we want to).

The important thing is NEVER loose your temper. It's better to get paid late than to never get paid at all. And of course, get to know your employer so you can have more information about how to proceed.

If we can't handle not being paid for a while then that's something that we have to manage either by cutting costs or getting funded. Easier said than done of course.