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My company missed payroll. Should I bail?

THE QUESTION

If an employer misses payroll, what would you suggest the employee do? Continue working there, or leave?

THE FIRST ANSWER

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Heather MacKenzie

The Integrity Group, Vancouver

Employment standards laws invariably require an employer to issue paycheques within a short window of time. In British Columbia, for example, pay must be issued to an employee within eight days after the end of a pay period, but in Ontario, the rule is more stringent as an employer must issue pay no later than on the pay day established for that period.

You should look at the applicable legislation for your jurisdiction and/or consult with the tribunal responsible for enforcing it.

Having said that, even the most reputable companies can miss a payroll cycle, so it is always important to distinguish between an isolated incident which usually has an acceptable reason (such as temporary software problems, or problems originating with a contracted payroll company) and a pattern of non-payment which is obviously much more disconcerting.

In the latter situation, the company might be facing a liquidity problem, and no employee wants to end up as an unsecured creditor for continuing lost wages against his or her own employer.

So assuming this is a one-off or a first-time occurrence, you should obviously make inquiries to find out why payroll was missed; if you are satisfied it won't become a repeat performance, feel free to stay on the job and recover your lost income on the next pay cycle.

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If you get the runaround, or your intuition tells you that this is a sign of bigger financial problems with your employer, it may be time to bail – but make sure first that you have a place to land (such as another job).

THE SECOND ANSWER

Greg A. Chung-Yan

Associate professor, industrial/organizational psychology, University of Windsor

How you respond largely depends on why and how often your employer is missing payroll. I am assuming this is a pattern by your employer; an isolated instance is not a call for radical action such as quitting your job.

If an employer knows that it is likely to miss paying employees on a scheduled date, it should inform staff as early as possible, explain the cause, and make assurances that this will be rectified in the future.

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Of course, not all delays in payment are anticipated or even known about until they happen. Payroll problems occur for any number of reasons regardless of whether it's a large operation or a mom-and-pop shop. So if payment is delayed, inform human resources – or whoever is in charge of payroll – immediately. Perhaps there are technical problems of which they are not aware.

Alarm bells should go off if payroll is delayed and you know management is aware of it, and no explanation is forthcoming.

If it happens repeatedly with a similarly anemic response, it could be a sign of incompetence or a general disregard for employees. In either case, these are certainly reasons to start looking for another job.

But until you do find another position, resist the urge to start slacking off or refusing to work outright. Not working to acceptable standards is likely to give you a poor reputation and could have an impact on your ability to find employment elsewhere.

Are you facing a burning issue at work? Need help navigating that minefield? Let our Nine To Five experts help solve your dilemma. E-mail your questions to ninetofive@globeandmail.com. Confidentiality ensured. Weigh in with your view at tgam.ca/careers. Check out past columns here.

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About the Author
Associate professor, industrial/organizational psychology, University of Windsor

Greg A. Chung-Yan received his bachelor degree in psychology from York University and his masters and Ph.D. in industrial/organizational psychology from the University of Guelph. He is currently an associate professor and the Department Head of Psychology at the University of Windsor, researching how people adapt to their workplace including work-related health and well-being and job insecurity. More

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