Facing Financial Mismanagement at Work: What Legal Actions Can You Take?

Have you ever found yourself in a situation where your employer continually bounces checks, fails to add hours accurately, or pays you late? It's a frustrating experience, but the question is: what legal actions can you take?

Understanding the Legal Landscape

The scenario you've described is sadly common. If a business is consistently failing to meet its financial obligations, there are several avenues you can pursue, though each comes with its own set of challenges.

Can You Sue the Company or an Individual?

Corporations: When dealing with a business entity, your options are limited. If the business is indeed “broke,” you may struggle to recover any compensation through a lawsuit. Corporate assets are protected by limited liability, meaning you would be hard-pressed to get any money from a company itself, unless there has been personal misappropriation by the owners.

Individual Owners: If the owner is an individual and has personally guaranteed the debts, you might find a path to recovery, but this can often involve extended legal proceedings and the risk of the owner hiding or transferring assets.

Legal Advice for Your Situation

In situations like the one you're facing, the most sensible advice might be to quit your job immediately if possible. Even if you find a minimum wage job, you are likely to earn more than from a company that consistently bounces checks.

Government Intervention

There is another important step you can take: report the issue to the Department of Labor. This is an option even if the company is in financial distress. By involving a governmental body, you increase the chances of getting some form of financial relief for both yourself and any other affected employees. You also avoid the costly and cumbersome process of hiring private legal representation.

Actions in the United States: For those in the US, this means contacting the State Labor Board. Reporting your employer can help bring collective action against the company for non-payment of wages.

Preventing Future Issues

When a business consistently has difficulty paying you, it's wise to find another job. Employee wages are a low priority in the bankruptcy process, likely to be among the last debts paid. Additionally, companies in financial trouble may have already pre-emptively deducted taxes and insurance premiums from their employees' checks, leaving employees with an even smaller paycheque.

It can be tempting to sue a company on the verge of bankruptcy, but it's often not worth the aggravation. Debtors in financial trouble may have already shuffled funds out of reach, making it difficult to recover any significant sums.

Conclusion

When faced with an employer who is consistently failing to pay you on time, or at all, the best course of action may be to seek alternative employment and report any violations to the appropriate governmental departments. While legal action may seem like a straightforward solution, it often comes with significant challenges and pitfalls. Protecting your own best interests is key.