Company folding & can't pay staff...

apple_jack_2

Hi,

I need advice. I have 2 work/pay issues that came to a head last week.

1. This week I have been told that the company may fold shortly and that they cannot afford to pay any of their staff. This means we are all owed our full wage for January with no payment date in sight. All company employees have been asked to continue working this month despite the lack of pay and uncertainty of continued trading.
Additionally, the company owe me several thousand pounds in outstanding expenses, which I do not believe I will get back as the company is no longer solvent.

2. In my job I’ve managed to quickly jump up the payroll ladder much to my delight (and extremely hard work)
Oftentimes the pay rises have been informal and covered in quick conversations with either of my 2 managers.
So, back in the autumn I started seeing more than my contracted amount appearing in my back account each month. I didn’t notice it at first as after tax, NI and student loans etc it isn’t a huge amount and my company is pretty lax about handing out payslips promptly.
The increased amount continued until now.
Last week, the payroll error in my wages was pointed out. I had come to the conclusion that I had simply been bumped up the pay chart again and that as I report to 2 bosses they each thought the other had told me. Unfortunately it was an accounting error. The amount is small but it means a lot to me and I cannot afford to repay it.

My questions are:
1. Do I have a duty to repay the wages, as it was their mistake?
2. Do I have to repay the wages in a set amount of time?
3. Do the unpaid expenses have a bearing?
4. Does continuing to work for the company in the hope of receiving pay in future sound foolish? (I’ve just put my CV back into circulation anyway but a job offer may take some time…)
5. What would you do?

Thanks for all advice!

hullight

You need to keep any known overpayments aside ready to pay back if requested.

Innerapple

How big is the company, and is there a union?

rupee99

apple_jack wrote: »

My questions are:
1. Do I have a duty to repay the wages, as it was their mistake?
2. Do I have to repay the wages in a set amount of time?
3. Do the unpaid expenses have a bearing?
4. Does continuing to work for the company in the hope of receiving pay in future sound foolish? (I’ve just put my CV back into circulation anyway but a job offer may take some time…)
5. What would you do?

Thanks for all advice!

1 Yes, doesn't matter whose mistake, you have received something that you are not entitled.

2 Theoretically they could deduct it from your next pay cheque, but as you are not being paid that is not relevant. You do not have to repay it whilst they still owe you money.

3 You have something known as the right of "set-off" you can set anything you owe them against what they owe you, including expenses.

4 Not in today's environment, what else would you do with your time? It's better to have a chance of continuing employment than none at all, unless you think you have a good chance of picking up another job in the near term.

5 No comment

ceridwen

I think it would be wise to hold onto that overpayment until you sort out whether you have received all the monies due from them first.

Once you have received all monies due from them - THEN and only then pay them back the money you owe them.

I say that because I have a strong suspicion you never will receive all the money they owe you - therefore you need to hold onto that bit of overpayment earlier in order to "make good" a bit of your likely losses.

Certainly I would definitely do that myself - eg if I had been overpaid £500 in one hand - but they owed me £2,000 on the other hand = I would be sitting there thinking "they owe me £1,500 net then at the moment" and regard that overpayment as them having (unwittingly) handed me £500 so far towards that IYSWIM.

For goodness sake - DONT hand it back in the circumstances. You do want to mitigate your likely losses as much as possible I presume:cool:

apple_jack_2

Thanks everyone, that's great advice.

I certainly don't have the money available at the moment to repay the overpay - I'm scraping the bottom of my overdraft and was counting on my January pay packet.

Do you think there's any chance I can argue that I thought it was a salary increase in good faith? - during the month I received the first overpayment I did take an increase in responsibility.

Although should the company recover, I don't want to be on bad terms with my employers but if there is a way to legally keep the overpaid money I'd love to hear it!

I've also hear that some struggling companies offer their staff some type of compensation for forced or voluntary delayed payment. (Deferred payment?) Does anyone have experience of this? Presumably an agreement is usually put in place prior to the lack of pay rather than finding out on the day that it wont be received. What type of things can be offered to make up for the delay in pay?

It's only a small company with no union etc so I'm on my own with all this.

ceridwen

I would certainly argue that it had coincided with an increase in responsibilities - so I had thought it was rightfully mine. Further - I would point out the "informal" nature of previous pay increases.

I doubt they could prove otherwise.

I do have to say though that I honestly dont think that its that likely that you will end up owing THEM money overall. I hope I'm wrong - but it doesnt look good to me overall. So do for goodness sake - hold onto that money.

Please - for your own sake - keep it. You will certainly regret it if you handed it back to them - as they will then end up owing you even more money than they are likely to at present:eek:

You will thank me for this advice unfortunately - believe me....

apple_jack_2

You're absolutely right Ceridwen, I will keep hold of the overpaid money until they repay me the owed wages and expenses!

It all seems very disorganised - they haven't even told me how much they've overpaid me by or the amount they expect beck.

I simply got an email last week saying I wouldn't be paid for the foreseeable future and then this week an email asking me to pay back the overpay in a lump sum.

So, I plan to strip back the work I'm doing for the company until I get paid - that way, should the company recover, I'll still get paid for this month. But I also wont feel like quite such a mug if the company does fold owing me money.