Contract Stated- month in hand, wages paid month in arrears.

Hew

I started working for a newly set up company, the contract stated pay would be a month in hand but when it came to the end of the first month we (the employees) found that we were not to be paid till the end of the second month (a month in arrears) I am now worried that if the company ceases and the contract has stated "a month in hand" will I legally be out of pocket for a months salary and if there is a danger of this what action can I and other employees take to ensure this doesn't happen?

HappyMJ

Hew wrote: »

I started working for a newly set up company, the contract stated pay would be a month in hand but when it came to the end of the first month we (the employees) found that we were not to be paid till the end of the second month (a month in arrears) I am now worried that if the company ceases and the contract has stated "a month in hand" will I legally be out of pocket for a months salary and if there is a danger of this what action can I and other employees take to ensure this doesn't happen?

Quitting and finding another job that doesn't have quite so much of a delay between working and payment.

You can ask for an advance on your pay. Most companies will give you an advance if your next pay day is so far away....especially if you have just come off benefits...as you will still have all your bills to pay and travel costs as well.

As the company has just been set up I wouldn't trust them at all and demand that payment be made at the completion of the month....but that's a risk you need to weigh up....I wouldn't take it...but that's me.

olias

Surely being paid a months wages at the end of the second month is 2 months in arrears not 1 and you are entitled to earned pay for the previous 2 months work? I have always taken a month in arrears, as meaning you get paid at the end of the month in which you earned the money as per this definition....

http://dictionary.cambridge.org/dictionary/british/in-arrears

Olias

Hew

I asked for a sub which I received, at the end of the second month I was paid the balance of the first month, I understand this is common practice though it's the first time I've been paid this way, I'm very worried not just for myself but for my fellow employees and wonder if there are any measures we can collectively do to avoid being out of pocket if the company collapses.

Hew

olias - the fact is the contract stated a month in hand, this is what particularly concerns me.

HappyMJ

Hew wrote: »

I asked for a sub which I received, at the end of the second month I was paid the balance of the first month, I understand this is common practice though it's the first time I've been paid this way, I'm very worried not just for myself but for my fellow employees and wonder if there are any measures we can collectively do to avoid being out of pocket if the company collapses.

You will eventually get the money owed but it may take months even years for payment. You would be on the list of creditors to be paid...but if the company has so little money it can't pay you the government will. https://www.gov.uk/your-rights-if-your-employer-is-insolvent/claiming-money-owed-to-you

Missme

Unless the company paid 2 weeks in arrears and 2 in advance with the month in hand, is this not what you'd expect? Either way it would be 6 to 8/8.5 weeks before you got paid.

Not aware of anywhere that pays in advance.

Hew

Thank you, your link is very useful. Do you think we would still be paid all owed though bearing in mind the wording of the contract.

flashnazia

Have you got dates? When did you start? Paying 2 months in arrears is not common practice. It also means you won't get the first months pay until you leave.

AP007

flashnazia wrote: »

Have you got dates? When did you start? Paying 2 months in arrears is not common practice. It also means you won't get the first months pay until you leave.

And as a start up business if they go bust you may not ever get it OP

Hew

This is precisely my concern, particulary as I have recently found out this is not the first business started up in the past few years by my employer.