Job Tips

What if my employer can no longer pay my wages?

My employer can no longer pay my wages. Do I go to court?

Your employer is legally obliged to pay your agreed wages as compensation for the work performed. The none (timely) payment of wages even constitutes a crime. Besides, interest is automatically payable on your overdue gross wages, at an annual interest rate of 2.75 percent (in 2014, reviewed annually).

Financial problem

It is not possible to dispute the debt of your employer. So the problem is not legal but financial. In the first instance, it is crucial to investigate whether the payment problems are transient or whether the continuity of the company itself is at risk.

If the situation is temporary, you can possibly reach an amicable agreement with the other employees in which payment modalities, a compensation scheme, and guarantees are worked out.

Imminent bankruptcy

If the water is right for your employer, you could seize the company assets as a protective measure and, in the event of persistent non-payment, force you to sell them.

Obviously, this obscures the relationship with your employer and may wake up other creditors, thereby even accelerating bankruptcy. In a bankruptcy, you are (almost) at the front of the queue of creditors to obtain payment.

If you do not have enough money to pay your debt, you can receive a partial payment through the closing fund.

In the hypothesis of imminent bankruptcy, you can, of course, always decide to leave the ship before it has sunk (possibly by invoking a breach of contract). I would only consider this if you are sure about another job.

Hopefully it will not go that fast.

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