question on pay

ketel

hello,

I own a small corporation with 3 employees. I dont have any HR people and handle most stuff by myself. All 4 employees (including myself) are part owners. I own 51% though and have full control of everything.

This is my problem.....

about a month ago our largest client went utof business, and of course did not pay thier bill. Payroll came up and I was able to scrape together enough money to pay payroll taxes when ADP deducted them on that Thurday, but no way had enough to give the employees thier pay checks, because they would have bounced Friday. I gave them the checks and asked them to please deposit them on tuesday. The money was there and everyone got paid.

TWO WEEKS later...
Still short on cash of course

same problem but this time I give two of the employees about 70% of thier checks Friday and promise the remaining 25% on the following wednesday. Wednesday came and I made sure they each got thier paychecks (the third employee has no problem holding her full check, and told me she would do so without me asking).

Now on wendesday I decied that I cant be late with pay anymore and decied to let one employee go. The employee is now saying he is calling EEOC and going to sue me for paying him late. this is a shareholder/employee that I gave part of the company when we started without any investment but TIME on his part, and now I am going to pay him for the shares I GAVE him to get them back... Anyway he is promising to cause me problems.. what problems can he cause for my company?

Now remember he recieved ALL money due him just 4 days late two times.

Don D

There is nothing the EEOC can or would do, except perhaps refer him across the hall to the wage and hour division of the DOL. They would have to authority to investigate the non-pay or slow-pay complaint, but in all likelihood are way too busy to fool with this since you ARE paying, albeit slow. If you had refused to pay wages due or had paid less than minimum, they would come see you probably or call. If you have an active State DOL, they may also field a complaint; but, my guess is you'd find the same degree of hesitancy there. Just my humble, late nite opinion.

System

The EEOC handles discrimination issues, not pay issues. If you let this employee go because he is in a protected class, then he has something.

Since he received all his money, though late, I don't believe the DOL will act on it.

Get some sleep.

LeeR

I agree with the other posts, EEOC will refer the ee on for late pay issues. DOL probably won't get to concerned because the pay although late has already been paid.

Just my opinion.

Shadowfax

No good deed goes unpunished! Congradulations on doing your best to take care of your people. You might also check with counsel. because some states limit employee actions if employees are at least X% owners. Maybe none of your people fit the bill, but it's possible. Good luck!

ketel

Thanks all!!!

I was so worried the govermant would come shut me down becaue I was a few days late with thier paychecks

I love this board because it allows me access to people with such bright minds in the HR field.

marc

Sorry to hear of the difficult financial times you are experiencing. It sounds like you did some good things on the front end for your employees by making them part owners. Of course, on the front end, no one thinks about the bad things that can happen, but I bet these EEs were aware enough to know things were bad.

Your instincts about paying payroll taxes is a good one. Not paying them can lead to criminal charges as well as civil fines and penalties. And the people chasing after those dollars have deep pockets and do not care if it costs them $5 to collect $1, they just keep coming.

You got some sage advice from the posters above, now it is time to retrench and go find some more business.

Good luck.