Late/Non-Payment of Salary: What to Do?

Question: “My employer has not paid my last month’s salary and can’t specify the date of payment, what are my options?”

If your employer fails to pay your salary or is late in paying your salary, then you should know that this is legally a breach of your employment contract. An employer – employee relationship is a contractual relationship whereby the employee agrees to provide his/her services and skill in furtherance of the employer’s business. The employer in turn agrees to pay a given amount (salary) to the employee for his/her services on a recurring basis (most times a monthly basis).

If your employer is a good and responsible employer, then the odds are they would have informed you already of the reasons for the late (non) payment of salary before the salary was due. If they have not, then you should do the following things:

1. The first thing you should do is find out if it is a general issue, have other employees been paid? If it is a general issue, then you skip reading the rest and move to point (2) below.

• 1.1 If it is not a general issue, and you are the only one who hasn’t been paid then you need to speak to your employer through the Human Resources department, it might be that there has been an error in payroll that month. If it is not an error, then the next action is in (3) below.

2. In a situation where it is a general issue, then the next thing you should do is to ascertain is the reason why your salary has not been paid by speaking to your employer, it might be more effective if you all come together and nominate someone amongst you to inquire as to the reason why you have not been paid. If you are a member of a labour union or work association, then you should speak to them and they will handle the inquiry and discussion with your employer on your behalf – that is what they are there for, to represent the interests of their members.

3. Once you get a better understanding about the underlying issues for the non-payment of the salary, it is then up to you to decide if you accept the reasons behind the late/non-payment. The next step is to decide what line of action you take. Potential actions you could take include –

• you continue to work there until the issue is resolved and you would be paid all back pay including a loyalty bonus for your understanding and perseverance

• another course open to you is where you are unable to continue attending work (maybe due to financial constraints), you and you and your employer decide that you do not come to work for an agreed period of time until the issues are resolved, basically a mutual suspension of your employment contract, this way you don’t continue to work for free and the employer doesn’t continue to rack up salary debts

• you resign, if you don’t believe that the situation is temporary and you do not have any confidence that it will be resolved in the near future.

The above are just a few of the options you have and the list is by no means exhaustive. Just remember that you have the upper hand and the employer is the one in breach of the employment contract.

Please be aware that if you choose to resign, this does not mean that you lose your right to ask for the salary which is already owed and has not been paid, you still have that right, all it means is that you do not want to continue working there with no realistic expectation of payment. If you decide to do this, then you can terminate the employment contract on the grounds of breach of contract by your employer (non-payment of salary), and it is likely that you will not have to comply with any notice period.

Finally, some tell tale signs that the company might be in financial trouble and you should consider leaving include:

• Your employer is not being open and honest about the reason for the late/non-payment
• Other employees have not been paid
• You are aware that some suppliers and third parties who offer their services to the company are being owed for their services of products

Taking the decision to resign is a difficult one, especially when the economy is difficult and there are not that many jobs out there, but you should remember you’re better off spending your time and energy looking for someone to work for who’ll pay you than working for free for someone who won’t. You owe it to yourself.

Next Steps

Are you being owed salary by a current or past employer? Need to write a letter to recover your salary? We have created a free template which you can use here. Download the Unpaid salary recovery Letter.

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We hope you have found this information helpful. Please note that this information is provided for general informational purposes only and is not intended to be legal advice. No lawyer-client relationship is formed nor should any such relationship be implied. This answer is not intended to substitute for the advice of a qualified lawyer. If you require legal advice, please consult with a qualified lawyer.