Employer possibly going bankrupt, but not admitting it. What are my rights?

[Wild Lupine]

I work part time for a non-profit. Today the business administrator basically whistle-blew on the board, letting all the staff know that there is no guarantee there will be money to make payroll for the next pay period. It was done by email (no work today due to a storm), very diplomatically worded, not sensationalist or alarmist, just an explanation as to why she would not be working for the next pay period, and that she needed to consider the logistics of filing for unemployment. She is an intelligent woman who is very kind and has tons of integrity. I knew the business has been struggling recently, but naively assumed that if it was bad enough that it couldn't make payroll, someone would have told us!

I emailed her individually and she said the director has been urging the board to contact all staff about this situation and the board has not done so. The board knows the business administrator has informed the staff, but has still not contacted us.

I'm still absorbing all this and what it means. Do I go to work next week if there's a good likelihood I won't get paid for it? An email from the business administrator, however reliable and trustworthy she is, is probably not enough grounds to break my contract, file unemployment, and/or look for more work.

I'm not unionized, the staff is small, and I have no idea what my legal rights are in this situation.

ETA: I guess I should say I know my rights- to get paid for the work I do - but am not sure how to protect them. If the board isn't going to come clean do I have to wait until I don't get a paycheck before it's justified that I break my contract?

Maybe this is better in another forum... consider this a crazed, 'help, I'm already broke, can't afford to lose even one paycheck, and have way too much on my plate as it is' kind of post. Any support and advice is welcome!

Edited by Wild Lupine - 4/2/11 at 3:51am

[GuildJenn]

Well first, hugs - what a hard position to be in.

This is not legal advice because I have no idea. For me professionally and ethically, I would work until the paycheque actually does not arrive. I suspect that the same is true for claiming unemployment - you can't stop going to work and declare that you're not going to get paid in the future and file a claim. But I could be wrong and if you're in a position to collect unemployment, I would call them first thing Monday to see what they advise.

In the absence of better information, I wouldn't pre-emptively stop working. But I would at the same time start looking for other work aggressively. ETA: Like, spend today getting my resume etc. in order and start applying. Good luck...what a stressful situation!

[shayinme]

I am the Executive Director of a non-profit, my advice is to keep going to work and like GuildJenn said  at the very least you have to wait for them to not pay you. One of the reasons the board may not have told anyone is that they may be trying to get some money together. Depending on how your organization is funded if its through government contracts they might be looking at getting a loan from bank against those contracts or a line of credit to make payroll.

Years ago I worked at a shelter that had some issues yet they somehow made payroll and checks never bounced. If you leave before anything happens without official word you most likely won't get unemployment benefits. I also worked at a place that went bankrupt 2 weeks after I started but I did get unemployment benefits so while this is nerve wracking, I would say carry on.

The other thing is that by the administrator telling you this they may be hoping you quit so they can avoid paying unemployment, so stay until they tell you the job is over.

[VisionaryMom]

My mom worked at a place that for years would talk about not making payroll. They always managed to, and they're actually thriving now. I wouldn't stop working because you really don't know what's going to happen. There could be very good reasons that the board members opted not to tell employees.

[shayinme]

Originally Posted by VisionaryMom 

My mom worked at a place that for years would talk about not making payroll. They always managed to, and they're actually thriving now. I wouldn't stop working because you really don't know what's going to happen. There could be very good reasons that the board members opted not to tell employees.

I agree, my guess is if they told people before the knew for certain folks would just quit. Really the board and Executive Director are the folks who should be saying something until they tell you I would just do my job.

[Wild Lupine]

Thanks everyone, for the advice and multiple perspectives.

From what I know of the personalities and characters involved I think the business administrator is the most trustworthy person here, and if she felt the need to notify staff about this, things are probably pretty dire. But maybe there will be a last minute funding source or a line of credit somewhere.

But... as you all say, I have no legal ground to stand on until the board issues layoffs or I fail to receive a paycheck. So I just going to carry on going to work as usual. And update my resume.

[LynnS6]

I would also check the unemployment laws in your state. Find out what they have to legally do to ensure that you would get unemployment. I know that my brother has been in a couple of jobs where it was clear they were having trouble paying employees, and they would try to get the employees to quit, rather than to be laid off. Where he was, if you quit, you don't get unemployment. If you get laid off, you do. On the advice of my parents, he always made them fire him. (My brother is a nice guy who doesn't like to make waves, he would have quit.)

I'd be worried that if you don't go in to work, they can accuse you of quitting. If you 'quit', then you might not be eligible for unemployment. I would think that being eligible for unemployment might be worth a week's worth of work unpaid.

[Emmeline II]

Also, you could do a consult with an employment attorney.

[Wild Lupine]

Originally Posted by LynnS6 

I would also check the unemployment laws in your state. Find out what they have to legally do to ensure that you would get unemployment. I know that my brother has been in a couple of jobs where it was clear they were having trouble paying employees, and they would try to get the employees to quit, rather than to be laid off. Where he was, if you quit, you don't get unemployment. If you get laid off, you do. On the advice of my parents, he always made them fire him. (My brother is a nice guy who doesn't like to make waves, he would have quit.)

I'd be worried that if you don't go in to work, they can accuse you of quitting. If you 'quit', then you might not be eligible for unemployment. I would think that being eligible for unemployment might be worth a week's worth of work unpaid.

I'm definitely going in until the first missed paycheck. After that it's either a layoff notice or I contact the labor board. I know all that stuff about keeping 6 months savings in the bank but we're paycheck to paycheck here - on a good month - and it actually costs me money to go to work given childcare and gas prices. So I can't really wait them out without defaulting on the mortgage or something equally dire.

I might not be eligible for unemployment given that I'm 'just' part time (among other reasons), but a layoff notice might help with negotiating other bills and refinancing the mortgage.

Originally Posted by Emmeline II 

Also, you could do a consult with an employment attorney.

Yeah, maybe there are some ones who do free consults. Good idea.