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What To Do If Your Employer Suddenly Stops Paying You

6 minute read

Devon Taylor

By Devon Taylor

We all look forward to payday. In a lot of cases, it can’t come soon enough. There’s always a mountain of bills and financial obligations that need to be paid. So you can imagine how stressful it would be if payday just… didn’t happen one day. It’s rare, but what can you do if an employer suddenly stops paying you with no warning? Even worse, there might not be an explanation either.

Although it’s upsetting, you should never panic if an employer suddenly stops paying you. As an employee, you have certain rights and protections. There are steps you can take to collect back wages owed to you and protect your future earnings. Here’s what to do if your employer suddenly stops paying you.

It’s Illegal For An Employer Not To Pay

Employers failing to pay owed wages is more common than you might think. It’s not confined to one particular industry, either. Whether you’re an office worker on salary, an intern who’s been promised a stipend, or a waiter who relies on your fair share of tips, you’re not immune. Failing to properly compensate employees happens on a regular basis. The most important thing to remember is that it’s illegal (in most places) for an employer to not pay you for time worked.

First Steps

If you find yourself in this situation, visit your state’s Employment Development Department website. You’ll find information about filing for unemployment immediately. Next, contact an employment lawyer who can act on your behalf when negotiating with an employer for back wages owed. You’d be surprised how impactful a strongly worded letter from a lawyer can be in terms of getting back payments.

In the U.S., you can also contact your state’s Department of Labor office. They can start an investigation into your employer and why they failed to pay you. The Department of Labor can help you to get money you’re owed. In Canada, most provinces have an Employment Standards Office. They too can help you collect unpaid wages. There is no fee for these services. Employment Standards Offices can investigate the situation and order the employer to pay any money owed to you. The takeaway here is that the law is on your side should your employer not pay you. However, be warned that these processes can be slow.

Raise Your Voice (And Put It In Writing)

As soon as you miss a paycheck, you need to let your employer know. Speak up a little and have a frank discussion with your boss, the human resources department, and the accounting department. Document and summarize your discussions in writing and share them with senior people throughout the organization. This will let your employer know that you are going to hold them accountable. If you’re lucky, the non-payment was a mere oversight or computing error. In those cases, expect to re-paid quickly.

However, if something more nefarious is happening, you’ll need to go further. Document any interactions or discussions with your bosses. This will benefit you if the situation ends up in court. As mentioned, you may also want to retain a lawyer and have them send a letter to your employer on your behalf. The letter should outline the legal actions you will take if payment is not forthcoming in a timely manner.

You should also use your discussions with various bosses or co-workers to gain an understanding of the financial situation with the organization. Why were you not paid? What is going on with the company where you work? Is a bankruptcy filing likely? Or did the scumbag owner blow the commission fund on a new sports car? Obtaining a clearer picture will help you make decisions going forward, including whether…

To Quit Or Not To Quit

The temptation to quit in anger when you don’t get paid can be overwhelming. To be fair, it’s a reasonable reaction in the moment. However, take a step back. Consider a few things before you storm out. If you leave your current job, it will likely break off contact between you and the organization. That could make it even more difficult to get back wages that you’re owed.

As a former employee, you may also become less of a priority. If non-payment is affecting multiple employees, you just became less important by quitting. You could effectively end up at the back of the line to receive your pay.

On the other hand, if you choose to stay, you employer may end up owing you even more. Even if you’re confident you’ll get the money eventually, how long can you survive without a paycheck? An employer failing to make payroll doesn’t bode well for your future with the organization.

You may be better off staying put while you search for another job that will pay you consistently and on time. There are a lot of factors, like how long you’ve worked there, your relationship with the owner, and your own financial situation. Keep in mind that, in most jurisdictions, if you quit you will not be eligible for unemployment benefits. You will need your employer to lay you off or fire you in order to qualify. (Note: this varies from jurisdiction to jurisdiction. Sometimes being fired with cause leaves you unable to get unemployment.) We would advise to never make a hasty decision in the heat of the moment. You could end up regretting it.

What About Vacation Time?

If you do decide to leave your job, you should also know how to deal with unused vacation pay. Employers are legally obligated to pay out any accrued vacation hours or vacation pay. It doesn’t matter whether you are fired or resign, either. So if you’re preparing for a legal fight to get your rightful wages, make sure to include any unused vacation hours in your calculation.

Send Out Your Resume

Unless you have unequivocal trust in your employer (and you probably shouldn’t), dust off your resume. Even if you don’t quit, start shopping yourself around. The sudden lack of pay should be a clear sign that something is going wrong, especially if it’s a long, drawn out situation.

Getting a new job should become your top priority, especially if you’re not being paid at your current work and those bills are piling up. Do your homework and look for stable, reputable employers. Try to look for work in the same field where you’re currently employed, as they will be the easiest places to get hired quickly.

Be honest and upfront in job interviews about why you want to switch employers. Without being insulting, explain the difficulties you have encountered with getting paid by your current (or previous) employer. Once you secure new employment, resign from your old job. However, don’t burn any bridges. Make sure that you let your boss (and others within the organization) know why you are leaving and that they still owe you money. Don’t let them off the hook. Follow the steps laid out earlier in this article to secure the money that is rightfully (and legally) yours. Keep the pressure up, even if you leave for greener pastures.

The Last Word

Not getting paid is one of the worst things that can happen to an employee. Failure to be paid creates a situation that is stressful, disheartening, and even humiliating. Worse, it puts you in an adversarial situation with your employer. Suddenly you’re forced to fight to get what you’re owed.

While upsetting, you should remember that the law is on your side in these situations. Employers have the legal duty to pay employees for hours worked or projects completed. Use the law to your advantage. Hire an employment lawyer to fight on your behalf. In some cases, you’ll find a lawyer who works on contingency. That means you pay them a portion of the money they recoup for you. Keep in mind this arrangement only works for larger sums of money.

The process can be hard, especially if the employer digs in and refuses to pay for whatever reason. As you navigate it, take steps to protect yourself. Make sure you can claim unemployment benefits if needed. Start seeking out a new job. Staying calm, focused, and determined is the best advice if your employer suddenly stops paying you.

Man Opening Empty WalletShutterstock
Devon Taylor

Managing Editor

Devon is an experienced writer and a father of three young children. He's simultaneously trying to build college funds and plan for an eventual retirement. He's been in online publishing since 2013 and has a degree from the University of Guelph. In his free time, he loves fanatically following the Blue Jays and Toronto FC, camping with his family, and playing video games.


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