Salary payment advice needed

[Vetplant]

I need some pointers.

 

I am the sole breadwinner, wife just had our 2nd child three weeks ago, first kid is three.

 

Now, on boxing day we get an SMS saying that our employer will only be paying 80% of our salaries this month, they will get the rest to us ASAP.

 

What should I do, what are my rights?

 

What pisses me off is that they probably knew this at the end of November already, but they didn't have any decency to tell us to our face, they just sent us an SMS.

 

Flippin fun R&D engineering firm, but I need to think about the future of my family, not just the fun of engineering.

[Stretch]

If this if the first it's happened and if the company is relatively new then don't be so quick to jump ship. In our first 2 or 3 years we had the odd month that we only paid ourselves 50% of our director salaries.. Granted we paid all the staff first... But sometimes cashflow are just not there

[Swany05]

Hold up,

 

You get an SMS on boxing day saying that you will only get paid 80% of your salary for December?

 

I have been at some pretty shitty companies in my life and the latest I have been paid in December is the 23rd

 

If I was you I'd seriously reconsider my options.

 

What sort of engineering firm is it?

[Vetplant]

Hold up,

 

You get an SMS on boxing day saying that you will only get paid 80% of your salary for December?

 

I have been at some pretty shitty companies in my life and the latest I have been paid in December is the 23rd

 

If I was you I'd seriously reconsider my options.

 

What sort of engineering firm is it?

Yep, money not in the bank yet, hopefully tomorrow..

 

November and October salaries were a couple of days late as well... but at least it got paid in full.

 

It is an aerospace company for what it is worth.

 

Sending some CVs out to get a feel for what is out there.

[Long Wheel Base]

Tough one. You say aerospace, the industry is struggling at the moment and not just financially. The authorities are getting so strict with compliance that a lot of 3rd party companies are getting less work due to not complying. I am not sure who most of your work is for but even we are sitting with issues where 3rd party companies have had their authority pulled and we sit with unservicable components and these are big companies in Europe that aren't complying with the SACAA/EASA/FAA. It is so bad that soon we will have aircraft AOG if they don't come right.

We were meant to get paid on the 21st and then last week we got told(it was also in the news) that there was no money for salaries. The banks have given us some loan or something till March for salaries only(so expect us to get another bailout soon) and we got paid on the 24th. A lot of people complained but I was just happy to get paid and our normal pay day is the 27th so it's still early. 

My boet used to work for a security company of sorts(not security guards etc, they did cctv installations/high spec security upgrades to rich peoples homes and monitoring of cctv offsite) and they also started getting paid late and short paid. Eventually my boet just left but he later found out the boss had some "issues" and was "wasting" the money away. 

So I hope in your case that the company is just going through a rough patch and 2019 they will do much better.

[Chris_]

I'm slowly realizing that being 'happy' to spend 75% of your waking day in a single office chair is an absolute privilege. I chased what I thought I wanted, got it, came to reckon it wasn't all that, now I'm a little stuck in a pretty niche industry (as well). 

 

I know its easy for me to say this with basically an equal earning wife, and no kids, but stick with the career that keeps you excited. Do it for the rest of us!!

[Dicky DQ]

This time of year is bad for smaller companies, they may have had the projected revenues and intended to pay, but then the receivables just did not come in. 

 

I know, as I have a similar problem with our customers, we do the work in Oct, Nov, Dec and expect to get paid so we can pay staff etc. Then the customers end up paying their staff bonuses etc and hang us out to dry. 

 

So it is quite possible that your company had every intention to pay full salaries etc. but come this time of the month they see they can't. I would go with the flow if you enjoy the work and environment and hopefully the management have also taken a cut. Most times in cases like this they may even not take anything.

 

It would be interesting to see what they did, if they also took a hit as then they are good upstanding guys, if not start looking around.

 

You will be amazed how many times small company bosses take nothing just to keep the staff paid. It is a scary place to be these days.

[Red Robin]

Not sure if this is at all applicable to you. Unfortunately there have been a few cases whereby when companies are battling they also don't pay over statutory returns/provident fund/med aid etc even though the deductions are made from the employees' salaries. I'm not saying this is the case in your situation at all but it might be worthwhile to cross check for peace of mind. Especially industry governed provident funds who only send out statements quite infrequently.

[Boerklong]

My friend got paid 8 days later in November, 6 Days later in December and they promised he will get his December bonus before 15 January.

[PURE]

Sit down with the bosses and ask them to be honest and evaluate properly for yourself where the business is.

 

The thing you need to work out

• is the business in trouble, e.g. not enough customers and work right now and in the future to pay the bills
• or is it just purely a cashflow problem where you have enough work returning the right margins, but the company is getting paid late and doesn't have a credit line to smooth things out.

If the message is we don't have enough customers or work or don't know where and how we getting customers or work. Or we working below cost just to get business. This is a sign that you should start considering your options.

 

If the message is we got enough work, and the margins are right and we know where our next set of customers are coming from and the company is been paid late. This is normal teething problems and you most likely won't need to scramble for work as the doors won't likely close on you.

 

I have been on both sides of the fences.

in 2014 the company I worked for went into business rescue [cash flow issues], 2 days after the news, my 2nd son was born and 6 months after that I threw caution into the wind and joined a startup. That company is still around today, a 3rd of its size and regrowing.

 

The startup I joined went really great for 18 months, the business was growing we were expanding into 2 new markets. I employed a team of people to help continue to grow the business further and then all of a sudden our main customer got into trouble scaled back and 6 months after hiring a bunch of people we had to let them go. The company limped on for another 12 months and then closed its doors.

 

You got to decide which path the business is on and make your call from that.

Edited December 30, 2018 by PURE

[IceCreamMan]

Normally this is a sign that the ship is sinking.... sorry to say. The next step is that everyone agrees to a reduction in salary and finally curtains.

 

Yes, I am a realist( some would say pessimist) but been there , got that t shirt.

 

Suss it out, if this is a one off cash flow issue then all good, unlikely but I guess it does happen. If it’s likely due to deeper issues then find another company. Sad thing is unless the business is family type of business the owners don’t actually care bout you...cynical ,yes, I admit to that.

 

Maybe I have some anger issues from 20 odd years ago when I got shafted.

Edited December 31, 2018 by IceCreamMan

[Vetplant]

Thanks for the all the feedback guys, good to hear all the opinions and advice.

 

I have a friend at work, his wife is in finance and thus I get some inside info in drips and drabs.

 

Basically, this has been coming a long time already, at least a year.

 

The financial backer is basically not been pulling his part in getting the company up and running and we have been paying suppliers late for a while now. While in the meantime the CEO has just not been honest with the people of what the actual state of the company is.

 

Before the December shutdown he just sent an odd email saying that he is really counting on our unwavering commitment to the company. That was already a warning that something was up.

 

We are more than 3 months away from being able to deliver the first production product to the client, so we are probably in for big problems until at least that point.

 

It is a really tricky situation, don't know whether it will be the resounding success everyone is punting it's to believe and whether it is worth the risk to stick around to find out.

 

We do have some savings to dip into, but 4 months of receiving short-pay and nothing knowing whether we will be reimbursed is a massive risk.

 

In the mean time, I am putting the CV out there to see if I even have options, 80% of your salary is still more than no salary at all and I am not yet comfortable to launch my own consulting operations from scratch.

 

If anyone knows of a vacancy for a Mechanical Engineer, please drop me a PM.

 

Happy 2019 everyone!

[GLuvsMtb]

I've had the worst of what you are describing. Contractual increases were frozen, salaries were being paid later and later, up to the point where I was not paid for 3 months and then were retrenched. This came to a head October 2017 and the company is still suspended from trade on the JSE and my retrenchment package, arrear increases and unpaid salaries of roughly R1 million is still due to me. 

 

In this time it is important to have frank and open discussions with your employer and get any commitment in writing where at all possible. Make the point that financial security is not negotiable for you and your family. Perhaps requesting a retrenchment is an option if you are fairly certain that you will get employment in your field fairly quickly. 

 

I should have left much earlier as the writing was on the wall for some time. The reality is that if salaries are being paid late, you can bet your house that SARS and other key creditors such as rent, provident fund etc. are also in arrears at this point, putting the company at huge risk financially. 

[Vetplant]

So, a further 25 days later, no resolution in sight. We haven't got our outstanding 20% from last month yet and the internet at the office went off on Tuesday due to non-payment. Not looking good.

 

The issue is that we are a tiny group and we should have been fine with our Capital in the bank. But we fall under an umbrella consortium and our sister company was getting into trouble, so they used our cash to fund the salaries of our sister company, which is 10 times our size by the way. Same shareholding accross the board, so they are probably entitled to do what they want, it just sucks that our small group is being pulled down by the big group.

 

Ah well, will see how this pans out. In the meantime I am browsing the career websites for options... Feels like I shouldn't hang around this lot for too long even if this current situation gets sorted out.

[mazambaan]

Just out of the blue - any chance you can get some acknowledgement that the company owes you the rest of the salary?  At least become a creditor.

[BaGearA]

Anyone I can I PM regarding some of the issues discussed in this thread?