What To Do When Salary Payment Is Late or Defaulted

When a company or an employer employs you, a contractual employer-employee relationship is sealed by the law from the point of employment onwards.

Employers are required by law to pay your salary and never default on said payments. However, there are cases when employers default on employees' salary payments due to one reason or another.

In events like this, a responsible and competent employer would give reasons for late payments or lack thereof. However, in a case where your employer has provided no valid reasons for late payment, here are the steps you should take for a definite resolution.

Step 1. Event Investigation

Once payday comes, and you don't get your paycheck, the first thing you want to do is investigate the nature of the event to determine the generality of the payment situation.

If the situation is unique to you, meaning only you weren't paid, you can lodge a complaint through the human resources (HR) department.

Your salary could have bounced due to a payroll error from your employer's end. If this is not the case, check out step 3 for your options.

Step 2. Engage Your Employer

If the payment situation is general, what you want to do next is talk to your employer and engage him on why he hasn't paid you.

We recommend that you moderate your co-workers and choose a representative to lodge an official complaint and inquiry as to why your payment is late.

Another alternative is the labor union or work association. If you are a member, you can get them to talk to your employer on your behalf; after all, they are in business to represent your interest as a member.

Step 3. Determine Course of Action

Now that you've sufficiently understood why your payment is late, it is now up to you to determine your next course of action.

Depending on whether you believe your employer's reasons or not, you could:

• Continue working as an employee until resolution. Note that when you are finally paid what you are owed, your employer is mandated to pay for interest or a loyalty bonus for the delay. You can consult a compensation lawyer Burwood to learn more.

• Negotiate a mutual suspension with your employer. If you can't continue working without pay and you don't wish to completely resign, you strike a win-win deal with your employer where you don't come to work until you are paid, and he doesn't continue to accrue salary debt.

• Resign and file for compensation. Suppose you've determined that your employer is incompetent and irresponsible or believe that the situation is not temporary. In that case, you can decide to terminate your employment contract citing breach of contract. You are entitled to your pending salary and compensation by law.

The highlighted options are by no means definitive; they are only our recommendations and don't represent all your options. A visit to a compensation lawyer will enlighten you on all the options available for resolution.

Don't ever forget that you are in the right no matter what.