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Thread: Help! My boss is incapable of paying me in full...

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    Default Help! My boss is incapable of paying me in full...

    Hello, thank you for taking the time to read my post. I currently work in a small art manufacturing warehouse. I have been a faithful and loyal employee for the past 7 years. As of now, I am the only employee, other than my friend who occassionaly appears to do some deliveries. The mechanics behind this is very simple... Take the order, make a design, receive customer approval, make the piece, deliver and set it up. I've gotten very good at my job, so much so that the owner of the business hardly needs to show up. He'll field some phone calls, but ultimately, there is not a single order that does not go through my hands. The major issue I am facing is that my boss, the owner of the business, is in a massive amount of debt to the banks, the the irs, the board of equalization, and various other business contacts who have helped him on the way. Now he is even in my debt, I've allowed him to make small payments to me so that he can pay off his other debts... My mistake. He has a hole in his pocket, actually multiple holes. As I don't want to let this happen much longer, I need to start looking at my options. Quitting my job and finding a new one has always been on the table, but I love the work, so I put up with the bs. Filing for unemployment would destroy the business completely, since he is incapable of doing the work himself at this point, some people I have talked to said he would deserve it. Others have mentioned that I can take the business from him, either through bootstrapping or simply manipulating him into giving it to me. If anyone has any ideas that I have not considered, please help me out. I love this job quite a bit, but if it continues the way it has been, I will only be dragged down with it. Thank you in advance for your response, and I appreciate you taking the time to read my post.

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    You're in a tough position. Financially the best thing you can do is get away from this business, since it sounds like things will only get worse. If you're boss is in that much debt, it's quite possible the business isn't going to survive. However I understand that you want to keep doing the work you're doing and I assume after 7 years, you've developed something of a friendship with your boss and would like to see him end up on his feet.

    You might be able to take over the business, but keep in mind if you do, you also take over its debts. Probably not the best way to start a business. Does you boss want to get out from under the debt even if it means losing the business? Is it possible he could file for bankruptcy and you could buy the business that way. I'm not 100% sure how it would all work, but I would think that wipes away much if not all of the debt.

    Could you start a similar business? I realize this could mean competing with your boss, but it doesn't sound like he's doing well regardless and might lose the business with or without competition.

    As hard as it might be to hear, continuing as you are is probably a bad idea. If your boss can't pay you now, there's no reason to think he'll be able to tomorrow. If you continue to work for him assume you're doing it for free. You'd be working to help save the business and your boss with no guarantee of being compensated. One other idea is to ask for a % of the business for any salary he can't pay. Though again you'd be taking on the debt and become responsible for it. I don't think this is the best approach, but if you think this exact business is worth saving and is a better option than starting a similar one on your own, maybe it's a potential option.
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    Some debt is secured by assets. Employee pay is not, so in any bankruptcy filing, you'll come last when it comes to distributing the money from the company unless the court decides you are critical to the business being a continuing enterprise. But the government will come first, people who have liens against equipment will come second, suppliers who are unsecured as well will likely be in the same boat as you, so I wouldn't expect them to let you get caught up on your pay before everyone else.

    As for what to do? Sounds like you believe the business is going under, so your best bet is to start interviewing for a new job somewhere else and leave as soon as you find somewhere that will pay you for doing something you want to do.
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    Once an employer is unable to pay their employees, the business is done. So I'll make your decision a little easier, your leave will not change anything, the business is going to close whether you stay or not. At this point it is OK to start think what is best for you.

    I would not take over this business. Why start off a business in debt that is not your own. Also this business failed for a reason, don't bring those issues into your new business.
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    Quote Originally Posted by nealrm View Post
    Once an employer is unable to pay their employees, the business is done.
    I agree. That's it. It's over. I've been on a few sinking ships in the bar business and bounced payroll ( or no payroll) checks is the end. By sticking around all you are doing is building up a tab of money (and stress) owed to you that you will likely never see. So in essence you are working for free right this second...held there purely by emotion.

    I understand feeling a certain amount of loyalty after being somewhere 7 years, but as one of my old bosses used to say when we were working for a sinking ship, "You got to keep it moving".

    Unless your boss pulls the money from his personal accounts to pay you (which he would have done already if he was going to), you will NEVER see that money.

    I have been on a sinking ship where I recognized what was happening and made a deal with the boss to stay on to help wrap things up until the end and came up with an agreement that I would get paid every week out of the register (nightclub) no matter what.

    If you are the last guy there, maybe you can do something like that. But if there is no money coming in to make such a deal, then you have to get out.
    Last edited by Harold Mansfield; 08-05-2013 at 09:50 AM.

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    Run.

    He's obviously either not working enough to get the business going, or he is spending his money on something you aren't seeing. Which should be his business. If he was as loyal as you are to him, he would tell you, listen, I can't afford to pay you anymore (BEFORE HE EVEN GOT TO THAT POINT!), you will need to start looking for a job.Clearly he wasn't thinking of you when he got himself in this mess. A bit at a time? Tell him to sell his car. Sell his house etc. It's not your fault his business isn't working, why is he punishing you?

    I was in a similar situation and I quit. Got a job that paid me 2x more. Then after 2 years of that new job, business was clearly not making money so I said screw this and made my own business and now make 2 - 3 times more than the second company! Loyalty sometimes gets you nowhere. You need to learn that your time has come. You won't be moving forward in life at that place. Move on.
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    Wow! Thank you so much for the responses. I've considered the idea of taking on his debt, but I really see no reason to reward him for his inability to handle his own finances. The last time we had an investor, he quickly pulled away from the situation after seeing how business was handled.
    At this point, my best option would be to quit. I'm far too young to be dragged down with the ship.
    Once again, thank you all for the help, I really appreciate it.

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    Before you quit, stop by the unemployment office. Make sure that your quitting doesn't prevent you from getting your unemployment benefits.
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    You should also speak to an employment lawyer. There is an outside chance that you may be able to take over the company without assuming the current debt level. If the business earns a profit but is losing money due to owner mismanagement this may be an option for you to look into as well.
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    Quote Originally Posted by nealrm View Post
    Before you quit, stop by the unemployment office. Make sure that your quitting doesn't prevent you from getting your unemployment benefits.
    If he owes him back pay and isn't getting paid. Case closed. No one is expected to work for free. Technically he's already been laid off, he just keeps showing up.

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