When you put in the hours at work, it’s your right to be paid for them. It’s also reasonable to expect to be paid in full and on time. But what if your employer is late paying wages and your bills are going unpaid?
Our guide will help you understand your legal rights when your employer doesn’t pay you on time. We’ll also offer some tips to deal with the financial shortfall whilst the situation is resolved.
Being paid your wages on time is a fundamental right. You do the hours set out within your contract and then get paid for them. But is it illegal not to be paid on time?
If your wage payment date is stipulated in your contract of employment, being paid late is a breach of contract. The Employment Rights Act 1996, also states that withholding wages is unlawful. This is regardless of whether the late payment is a one off or it happens regularly.
This means that late payment of wages can be considered illegal in many situations.
The definition of wages goes beyond the agreed rate for your basic salary, or the amount of hours worked at your hourly rate.
However, many more types of compensation can fall under the wages umbrella. When any of these are withheld, it carries legal implications.
Payments that count as wages in UK employment law include:-
All wage entitlements and extras such as commission rates, should be clearly set out in the contract. Any monies owed to employees during their time with the company constituted wages. When any of these are withheld or paid late, it can be unlawful.
When an employee pursues a legal claim against their employer, the penalties can be severe. At the very least, late payment or withholding pay is a breach of employment contract. If unresolved, this becomes a matter for the court.
Compensation can be paid to employees who win such legal battles. They could receive as much as £25,000 for the financial loss and stress endured.
The first step when an employer doesn’t pay wages on time is to try to resolve the issue informally before escalating the issue by raising a formal grievance.
If this is not successful, you may wish to consider taking your employer to a tribunal.
Employers are legally obliged to pay employees on the date stipulated in the employment contract. If they fail to do so, they are in breach of the contract. Any delay in payment may be grounds for a claim of unlawful deduction of wages, but there’s not a set amount of time before they fall foul of the law.
Failure to receive wages on time can lead to a great deal of stress and worry. Employees have bills to pay and if there aren’t funds available, they may be charged by their bank.
That money feeds the family and takes care of all the other outgoings. When this money isn’t available, it leads to inconvenience and anxiety.
Being paid late is a stressful inconvenience and it can take some quick thinking to lessen the burden, and resolve things as quickly as possible.
Here’s some useful tips on what to do if you have not been paid on payday:-
Employers not paying wages on time is far from ideal. At the very least it is massively inconvenient but it can also cause a great deal of angst and misery. UK Laws are there to protect workers and help them resolve such issues.
Having to deal with non payment of wages as well as the rising cost of living can cause a lot of worry. It is important to make sure you are receiving everything you are entitled to, based on your circumstances.
You can contact Citizen’s Advice for help with applying for benefits and schemes. You can also use the online Benefits Calculator to establish what entitlements you can claim. Schemes such as cost of living payments can help those on a low income. In some cases, you can also have benefits paid in advance.
You will be feeling discontentment at the thought of working without being paid. This is completely understandable. However, if the problem is a recent one, you may wish to persevere in the interim.
Failing to show up for work will be a breach of contract, and one which could result in your contract being terminated. By continuing in employment, you can pursue the matter while still working.
Should you refuse to work, your employer may decide that they will dismiss you. This won’t solve anything and will complicate things.
Being realistic, not being paid is never a good sign unless it has been a genuine payroll error. Most cases of late payment point to a bigger problem within the company. It is natural to worry but you need to think in practical terms too.
Should the business have registered as insolvent, you may be able to reach out to the Redundancy Payment Service. You can also continue with a claim via the employment tribunal. Wages not being paid usually comes down to the company facing financial hardship.
It may be sensible to be looking for new employment at this point. This doesn’t mean giving up and saying goodbye to what you are owed. You can continue to fight the cause whilst actively seeking new opportunities. There are bills to pay and mouths to feed and, for many, being out of work just isn’t an option.
Employers cannot legally withhold their employees’ final pay. This money has been earned and should be paid on the usual payment date as per the contract. Final pay sometimes differs from other months. It is important to be aware of this when looking at your payslip.
There may be some lawful deductions such as paying back training if this is within the contract. However, employers cannot make any unlawful deductions and must pay all monies owed. This includes things like holiday or redundancy pay.
Should you be in a position of not being paid what is rightfully owed, you may wish to seek legal advice. Once you have left, it will have gone past the stage of raising a grievance informally. Instead, contact ACAS who will set out a plan of action. You may also wish to contact Citizens Advice for free legal guidance.
