What Happens When You Don’t Pay Employees: Part 2
In our previous article, we spoke on the legal aspects of not paying your employees. While they could get pretty severe there are still other consequences. In this article, we will look at the impact it has on employee morale, productivity, and turnover rate. All items that are vital to a company’s success.
Not Paying Employees On Time: Morale And Productivity
You find yourself in an interesting situation. You couldn’t pay your employees on Friday. Now on Monday they came in late and are hardly talking to you. Their work ethic has changed and customers are not having it. What can you do? You can’t blame them for their new approach to work. You get what you pay for and you didn’t pay them anything yet. At the same time, you need this work to get done and get done right. You could terminate their employment though that has a whole list of consequences. The most prominent is that if they file a wage claim they can say you terminated them over it. Something that is against the law to do. On the other end you can’t pay your old employees, can you pay new ones? Not to mention if they find out the last employee left over not getting paid on time.
So now you have a handful of unmotivated employees. Some of them might not have been that motivated to begin with. Let’s be honest for a moment. We don’t always give our heart and soul to a job. I worked in a grocery store stocking dog food every night. I gave it 100% of my effort but my heart was with my paycheck every week. Luckily now I have a career I do care about instead of a job to get me by. For those employees only working to survive, that paycheck determines their productivity.
It also determines what they say about their work. Social Media today means two things. It’s a wonderful way to connect with friends and a dangerous way to spread gossip. They post one complaint about not getting paid and tomorrow 100,000 people might have seen it. Your competitors dance with glee while your customers go to them instead. It might sound extreme but it wouldn’t be the first time it happened.
Let’s do a quick checklist of damages now.
- You could be facing a lawsuit from at least one employee.
- Your state employment agency might investigate your business.
- Your employee’s productivity has dropped
- Your reputation is damaged.
As we said in the last article, the most you can do is talk to your employees. Discuss the situation and when you will be able to compensate them. It is best to do this before the intended payday. Do what you can to make sure they get their next paycheck. Otherwise, the problem will only get worse.
To make sure you are staying on top of payroll consider outsourcing to Vision H.R. Our team of experts will keep your employees paid on time with organized records to prove it. We have had years of experience and success stories as an Ormond Beach Payroll Solutions Company.
Ormond Beach Payroll Solutions
