Is it illegal for my employer to issue payroll checks late?

UPDATED: Feb 13, 2012

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Is it illegal for my employer to issue payroll checks late?

My employer is issuing our payroll checks late due to “insufficient funds.” Depending on what time of the year it is we may get the make up check a week later or months later. Many employees feel there is embezzlement going on but our company deals with so much cash it would be almost impossible to prove. The employer will not borrow money to make payroll because he feels its a punishment to us.

Asked on February 13, 2012 under Employment Labor Law, Kentucky


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

No, it is not legal for an employer to issue paychecks late--it is a breach of contract (the contract or agreement by which employees work in exchange for pay) and often of state law, too.

As a practical matter, the key issue is whether or not you think the employer has the money and refuses to pay, or does not have the money.

If it simply does not have the money, then regardless of your legal rights, you can't force them to pay what they don't have (especially if the company is a corporation or LLC, which means that you could not sue the owner). In this case, while you should probably be looking for other work (since a company that can't make payroll probably will not last long), as a practical matter, you may not be able to do anthing to make them pay on time. You could, for example sue, and possibly win--but if the company is insolvent, you still won't be paid.

If you feel the company has the money and is refusing to pay, however, then you should take action to vindicate your rights. You could contact the state labor department to see if you could file a complaint; you should also speak with an attorney about suing. If you feel that embezzlement is going on, you should act quickly, before the money is gone--one possibility is to bring a lawsuit that also seeks "injunctive relief," such as in the form of a court order requiring the deposit of funds with the court or barring transfers of money out from the company, to ensure that funds will remain available. If a number of employees are affected, you could look to retain a lawyer and sue jointly.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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