No cash available for salaries

[Anjelita]

What is the name of your state (only U.S. law)? PA

Hi, I've worked for a church/daycare center for the past 5 years. They recently ran into finance issues because our state (PA) has not yet approved the state budget and all gov't funding is on hold. The majority of the money that makes up our payroll is from gov't money that the daycare receives from subsidized children.

So, there is no money for payroll, with an indefinite date of when there will be funds available. I was not laid off, as the church/daycare still needs it's employees, but I am not getting paid.

I suggested that they needed to lay us off because we obviously can not work for free. There have been many instances in the past where the church/school had funding problems, and we were asked to wait a determined time for pay (usually a week or so), which we agreed to. But no one has any idea when funds will be available, it could be months.

When I suggested they lay us off, all I got was rude responses. They suggested that if I didn't want to work there I could write a letter of resignation and leave. I expressed to them that I do not WANT to leave, but can not work without pay. Also, that I would not be resigning because then I would not be able to collect unemployment if I did.

Isn't it their responsibility to lay me off if they can't pay me? What can I do?

Thank you!

 

[cbg]

If you're working for a church or a church sponsored facility, chances are you wouldn't qualify for UI even if they did lay you off.

 

[commentator]

Call your department of labor, wage and hour division. Chances are that they will either have to pay you or lay you off due to lack of work. There are provisions made for "exempt" employers in the unemployment system. This means that they do not pay regular unemployment taxes, but will have to pay unemployment taxes if they do have to lay employees off. DO NOT quit, resign, write them a letter, whatever. Do insist that you will either be paid, or you will receive some sort of compensation.

Keep showing up for work until you miss your first appropriate paycheck. Then, in accord with what you have been told by your wage and hour people there in Pennsylvania, you may have to file for unemployment, stop going to work. In my state, employees were furloughed, did not work until the budget crisis was settled. Do not work for free.

 

[Zigner]

Let's look at this realistically:

OP stays and, when the budget problem is resolved, receives FULL back-pay for the time she hasn't been paid for.

Or -

OP can be laid off and (attempt) to collect a portion of her wages through the government. Then, when the budget problem is resolved, our OP will still be on UI, not earning full wages, and won't have a job.


It's the OP's choice I suppose...

 

[pattytx]

There are provisions made for "exempt" employers in the unemployment system. This means that they do not pay regular unemployment taxes, but will have to pay unemployment taxes if they do have to lay employees off.

Depends on whether 1) they are subject to the law at all and 2) if so, they are a reimbursable employer. If my recollection is right, it depends on what type of nonprofit this is. Generally speaking, church-affiliated organizations under 503(c) are not subject to the UI laws. But I admit I haven't researched PA specifically.

 

[commentator]

First, make a call to the unemployment office. They are still working in Pennsylvania! Ask specifically about your church operated day care.
A number of factors are involved here. Pennsylvania is sitting on some parts their state budget, so the money that is vouchered to parents to pay for their children's day care isn't coming through. So some of their children in the day care program aren't being paid for. But some are, the ones not getting the federal child care assistance. So by definition, their work load has slowed. Through no fault of the workers. This may take weeks and weeks to resolve.

This means that if they can't afford to pay the employees, though they still need to run the place, they have to lay the ones not getting paid off temporarily or cut their hours temporarily (allowing them to draw partial unemployment benefits) until the situation is resolved. THIS IS WHAT IS LEGAL. It is against the law for an employer to try to prohibit or keep their employees from signing up on unemployment. As far as receiving benefits, quitting your job for the wonderful work related reason that you are not being paid is pretty likely to be approved to draw benefits.

Otherwise, I guess the employees are just supposed to cowboy up and "Take money out of your 401K or your emergency fund!" as Suze is always advising us, which is a ha ha for most of the working folks in the world, and continue to work for these people for free???? With the assurance that you'll probably get back paid "someday" when we get our money in.

Unemployment insurance is for those who are out of work through no fault of their own. It is legally mandated that employers pay it if their employees qualify. Most church sponsored day cares and such are allowed to be exempt from paying regular unemployment taxes, but must pay in later if their employees file and are eligible.

Instead of promising back pay later, they need to be laying off their employees, and saving the money they eventually start making again for the unemployment premiums they'll have to pay as exempt employers. And they can actually lay their workers off temporarily and call them back to work as soon as the money for wages starts flowing again. That's how the system was designed to work.

This person needs to check with the unemployment office to see if this facility is a reimbursing employer who will be able to pay benefits. They likely are. Talking to the employer is futile, as they believe you should work for them for free as long as they need you to, with the promise they may pay you back sometime later. You are supposed to be helping them dodge their actual responsibility to either pay you regularly or give you unemployment benefits. At the time that their financial problems are over, they should be willing to recall their staff, as you would be perfectly willing to work for them again. A job that doesn't pay you isn't a job, as far as I can see.

 

[thedoctorisin]

Constructive dismissal - Wikipedia, the free encyclopedia

This lists "Failing to pay wages due" as grounds.

 

[pattytx]

Of course, Wikipedia is a legally sound source.

There is no way I would quit a job based on something I saw on Wiki.