The relationship between an employer and his or her employees isn't special. It's also very simple; It's based on money. The employee works for the employer typically for 1-2 weeks at a time. Following this time period, the employer pays the employee and they're even again. You're not friends.
From a management perspective, it is true that you should pay attention to the human element of your employees, this falls under the behavioral approach to management. More specifically, employees that receive attention from their supervisors are, in general, more productive. This is known has the
Hawthorne Effect. However,
this potential increase in productivity is moot if your employees aren't getting paid. Speaking from experience, here's what will happen if you're not paying your employees:
- Your employees will show up for work late with increasing frequency
- Some days, they might not come in at all
- They'll take long lunches
- They'll leave early
- They'll fuck off provided they actually do show up. Productivity will be down
And here's why: When I worked for a company that hadn't paid anyone in two months, everyone gained a sense of entitlement. "They owe us. They're lucky we're even showing up for work at all!"
I still agree with that statement, they were lucky we even showed up at all. But here's the problem: When you finally do pay your employees, you have to provide back pay, and you're paying them their normal rate/salary. Not the "fuck-off and waltz in at noon" rate.
Here's what's worse: If an unpaid employee decides to leave or you decide to fire or lay them off, you are opening yourself up for a
huge liability. In some states an employee is due their check the day that they leave (California, if given notice) or by the following payday (
Connecticut Labor Law.)
If you can't pay your employee, they have the option of reporting you to the Department of Labor. What happens then? You're forced to pay the employee and fined additional monies. For what amounted to ~$200 unpaid wages, another former employer of mine would have been liable for an additional $500-$1000 in fines. In addition to the monetary penalties, you also risk getting audited. As a bookkeeper friend once told me:
You never want to open your books for anybody. (Cool backstory, she had to open hers for a grand jury.)
If for some reason you really can't pay your employees on time, you're going to have to work something out with each of them on an individual basis. Make a
payment plan with each them that you actually manage. Most importantly,
GET YOUR AGREEMENT IN WRITING AND SIGNED BY BOTH PARTIES! Do not try to get the employee to waive amounts of their pay. In some states, this is illegal!
So, seriously, pay your employees or there may be serious consequences. If you can't, work out a payment plan and get it in writing and signed.
P.S. - I'm not a lawyer, I've just been on the receiving end (or lack thereof) of not getting paid a couple of times and know the mentality, as well as my rights.
