Author Topic: Late and missing paychecks...should I be worried?  (Read 4254 times)

mousebandit

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Late and missing paychecks...should I be worried?
« on: December 22, 2017, 11:12:06 AM »
So, the husband switched employers this year, from one he's been with 14 years, to one we hadn't previously heard of.  In civil construction, so employers are often out of state (as this one is).  Although the employer must have upwards of a couple dozen employees, I was very surprised to receive a paper paycheck, sent through the mail, hand-signed by the CFO. 

In the 3-1/2 months he's been employed by them, the checks "usually" arrive on Saturdays, once on a Friday (which is what we were initially told would be the day they'd arrive), and frequently on a Monday.  Once or twice on a Tuesday.  Last week's paycheck never arrived, and they are re-issuing it. 

The old employer switched to dd like, well over a decade ago.  Even my HRBlock franchise job last tax season (with a whopping 10 employees) used dd.  I was a little worried about the new employer just based on the paper checks. 

Combined with the fluctuations in paydays (the checks are mailed out on different days, I'm watching the postmarks, so it's not USPS issues), should I be worried about their solvency?  In my previous life, I did accounting and was a CFO, and even in small businesses, I only ever saw variations in paydates when there were cash flow issues.  There's a couple of other little blips on my radar with the company that make me worry about financial decisions (bidding a multi-million contract when they don't have, for example, a proper crane or sufficient other heavy equipment to get it done, yet the owner has his own private plane, a little one, that he uses to fly key personnel back to the home state from out-of-state jobsites on weekends, etc.).  Husband keeps saying he thinks they're fine, but husband honestly, only has experience with the old employer and now this one.  And he was initially shocked by the lack of equipment, but since he's the superintendent he is figuring out other ways to do it, and is proud of that, so he doesn't want to talk much about it anymore.  Plus I think he's sick of hearing me express my doubts about them. 

Basically, I am afraid this is a little company, in over their heads on this job, and I'm worried.  It's within the realm of possibility that this paycheck got stolen out of our mailbox (husband had it coming to the house address, I've now corrected that to the PO Box), but we live so far out, that it seems very unlikely someone would drive this far to try and steal mail from maybe 10 mailboxes out here. 

What is your experience?  Employers still printing their own paychecks and hand-signing them?  Varying mailing dates for paychecks?  Am I being paranoid?

Greenback Reproduction Specialist

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Re: Late and missing paychecks...should I be worried?
« Reply #1 on: December 22, 2017, 11:26:35 AM »
Living far out, you could have someone stealing your mail.... Where we were living the post driver a few years back was arrested for stealing packages. So, it is a possibility.

My employer still writes checks, sometimes they are a day or two late. When someone doesn't have an automated system, and is super busy running a company, things get forgotten sometimes. This no excuse though, I would expect better.

I agree this could be just minor, but should you be concerned? Yea I would, because you never know if the person running things is good with money and trustworthy. Until you understand what is actually going on, I would be concerned.


Syonyk

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Re: Late and missing paychecks...should I be worried?
« Reply #2 on: December 22, 2017, 11:44:07 AM »
What is your experience?  Employers still printing their own paychecks and hand-signing them?  Varying mailing dates for paychecks?  Am I being paranoid?

The paychecks alone wouldn't worry me, but the rest of it does combine to indicate a company that's, perhaps, teetering on the edge.

I wouldn't worry about the private plane.  If it's a Cessna or Piper or something, 4 or 6 place, it doesn't cost that much to run and maintain.

But I think a good emergency fund would be very wise, and probably one on the larger side of things.

soccerluvof4

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Re: Late and missing paychecks...should I be worried?
« Reply #3 on: December 22, 2017, 11:57:46 AM »
I agree that the checks alone don't bother me either. As once an employer I always made sure that payroll understood the importance of getting people there paychecks as well as what is promised to vendors. There would be nothing wrong if you worried to ask if there is something they can do to remedy the problem that you have outflows scheduled off the inflow of your checks and see how they answer that.  In these times if there struggling then on any downturn there in big trouble. Things are soaring right now. How long have they been in business?

Bicycle_B

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Re: Late and missing paychecks...should I be worried?
« Reply #4 on: December 22, 2017, 03:29:54 PM »
I saw a small employer recently use hand signed checks.  It was more a sign of weak organization than insolvency, but one can lead to the other.  Based on the other indicators you describe, I agree that the business sounds risky.

Husband sounds like he wants to focus on the job and not criticism of the job.  I can see either pushing him to face reality or patiently waiting for him to admit the problems to himself as being legit supportive spouse strategies.  Do you have enough cash to survive a few weeks of disarray followed by a job search?  If so, you can let him learn the lesson at his own pace without undue harm.  Good luck to both of you regardless.

PS.  I worked once for an employer that bounced the paychecks 14 weeks running.  Will never forget the day that the Labor Board joined our payroll meeting.  Nor the day that the lead owner looked sick due to his buddy's sudden demise.  I believe the owners had got in trouble in their side business, which was rumored to be drug dealing.  Your husband would not be the first person to learn from the school of hard knocks.  Late checks are never good though.  May you at least harvest a couple of good stories from the adventure. 

abner

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Re: Late and missing paychecks...should I be worried?
« Reply #5 on: December 22, 2017, 05:38:39 PM »
I've worked in small manufacturing all of my life. (15-50 employees) I teach the trade now in community college. One of the things I preach to my students is that 1-2 late paychecks from cash flow is excusable. But 3 or more you need to start looking for the next company. I have experienced it too many times earlier in life.   Good Luck!

Reynolds531

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Re: Late and missing paychecks...should I be worried?
« Reply #6 on: December 22, 2017, 07:42:28 PM »
I recently took a job in construction, paper cheques and rented heavy equipment seem to be the norm.

How old are the machines they own? If they have newer trucks, caterpillar equipment, I wouldn't be worrying

Sibley

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Re: Late and missing paychecks...should I be worried?
« Reply #7 on: December 22, 2017, 08:07:05 PM »
Auditor here. What you're describing could indicate cash flow issues, or poor controls/processes. It can go either way. Plan for the worst, hope for the best. Up your emergency fund, prepare to cut budget if necessary, and hope you don't need to implement. Tell husband that you'll stop mentioning it, but you're upping the emergency fund for your peace of mind.

soccerluvof4

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Re: Late and missing paychecks...should I be worried?
« Reply #8 on: December 23, 2017, 02:58:51 AM »
Auditor here. What you're describing could indicate cash flow issues, or poor controls/processes. It can go either way. Plan for the worst, hope for the best. Up your emergency fund, prepare to cut budget if necessary, and hope you don't need to implement. Tell husband that you'll stop mentioning it, but you're upping the emergency fund for your peace of mind.


This is what i was getting at as well^+1 in my earlier post. Depending on what type of work the company is doing can really hurt there cash flows, so if there doing government work chances are there getting paid slower than normal. A good company knows how to balance things so their employees are not affected by this though.

teen persuasion

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Re: Late and missing paychecks...should I be worried?
« Reply #9 on: December 23, 2017, 09:56:37 AM »
I'd ask about direct deposit.  My tiny little employer was using all paper checks when I joined, but they had no problem adding DD for me when I asked.  Later additions to the staff all opted for DD, so that eventually only one old timer was getting a check.  We had some fun when a payroll packet from the CPA went missing in the mail, because of her lone check.  Had to cancel the check and reissue.  The missing payroll packet showed up ~ 3 weeks late!

Now that everyone is DD, things are much easier from a payroll standpoint, but glitches still happen every so often.  A few weeks ago, we were surprised to receive paper checks.  My employer was in the process of switching banks, and the CPA had apparently not gotten things set up thru the new bank on time, so checks were cut and mailed to us and had to be double signed by the Director and a Board member.  A bit clunky in execution, but things are running smoothly again now.

BlueMR2

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Re: Late and missing paychecks...should I be worried?
« Reply #10 on: December 23, 2017, 06:13:27 PM »
Auditor here. What you're describing could indicate cash flow issues, or poor controls/processes. It can go either way. Plan for the worst, hope for the best. Up your emergency fund, prepare to cut budget if necessary, and hope you don't need to implement. Tell husband that you'll stop mentioning it, but you're upping the emergency fund for your peace of mind.

This.  I've been in that position.  It wasn't a real big deal as I had an emergency fund, but sometimes the pay was a bit late...  (never more than a week as far as I can remember)  Company did eventually go under (which brought about another interesting problem/very long story, who do you get your W2 from when the company is gone and is no longer paying the accounting company who then refuses to release the paperwork?)

My wife is in the process of joining a company that (according to employee reviews on the intertubez) had that problem a couple years ago.  Something to be aware of as the risk is higher, but not anything that planning can't take into account...

cchrissyy

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Re: Late and missing paychecks...should I be worried?
« Reply #11 on: December 23, 2017, 09:17:02 PM »
"Auditor here. What you're describing could indicate cash flow issues, or poor controls/processes. It can go either way. Plan for the worst, hope for the best"

yeah, this. you're right to be concerned, since there are mored red flags here than can simply be explained by slow mail.

Imma

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Re: Late and missing paychecks...should I be worried?
« Reply #12 on: December 24, 2017, 02:31:41 PM »
I would be concerned. I work in finance and so far, irregular payments by my employer have always been a sign of some sort of internal problem. I'm lucky in the sense that it's my job to know what's going on, so I know if I have to be truly worried or not.

My current employer is paying irregularly and I know it's not a cash flow problem (because monitoring that is my job). However, there is still a big problem at the organisational level that I can't solve, so there is definitely something going on. A large amount of my pay is going into investments directly and most of my bills are paid automatically. I know now I need to keep some extra cash in my current account so my mortgage gets paid on the 1st of the month even if my salary hasn't been paid yet.

mousebandit

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Re: Late and missing paychecks...should I be worried?
« Reply #13 on: December 24, 2017, 06:05:38 PM »
Thanks, everyone.  Yes, increasing the emergency fund is the current step, regardless.  I talked again with husband, and he gave me more info that I didn't know that makes me feel mostly better, lol.  Basically, the company has been around longer than I thought, and is "in the loop" of regional civilconcrete companies, so that is reassuring.  Guys from his old company have worked for them, and do work for them, currently, I guess.  Sounds like they are on the cusp of breaking through from small jobs to big jobs, which of course can bring cash flow and organizational issues.  I have a little rapport now with both the bookkeeper and the cfo. So I am going to just straight out suggest and request direct deposit.  New year, new big job, try some new technology, lol. 

I feel better about the company and the paychecks, but I'm still going to roll a 12-month emergency fund because I think it's prudent for our family.

asosharp

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Re: Late and missing paychecks...should I be worried?
« Reply #14 on: January 01, 2018, 10:54:48 PM »
I'm surprised people still used cheques!

I used to work in a company (a well known personal growth company no less) which used cheques for its employees to hide from tax AND the government as they were employing people internationally and then telling them that they were sorting out their visas (they weren't). I didn't actually know this until the immigration police knocked on the door. I wasn't in that morning but all my colleagues told me about it after lunch. I was completely shocked.

In other words, it's probable that the company is a bit dodgy.

Otherwise you can ask for a direct deposit into your bank account if you think they're good but just old fashioned. If they disagree, it's probably time to move on.

Sibley

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Re: Late and missing paychecks...should I be worried?
« Reply #15 on: January 02, 2018, 08:12:15 AM »
I'm surprised people still used cheques!

I used to work in a company (a well known personal growth company no less) which used cheques for its employees to hide from tax AND the government as they were employing people internationally and then telling them that they were sorting out their visas (they weren't). I didn't actually know this until the immigration police knocked on the door. I wasn't in that morning but all my colleagues told me about it after lunch. I was completely shocked.

In other words, it's probable that the company is a bit dodgy.

Otherwise you can ask for a direct deposit into your bank account if you think they're good but just old fashioned. If they disagree, it's probably time to move on.

I think your experience is a bit limited. It's still quite common for small, unsophisticated companies to be behind the times in electronic banking, at least in the US. EFT/ACH payments are quite a bit more complicated than writing a check and a lot of smaller companies don't have the means or understanding to get it setup. Yeah, your company was using some of the limitations of checks to perpetrate fraud, but intentional fraud is quite a bit different than run of the mill incompetence and disorganization.

OP, given your update, I'd keep an eye on them. It's a much harder transition to go from small to big jobs than a lot of people think, and a lot of companies get into trouble at that stage. It's probably a great opportunity, but that brings much higher risk.

Cpa Cat

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Re: Late and missing paychecks...should I be worried?
« Reply #16 on: January 02, 2018, 08:41:31 AM »
I have a lot of payroll clients who insist on using paper checks, even though I provide free direct deposit as part of their payroll package.

It could be a cash flow issue, but it could also just be a matter of an inconvenient USPS drop off box or pick up time.

W-2s are due this month. When it comes, make sure it's correct, so that you can be sure the employer is reporting withheld taxes properly. If, by chance, there's an error where wages are under-reported on the W-2, then it's probably time to look for a new job.