23 Aug What to do when your employer doesn’t pay
As an employee you have the right to be paid in accordance with the terms of your contract. Other than in very specific circumstances, the employer does not have the right to withhold your earnings, to deduct a portion of them or to delay payment.
Delayed or withheld payments are never welcome for anyone but nannies can find themselves in a particularly tricky position. Unless the job for which you are seeking payment is a one-off, your duties are likely to be ongoing. Stopping work may risk either the welfare of the children in your care or a good reference.
First step: telephone or email reminder
If you are in this position, as a first step, it is usually best to give the employer the benefit of the doubt. Late payments are often the result of inefficiency or forgetfulness. A quick email or telephone reminder may yield the desired result and preserve the employer-employee relationship.
However, if your email or telephone call does not yield the outstanding money or if you suspect your employer is having financial difficulties, you need to take further action. It is best to do this as soon as possible. The longer you delay, the less likely you are to be paid in full.
Second step: formal letter
The next step is to write a formal letter. This does not need to be complicated. A draft template is below. You will need to amend the sections in square brackets to reflect your particular situation.
Dear [Name of Employer],
As you know I am employed to [insert job title and brief role description]. I began the role on [date]. We agreed a salary of [amount] to be paid at a rate of [amount] every month / week. Additional payments were agreed for [insert details]. Pay day was agreed as [state date].
I have not received the salary to which I am contractually entitled.
[Detail any payments that have been made e.g. on 28th January 2017 I received £1,200 but was underpaid by a further £300. On 28th February 2017 I received no payment. This makes a total underpayment of £1,800.]
I have not been paid my salary for [state time period]. After the first missed payment, I [state how you attempted to resolve the situation e.g. by phoning or emailing. Include dates and names of anyone to whom you spoke].
As the matter has still not been resolved, I am raising a formal grievance. I am sure you can appreciate that the non-payment of my salary has put me in a difficult position because [explain why e.g. inability to pay rent/mortgage, utility bills etc]. As a consequence, I have also incurred financial loss [e.g. bank charges for going overdrawn of £XX].
To resolve this matter, I would like the outstanding amounts to be paid to me, in full, by [specify date].
Please reply to this letter within 14 days of [the date at the top of the letter]. In particular, if you do not agree that I am owed the outstanding sums, please reply to me in writing, setting out your reasons.
I very much hope it will not prove necessary but if you are unable to make the outstanding payments by the stipulated date I reserve the right to bring a claim [for unlawful deduction of wages in the Employment Tribunal / breach of contract through the county court].
Next steps: Employment Tribunal or Money Claim Online
If your letter does not yield the desired results, you will need to consider bringing a claim in the Employment Tribunal or the County Court. It is important to realise that this can be costly and you may well need legal advice. Note that claims in the Employment Tribunal are restricted to pay disputes. County Court claims for under £10,000 will be dealt with through the Small Claims Court. The cheapest and most efficient way of doing this is via Money Claim Online. There is a fee for using the service but fees for claiming online are cheaper than those for issuing a paper form. You can see the current rates here.
Dealing with a bankrupt employer
An employer who goes bankrupt puts you in a slightly different situation. You will become a creditor in a queue of other creditors. Unfortunately, HMRC and any financial institutions to which that client or employer owes money will take precedence. As an employee, your claim will rank higher than if you were a self-employed consultant or freelancer. However, you must still ensure that the bankruptcy administrator has your contact details and an account of your claim. It is also sensible to ask the administrator to provide you with a written acknowledgment of your claim.