My past employer has always had a problem managing their finances. When I first joined the company and started my office, they missed payroll 3 consecutive months. Then things got better, although, whenever the soft season came around, they would have problems making payroll again.

I left the company in August. I have heard from former co-workers that several offices have been shut down, staff has been reduced by 60% and things are not going well. No surprise, since they are really a nasty bunch to work for, and their ideas always failed. During my time there, nobody stayed more than 1.5 years. Now I read this on a business blog, written by the GM and founder of the company. I know it is him, since clicking on his id takes me to the company homepage.

Per his own words
"When times are tough, morale allows you to create ‘artificial credit’, by allowing flexible payment of staff. This flexibility, whether it be late payment, delayed bonuses or equity in return for salary, means that you can weather the storm, and bounce back"

What do MT'ers think of this! Is it right under the current conditions to let your staff work hard for you when you know you do not have the money to pay them as required in their employment contract.

amp2140's picture

sounds illegal to me

CarlCoach's picture

I also think that this is not legal.

edward's picture

Business owners try to keep their businesses afloat through many methods.  From your note it seems that he is hoping to bounce back using questionable payment methods.

If they know that they cannot pay the staff, then it is inexcuable to ask staff to work.

If they "hope" they can change the situation, then there is some case to involve the staff in the process to try to keep things going.  In this case the staff would be involved as part of the decision.  Just not paying, or delaying payments without consultation is extremely poor.  

The essential difference is between Hope and Planning. 

Poor planners hope.