I'm a manager of a small medical equipment company. Our home office is based in Arizona. I come to find out this morning, that the payroll company we use to issue checks have NOT cut any payroll checks for the last pay period. They could not give me any reason, other than to contact the owner

Now, my employees are refusing to work, which I can agree with, I don't want to either. (ive worked 14 days straight)

My question is what can the owner legally to do us if we refuse to work until they issue us a check?


Thanks for any advice/input

http://www.dir.ca.gov/dlse/FAQ_Paydays.htm here is a webpage that will help...I'm not sure if you are under California or Arizona jurisdiction. But here is what California says...

Wages earned between the 1st and 15th days, inclusive, of any calendar month must be paid no later than the 26th day of the month during which the labor was performed, and wages earned between the 16th and last day of the month must be paid by the 10th day of the following month.

It sounds like there was some sort of financial difficulty with either the payroll company or your company. The payroll company receives the money for the payroll just prior to cutting the checks. Without exception, they will not cut the checks without having the money in hand. So, the first step is to find out if it is a case where your company did not send the money. Call the owner, as directed, to find out.

Unfortunately, many of these payroll companies have run into financial difficulty over the past few years. I hope this isn't the case but if your company paid them the money and the payroll company kept it, it could be trouble. Though I'm sure that they must be bonded, it will take some time to recover it.

The chances are more likely that the payroll company went out of business before getting the money. If that is the case, the money is sitting in an account; your company's, I hope.

What should you do now?
First, as I mentioned earlier, contact the payroll company to determine where the breakdown occurred. If you can't reach them, assume that they are now out of business.
Second, don't forget to check on the status of any benefit programs, if you were participating in the payroll company's benefit programs.
Next, contact your bank to see if the money was transferred. If it was and the payroll company received it, talk to the bank about your options in getting the money refunded.
Plus, you should contact the state...many states regulate payroll companies for just this reason. (Often, payroll companies may be called a Professional Employer Organization, a PEO. PEOs handle payroll PLUS they offer benefits, etc., and the employees are actually employees of the payroll company, as opposed to your company.)
Next, keep in mind that your company is still liable to pay the employees within the required amount of time or you may face penalties from the state. You will need to talk with your bank or another financing source to determine your options to get the employees the money.
Next, you need to do a rough estimate of what you owe each employee, as well as the money you owe to the IRS, the state, Social Security, etc. If you can, you may want to overestimate a little.
Then, talk with your employees. Explain the issue. If the problem lies with the payroll company, rather than your company, I'm sure that they will understand (though they will still want their money). If the problem was caused by an administrative error by your company (such as not sending the payroll in time), apologize, letting the employees know that it was an administrative error, rather than intentional. Keep in mind that the employees are probably very concerned about your company's ability to keep them employed and to pay them. So, you may need to do a lot of reassurances. Explain what you are doing to get them paid. You'll also need to explain what you are going to do to make sure this type of thing doesn't happen in the future. Also, you'll want to let them know that you have calculated a rough estimate of the money due to them. Have them sign something that says that they understand that they may be overpaid with this estimate (or possibly underpaid) and that you will "square up" once you are able to arrange for a payroll service. Be sure to give an outside date that you are going to be able to accomplish that.
Next, contact the IRS, Social Security, the state unemployment fund, the benefits company (if applicable) and any other vendors/agencies who may be expecting money from your company. Explain the situation and ask them for options in paying them.

These steps should give you a start on fixing the situation. Good luck and let me know if you have any other questions.