Partial wages/no wages and constructive termination North Carolina North Carolina

[Papadoc]

My wife has a part-time salaried position with a very small non-profit (no contract) which was set at 20 hrs per week, with more/less required time set against a running comp time. She probably has a couple hundred hours comp time built up that she will never get.

They have however, fallen on extremely rough times [nobody is fundraising], had one person quit, and just laid off their only other support person, thus making everyone else's job twice as hard. The director has reneged on the "hours required at 20" and now claims that everyone was hired to do a part time job, is being paid executive wages (salary works out to be about $17/hr), and whatever time it takes is what it takes, even if it's full time. I know he's under the gun and is even not taking salary right now, and I just saw April financials that say he can't pay bills, let alone salaries. So this is about inability, not willingness and a Wage/Labor complaint can't force compliance.

It was announced on Monday (payday), that paychecks wouldn't come out till Wednesday and they would only be partial, and that short of a major donation, there wouldn't be a next paycheck. Not paying bills and employees allows you to essentially keep the doors open indefinitely.

The question I have is how long must an employee go without a paycheck or partial paychecks before it would be considered constructive dismissal? Is she better off to continue to work at no or limited pay until someone/something else closes it down? Our goal isn't unemployment, but it is coming regardless. What we want to ensure is that she isn't seen as quitting at the first sign of a problem and thus ineligible to collect. And of course we cannot afford to go on for a month or two hoping things might turn around.

[Beth3]

I expect the agency closing down is going to happen quite soon. They simply can't keep the doors open with no operating capitol. There is rent to pay, utilities, and other basing operating expenses. Not paying the bills isn't a strategy that will work for more than a couple of months before services start to be shut off.

As soon as your wife receives a partial paycheck, I suggest she file for unemployment benefits. If she isn't paid at all on the following payday, then she files for that week as well. Following the first week of no pay, your wife ought to quit going to work and start putting all her time and efforts into finding a new job.

Yes, not being paid qualifies as a "constructive discharge." The State doesn't expect people to work for free.

[Pattymd]

I see several problems here, not the least of which is the lack of money to make payroll on time, let alone, not expecting to be able to pay anything next payroll.

IMHO if, as an employer, you don't expect to be able to pay me, I don't expect to be able to work for you. Does she get paid semi-monthly or monthly? Once Wednesday comes, and she doesn't get her final pay, she should file the wage and hour claim. She may not be able to collect, but it gets her on record that she has worked without receiving her full pay already.

Then I would call the Unemployment Commission and ask them that question.

The other thing I noticed here is that the employer seems to think that "salaried" automatically equals "nonexempt" and it does not. Even if the duties tests for exempt status WAS being met, the fact that she is not getting at least $455/week makes her automatically NONexempt. Although $340/week would be more than minimum wage at 40 hours per week, and there would not be a W&H violation for up to 40 hours worked, if she ever worked in excess of 40 hours, she would have been eligible for overtime. The salary minimum for salaried exempt employees cannot be pro-rated for a less-than-40-hour workweek. Since $340 for 40 hours would be MW, the "comp time" she's been granted does not have to be paid. There's an DOL opinion letter out there somewhere regarding this issue.

[Papadoc]

Thanks! If she's working and still getting a random partial payment, can she still file for unemployment? I wouldn't be surprised to have her get something, but not a lot. And if she does get something, does she continue to go into work, or does she quit? And if she quits due to only getting partial paychecks, can they get away with denying the claim?

This is just a strange situation to us and in 50 years, I've never come across something that won't quite die, but doesn't have a chance at living either.

It is almost unfortunate that there is some money coming in through random donations and an occasional one from a board member. It's at least enough to cover the very small rent ($400/mo as part of an agreement with the property owner that is another nonprofit), and that includes electric and internet. So unfortunately, they could probably float this one awhile.

[Papadoc]

Does she get paid semi-monthly or monthly? Once Wednesday comes, and she doesn't get her final pay, she should file the wage and hour claim. She may not be able to collect, but it gets her on record that she has worked without receiving her full pay already.

She gets paid on the 1st and 15th. I just talked with her again about these two answers and she also added that the director essentially told them that they'd get paid if there was anything left over, which there probably would be, but no guarantees or even guesses as to what that might be. According to the financials that were just released today, they are in the hole, and not just from salaries. That's considering some very inventive bookkeeping as far as I can see where they are including receivables such as gift cards they have on hand and anticipated sales tax refund from the state as "available cash".

[Pattymd]

Every state is different and NC is not my state, so I don't know what their rules are regarding constructive dismissal.

However, generally, partial unemployment benefits are payable only when HOURS are cut, not when wages are only partially paid.

She really does need to contact the unemployment commissions and ask these questions.

[DAW]

Time to start looking for a another job.