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Technical question to UK-based hackers... OP says: "...it wasn't quite the amount of money I was owed for unpaid overtime, but it was something." Can you as an

by kahawe 15y ago

Technical question to UK-based hackers... OP says: "...it wasn't quite the amount of money I was owed for unpaid overtime, but it was something." Can you as an employee in UK lose pay like that when your employer goes bankrupt? Aren't there any government funds or organizations stepping in? Because strangely it seems this is the case in Germany, though in Austria I was victim to my employer's bankruptcy and I got paid for every single hour of clocked over-time by a government-owned fund which protects employees. Also, the government steps in and handles the whole thing; the original CEO won't have anything to say anymore after they declared bankruptcy.

bsenftner 15y ago
Wow. Here in the US, the idea of the government handling bankruptcy to the benefit of the employees who lost wages is so completely foreign... I gotta stop thinking about it. That is simply impossible in the United Corporations of America.
- gbhn 15y ago
  My understanding is that wages owed is senior to any other corporate debt. Is this not true?
  - bsenftner 15y ago
    No true. Bankruptcy law in the US is all about helping the company get back on its feet. There's some useful information here, but the page takes forever to load: http://smallbusiness.chron.com/employee-rights-company-bankruptcy-2670.html http://smallbusiness.chron.com/employee-rights-company-bankr...
- kahawe 15y ago
  Here it works like this (in my own layman terms): once you file for bankruptcy you'll have someone assigned to handle your company's business and this person's duty is to find out whether the company is just suffering from temporary cash flow problems and business could potentially continue or if it is all hopeless. In the former case, an agreement with all creditors will be reached to write off x% so that the company can continue eventually - in the latter case, all money that can be squeezed out of the company will go to said creditors but of course they would still lose potentially most of their money but they can then write it off on taxes and it is considered a normal business risk. Also there are certain rankings and priorities for this distribution of what was left - social insurance and health care rank highest, they are also the ones that will HAVE you shut down first if you are late on payments, they will literally write to your customers(!!!) and tell them to send any payments to the insurances instead of to your company because you haven't paid your dues. This is also when your customers will freak out that you will go bankrupt and will very likely stop paying anything until they are being forced to in the bankruptcy process. So as a company just scraping by and hoping to make it SOMEHOW, at that moment you are frakked because you won't have a single euro coming in and anything that would come in will instantly go to social insurance and health care. No more cash flow and if you do not declare bankruptcy right then and there, you as the CEO can get into serious legal trouble. Next in the ranking then come the other creditors with certain priorities and also employees but they are pretty much last so most of the time, they won't be getting all of their owed salaries out of the bankruptcy assets; and that's where the federal employment office and a government run fund will step up and pay you. Oh and you won't be losing your health care either, it will all be taken care of and until you find a new job you will receive unemployment money (let's say 80% or so of your former salary). I had to go through the whole process after working a few years in a sweet startup and it really, really broke my heart to not be working with those guys anymore but it was also an extremely valuable lesson in "politics", learning to read management-speak in a situation like that and knowing which possibilities you as an employee have. And I was also very thankful for all the social security available to me as a citizen - I pay my taxes a lot happier now.
aardvark179 15y ago
I think you are misunderstanding the phrase unpaid overtime in this context. Most jobs are salaried, not paid by an hourly rate, and small amounts of overtime required to get the job done do not get you extra money, but you cannot be forced to work more than 48 hours per week unless you specifically sign away your rights under the European working time directive. As for insolvency law, if the a company goes under and has insufficient funds to cover outstanding wages then employees are entitled to up to £400 per week of outstanding pay, plus statutory redundancy rights (based on age and period of employment). When a UK company enters administration then the appointed administrator replaces the directors.
- rescripting 15y ago
  Here is a question that probably betrays my naivety, but why can I even sign away my rights like that? What is to stop an employer from saying "We'll hire you, but only if you sign this, and if you don't we'll just find someone else." At that point, is it really a right? Or just a privilege afforded to those who aren't forced to sign it away?
  - kahawe 15y ago
    Depending on industry and country, unions are by-and-large very strong here in the EU, especially in Germany, and I wouldn't be surprised if they would very quickly put their foot down once such a practice becomes known.
  - teamonkey 15y ago
    The ability to opt out was very strongly backed by the UK government. I don't know if any other EU countries do it. Although many companies ask you to opt out, they must not force you to do so. In addition an employee can opt in again with a certain amount of notice.
hythloday 15y ago
Employees in the UK have a portion of their wages/backpay protected from an employer going bankrupt[0]: redundancy pay, 8 weeks wages, 6 weeks pay in lieu of holiday, and up to 12 weeks for long service, at a maximum of £400 a week, minus tax. In addition, directors of a company which continues to trade once it becomes insolvent become personally, unlimitedly liable for the debt incurred while continuing to trade[1]. [0] http://www.direct.gov.uk/en/Employment/Employees/Pay/DG_10026695 http://www.direct.gov.uk/en/Employment/Employees/Pay/DG_1002... [1] http://en.wikipedia.org/wiki/Trading_while_insolvent http://en.wikipedia.org/wiki/Trading_while_insolvent
jheriko 15y ago
just to clarify they do not owe me any money for wages that were promised. i had asked them for a sum to cover unpaid overtime and what they paid me was less but i took it to be a compromise.

by kahawe 15y ago

bsenftner 15y ago

Wow. Here in the US, the idea of the government handling bankruptcy to the benefit of the employees who lost wages is so completely foreign... I gotta stop thinking about it. That is simply impossible in the United Corporations of America.

gbhn 15y ago
My understanding is that wages owed is senior to any other corporate debt. Is this not true?
- bsenftner 15y ago
  No true. Bankruptcy law in the US is all about helping the company get back on its feet. There's some useful information here, but the page takes forever to load: http://smallbusiness.chron.com/employee-rights-company-bankruptcy-2670.html http://smallbusiness.chron.com/employee-rights-company-bankr...
kahawe 15y ago
Here it works like this (in my own layman terms): once you file for bankruptcy you'll have someone assigned to handle your company's business and this person's duty is to find out whether the company is just suffering from temporary cash flow problems and business could potentially continue or if it is all hopeless. In the former case, an agreement with all creditors will be reached to write off x% so that the company can continue eventually - in the latter case, all money that can be squeezed out of the company will go to said creditors but of course they would still lose potentially most of their money but they can then write it off on taxes and it is considered a normal business risk. Also there are certain rankings and priorities for this distribution of what was left - social insurance and health care rank highest, they are also the ones that will HAVE you shut down first if you are late on payments, they will literally write to your customers(!!!) and tell them to send any payments to the insurances instead of to your company because you haven't paid your dues. This is also when your customers will freak out that you will go bankrupt and will very likely stop paying anything until they are being forced to in the bankruptcy process. So as a company just scraping by and hoping to make it SOMEHOW, at that moment you are frakked because you won't have a single euro coming in and anything that would come in will instantly go to social insurance and health care. No more cash flow and if you do not declare bankruptcy right then and there, you as the CEO can get into serious legal trouble. Next in the ranking then come the other creditors with certain priorities and also employees but they are pretty much last so most of the time, they won't be getting all of their owed salaries out of the bankruptcy assets; and that's where the federal employment office and a government run fund will step up and pay you. Oh and you won't be losing your health care either, it will all be taken care of and until you find a new job you will receive unemployment money (let's say 80% or so of your former salary). I had to go through the whole process after working a few years in a sweet startup and it really, really broke my heart to not be working with those guys anymore but it was also an extremely valuable lesson in "politics", learning to read management-speak in a situation like that and knowing which possibilities you as an employee have. And I was also very thankful for all the social security available to me as a citizen - I pay my taxes a lot happier now.

aardvark179 15y ago

I think you are misunderstanding the phrase unpaid overtime in this context. Most jobs are salaried, not paid by an hourly rate, and small amounts of overtime required to get the job done do not get you extra money, but you cannot be forced to work more than 48 hours per week unless you specifically sign away your rights under the European working time directive. As for insolvency law, if the a company goes under and has insufficient funds to cover outstanding wages then employees are entitled to up to £400 per week of outstanding pay, plus statutory redundancy rights (based on age and period of employment). When a UK company enters administration then the appointed administrator replaces the directors.

rescripting 15y ago
Here is a question that probably betrays my naivety, but why can I even sign away my rights like that? What is to stop an employer from saying "We'll hire you, but only if you sign this, and if you don't we'll just find someone else." At that point, is it really a right? Or just a privilege afforded to those who aren't forced to sign it away?
- kahawe 15y ago
  Depending on industry and country, unions are by-and-large very strong here in the EU, especially in Germany, and I wouldn't be surprised if they would very quickly put their foot down once such a practice becomes known.
- teamonkey 15y ago
  The ability to opt out was very strongly backed by the UK government. I don't know if any other EU countries do it. Although many companies ask you to opt out, they must not force you to do so. In addition an employee can opt in again with a certain amount of notice.

hythloday 15y ago

Employees in the UK have a portion of their wages/backpay protected from an employer going bankrupt[0]: redundancy pay, 8 weeks wages, 6 weeks pay in lieu of holiday, and up to 12 weeks for long service, at a maximum of £400 a week, minus tax. In addition, directors of a company which continues to trade once it becomes insolvent become personally, unlimitedly liable for the debt incurred while continuing to trade[1]. [0] http://www.direct.gov.uk/en/Employment/Employees/Pay/DG_10026695 http://www.direct.gov.uk/en/Employment/Employees/Pay/DG_1002... [1] http://en.wikipedia.org/wiki/Trading_while_insolvent http://en.wikipedia.org/wiki/Trading_while_insolvent

jheriko 15y ago

just to clarify they do not owe me any money for wages that were promised. i had asked them for a sum to cover unpaid overtime and what they paid me was less but i took it to be a compromise.