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'Employer' not paid up

Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
Hi, I'm writing on behalf of a friend. Basically, she's getting given the run around a bit, and I'm going to write a letter on her behalf tomorrow (not threatening, just outlining the situation clearly and expectations, as my friend doesn't like complaining). But before I start, I just want to be pre-armed with some useful titbits.

Basically, she's not been paid for July, August or September. She is employed as a contractor rather than an employee, so instead of getting paid with PAYE she invoices her work and in theory they bank transfer it to her.

In June they said they were having problems with the bank so couldn't pay her, so gave her the money in cash instead. But since then they kept putting her off until the start of September, when they said they had paid her. She queried this and they said it's come out their bank. She checked hers, they said there is nothing come in at all.

If it's the case they have paid but paid to the wrong bank account, who would be liable? Other 'employees' have mentioned that they sometimes have cashflow problems and are a month or so late in paying, but 2 months payments and saying they have been paid when my friend has no record of receiving this payment at all - no timesheets etc. The only thing she has is her invoice she sent to them.

What kind of laws surround this 'grey' area? My friend said she may have given them the wrong bank details back in June but these were definitely corrected, but I don't know where that lands her. But it's about £1000 owing so not something you can really forget about and put down to experience.


  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    It doesn't sounds like a grey area to me, it sounds like they are trying to pull a fast one, and potentially having money issues.

    As a contractor she should state that she won't be working any more until she recieves some pay.

    At the very least, they should provide proof of the payment having left. It would then be a matter for the banks.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    As Mist says, your first task is to get your friend's employer to provide proof of the payment having left their account (also with the sort code and account number of where it was sent to) for each payment. Possible scenarios are:

    1. They have sent the money to the correct account and there have been issues with the clearing bank your friend's end. (Seems highly unlikely from what you've mentioned about other employee's having difficulties and the fact this has been an issue for a few months now).

    2. They have sent the money to someone else's account. Slightly more complicated to sort out. You would need to find out which bank it's been sent to. If your friend has given incorrect bank details to the employer, but the employer has notified the bank accurately with these and the payment has been sent to the specified account, the bank isn't liable. There may be some way of getting the employer to reimburse, I'm not sure from a legal point of view what rights she would have in this situation...Maybe speak to CAB or her union if she has one.

    3. The sort code and account number the payment has been sent to doesn't exist and is invalid. In which case the funds would have bounced back into the employer's account, so they would need to resend using your friend's correct details.

    I know you've mentioned your friend doesn't like complaining, but if she could organise a time to meet with someone in her payroll to try to establish exactly what's happened by calling both her bank and their's, that's probably going to be the quickest way to begin to sort this.

    I do suspect as Mist says, the company may well be experiencing some financial difficulties, in which case CAB or her Union should be able to advise her on her rights. Is she the only contractor at her work? Have any other contractors been paid? Just thinking if anyone else is in the same boat, it may make it easier for her to take them along and talk to payroll, that way she would have some back up.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Also, to be frank, this is not something that your friend should have to be chasing. Regardless of what the "mistake" was, the fact is the money isn't in her account. The company need to sort it out, and she needs to be firm with them. They have effectively already broken their contract if she's not been paid according to her terms.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    The company is very small really, it's a family business and I think they effectively pay employees cash in hand, except by a bank transfer. I don't think they bother with NI / tax so it is dodgy in that regard. But maybe because they employed her as a contracter it's not the same?

    Thanks for the tips, they are useful - I think she just needs me help in giving her a bit of a push to say something - from what she's told me it seems like the management are more incompetent than malicious i.e. with not being able to work out things.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Sorted, it turns out they used the wrong details, but their bank bounced the payment back and she's now received in full what she's owed. Wonderful result! Even if it's tax free :confused:
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    She's a contractor, therefore self-employed and sorts her own tax returns out. :)
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    She's a contractor, therefore self-employed and sorts her own tax returns out. :)

    Well that's what I was thinking, although it's not too tricky because she is a student so wouldn't meet the minimum earnings threshold, I expect some NI would be due.

    Mind you, the thing that confused me was she went to this job like any other job interview, advertising a job, then started, and they gave her £6.50 an hour and petrol money, cash in hand. Once I told her to complain because she had worked 10 hours without a break standing up, so mentioned it to one of the seasoned employees who said they're hired as contractors so don't have the same employment rights.

    Maybe it's just because I don't have enough experience about these things, it just seemed very fishy to go to a job interview, get the job, get paid hourly like a normal job, but for them to say you're a 'contractor' and so don't have to pay NI and tax and the like.

    I would consider a contractor to be someone you hire in to do a specific job for example a building contractor to build a shed. It just seemed to me to be a bit like a tax dodge. Especially as there isnt either a written contract of employment or an agreement of the contracted services she's providing.

    I guess it doesn't matter since she's only got two weeks left now though!
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