UPDATE 4: I'd be remiss if I didn't update this post with the outcome: I was able to recover about 1.5x lost wages (after employment attorney fees). The advice below I followed included: (1) finding an employment lawyer ASAP (2) Counting the bonus (rightly) as lost; (3) Collecting a few weeks of unemployment; (4) Searching for and landing a new job (at a higher salary, in fact) in less than 30 days after being let go. Thank you, Personal Finance & Money for the timely and helpful advice. You helped me navigate one of the most stressful situations of my life with advice that was logical and empathetic. I am forever grateful.

UPDATE 3: The firm is likely lying to us and going up declare bankruptcy on May 15 after moving money out of the country. Asked advice here: https://law.stackexchange.com/questions/40917/want-to-sue-my-former-employer-for-wage-theft-or-settle

UPDATE 2: Thank you all for the extremely helpful advice during a time of such duress. Everyone in NYC but the CEO has been let go. It seems upper management has already settled and signed their release agreements, possibly already getting back pay and even severance. It is looking very probable the NYC business unit will declare bankruptcy and walk away. I found out today the company was unable to pay rent for April 2019 so they must have known the company was in dire straits since at least April 1. Regular employees were not made aware until May 1. I'm personally considering filing a lawsuit for wage theft in hopes of discovering additional malfeasance. But really I'd be happy to get my April 2019 salary and end the whole charade. I contacted the NY Bureau of Labor and told them what is going on but I have not filled out the DS-221 yet. I'm looking for jobs (and have been for a while, accelerating that now) and sorting out COBRA and unemployment benefits. I'm also leaving NYC to move back in with family to avoid paying the NYC rent while unemployed. This is very much a legal question now, but I really appreciate all the advice received here.


I was just let go today, May 8. After being let go, 2-3 hours later I was asked to sign a general release. Obviously I declined. I told them I cannot sign a general release as I have a claim to unpaid wages.

Original Overview

My company, based in NYC, has not paid salary for the month of April 2019. There is no update for when salary will be paid out, but it looks like it might happen until shortly after May 20, 2019. I'm optimistic, but also skeptical about this. I'm also expecting a bonus payment for 2018 that has not been paid yet either. It is a long story, but apparently the funds are currently frozen in another country due to the firm being a 3rd party in an ongoing investigation that is coming to a close.

My fear is if I resign I will not get paid my salary or my bonus. The problem is I am going to begin to feel the pinch financially and will need to begin taking some drastic measures to pay my bills. What actions should I take here, from the following options?

  • Do nothing and wait.
  • Quit my job, seek new employment, and await payment of April 2019 and May 2019 salary (foregoing any bonus payment).
  • Get a second job ASAP (bussing tables or something).
  • Stop going to work until I am paid salary.
  • Seek a personal loan from friends or family.
  • Take out a personal loan from a lender of 5k USD to 10k USD.
  • Withdraw IRA funds with early-withdrawal penalty.
  • Take a hit on the credit card payments if I am unable to pay off the full amount.
  • Move back in with parents and get a job out of state.

Please let me know if you have any questions or other ideas.

UPDATE - Details are grim. I was counting on the bonus payment coming through during this period that my wife has been unable to work. As a result, we have already taken on a serious debt burden. Complicating matters is that we are somewhat settled in NYC with our son, but living on one income has been extremely challenging, and this might be the straw that breaks the camel's back.

Balance Sheet

  • IRA: $210,000
  • Current Personal Loan Debt: -$45,000
  • Checking Account: $8,500
  • Traditional Savings: $0.00 (already depleted)


  • Monthly expenses (including rent & loan repayment): -$8,500
  • Monthly Income After-Tax (if paid salary): $10,400
  • Monthly Income After-Tax (if not paid salary): $0.00

Upcoming expenses

  • Credit Card (due May 8): -$6,995
  • Rent payment (due June 1): -$3,225
  • 2
    If you can post your required monthly expenses, the length of time you reasonably expect to be without money (either until you get paid or get a new full time job), and how much you have in traditional savings (not investment nor retirement accounts) that would help the gurus here suggest a strategy
    – Freiheit
    Commented May 7, 2019 at 13:11
  • 13
    How much do you trust the "funds are frozen, it's an accident, and we'll have them soon" line from the company?
    – ceejayoz
    Commented May 7, 2019 at 13:11
  • 32
    Also consider posting over at law.stackexchange.com to see if you have any legal recourse against your current, non-paying employer. This site covers your financial question, Law.SE may help you with legal recourse.
    – Freiheit
    Commented May 7, 2019 at 13:12
  • 5
    Related question on the Workplace workplace.stackexchange.com/questions/43814/…
    – yoozer8
    Commented May 7, 2019 at 15:03
  • 3
    Are you an employee or contractor? You imply you are, but don't say it, the distinction is enormous. What date does your contract say salary should be paid? and does it define bonus payment date? (as opposed to 'award date'?) (@EdGriebel, IIUC, state Dept of Labor only works for employees, not contractors. If contractors get stiffed (which is pretty common), that's a civil legal matter, and is typically settled for pennies on the dollar, often <20%, depends on many factors, WANAL).
    – smci
    Commented May 8, 2019 at 3:47

8 Answers 8


If it was me, I would count the bonus lost. You need money to live, and they are not paying you so the answer is obvious: seek another job (or three). I'd have a chat with your manager about you stopping work and explaining that you are your family's sole source of income. How they react will dictate how you proceed.

If they get all upset with you, then leave, and find an employment lawyer ASAP.

If they are understanding then provide a date certain for the future payment. If you are still not paid by that date, then also find an employment lawyer.

If they are a decent company, they will rehire you and pay you the back pay plus bonus. However, you may not get a dime. These guys may be involved in illegal activity. You probably know how likely that is and it is probably best kept to yourself.

Borrowing further can turn this nightmare into a total disaster, you need to stop. Cashing out your retirement account is just borrowing at a very high interest rate. Get out there and earn money until you get this mess cleared up.

  • 1
    I'd add a recommendation to OP to ask his lawyer to declare the company bankrupt... that is the best chance of getting any payment - either due to them trying to settle his score or actually managing to bankrupt them while there still are assets available. But yeah, +1 to everything else.
    – Stian
    Commented May 8, 2019 at 7:43
  • 3
    @StianYttervik That's not how bankruptcy works. Bankruptcy is declared (or requested) by a debtor, and its effect is generally to reduce the amount owed to a creditor like the OP. Did you mean that the OP should sue to recover the unpaid wages?
    – Sneftel
    Commented May 8, 2019 at 15:26
  • 9
    @Sneftel Sorry, I was assuming the rules for bankruptcy was the same in the US. They could of course not be the same rules where I am (Europe). Here, any creditor can file a claim/order a company to liquidate in order to meet the creditors debt (if the debtor is not in accordance with payment terms). Salaries have high priority on the assets left - and it is because of that it is a viable way to force a company to pay your wages. (under threat of being forced to liquidate assets and shut down). A company can of course also declare bankrupt, to protect the viable parts of the company from liq
    – Stian
    Commented May 8, 2019 at 15:32
  • @Stian Yttervik: UK is in Europe, but it is not Europe. You talk like these laws (en.wikipedia.org/wiki/Liquidation#Compulsory_liquidation) are the same in all European countries, when - to the best of my knowledge - they're not .
    – phresnel
    Commented May 10, 2019 at 8:19
  • @phresnel no, I was referring to the EU. There is a tiny island off the coast, but it matters not much ;-)
    – Stian
    Commented May 10, 2019 at 12:18

Not paying your salary is a form is constructive dismissal. That is grounds for filing an unemployment claim — possibly the fastest way to get money for paying bills that doesn't put you into further debt. You can still sue to reclaim the wages owed to you, but that will take more time.

  • 7
    When filing the unemployment claim, give the last day for which wages have not been paid as the last day worked. But be prepared to repay the unemployment benefits if the wages are paid. Commented May 8, 2019 at 16:07
  • 9
    @MontyHarder: More specifically, I'm suspecting that you meant to write "give the last day for which wages HAVE been paid as the last day worked". Commented May 8, 2019 at 19:43
  • 2
    @HenningMakholm You are correct. I started to say something about the first day for which wages have not been paid, then realized it was cumbersome and changed it. Unfortunately, comments can't be improved the way answers can. Commented May 8, 2019 at 20:00

My fear is if I resign I will not get paid my salary or my bonus.

You will almost certainly get paid your salary up through the time you stop working. You might need to have a lawyer fetch it for you, but that salary is yours. They must pay it unless they prove something serious like you didn't come into work for that period. Before trying a lawyer, see if the state labor department will help you collect your pay. You already paid for those lawyers with your taxes, so you might as well get the benefit.

You also may be able to collect damages from not being paid. E.g. the interest on your credit card. Document the heck out of any costs caused by the failure to be paid on time.

You might be able to collect unemployment. You don't want to quit—they aren't paying you. That sounds like a layoff to me. That might solve your immediate problem. There's a set of circumstances where you technically quit but can still collect unemployment as if laid off. This may be one of them. Ask the unemployment people.

The bonus is trickier. If you have an explicit employment contract that spells out the bonus you are to receive, you may be able to collect that even if you quit. If not, then probably you won't be able to collect.

If it were me, the first thing that I'd check is if unemployment is possible. If it is, explain to your manager that you can't come into work until the salary starts again.

If you can't get unemployment, the next step is to look for a job that will at least pay the rent. You can blow off a credit card payment (although it will look bad on your credit). But failure to pay rent can get you evicted.

I would try calling the credit card company and making a deal. For example, they might be happy if you pay $200 this month and run up interest on the rest.

I would avoid loans other than what you already have. There's no evidence that any piece of the situation will improve with time. Pay the rent; buy food and utilities. Avoid optional costs. Make the minimum payments on any debt you already have.

If no unemployment and no quick hire job, then is when you should consider moving in with your parents. But give it a month. You seem to have enough in checking to buy basic expenses for that long. You might find a new job in that time. I mean a real job, not just bussing tables. Send out your CV immediately regardless of anything else in case something's there.

  • 37
    "You will almost certainly get paid your salary up through the time you stop working" Not if they declare bankruptcy. Commented May 7, 2019 at 16:49
  • 2
    ^^^Agreed^^^. If there money is frozen due to homeland security or something else then no paycheck.
    – Pete B.
    Commented May 7, 2019 at 16:53
  • 17
    That's why it's only almost certainly. But if they declare bankruptcy and he doesn't get paid, then he wasn't getting paid anyway. Beyond that, salary is relatively privileged in bankruptcy. He'd get paid before the unsecured creditors in that case. And if he moves fast enough, he might get paid before the bankruptcy. My point is that resigning doesn't change whether he gets paid.
    – Brythan
    Commented May 7, 2019 at 17:20
  • 1
    @Acccumulation: Employee salaries have the highest non-secured creditor priority - they will almost certainly get paid
    – Selkie
    Commented May 7, 2019 at 20:06
  • 7
    Being first in line of unsecured is like coming in 4th in the Olympics, you still get nothing. In 2001 I had a severance contract with a company that then went bankrupt. I got ~$2500 of $8k. Only because there's a law providing employees a little carve-out from secured assets. Everyone got that amount regardless of how much severance owed. I got lucky, some lost over 9 months of severance.
    – Ed Griebel
    Commented May 7, 2019 at 21:49

When you work for a company, there are a lot of expectations of you: prompt attendance, follow instructions, accept criticism, handle all the work stress, and all the things that go with good performance and a job well done.

In turn, the company has one obligation: to PAY YOU. On time, in full, every payday.

What you are describing is not a job. They are no longer your employer because they are not paying you. Yes, that's illegal, but it sounds like the company does not have the money to pay you and their excuses are just lip service.

You need to start looking for a new job now. Job search should now take up all your time. Your former employer still owes you the money, and you can take legal action or bring it up with the labor board, but it's time to start looking for work right away.

You should also contact the labor board and see if these circumstances allow you to file for unemployment benefits in the meantime.

  • Tthe company has one obligation: to PAY YOU. Not true. The company has a lot more obligations than that.
    – WBT
    Commented May 10, 2019 at 15:22

You should alert the NY State Department of Labor here. Failure to pay salary is unlawful.

I have to warn you, most people's experience is that they never get paid anything. In California, employee back wages are a preferred item in corporate bankruptcy. No idea about New York.

  • 1
    And that's assuming there even is a bankruptcy. When my former employer went under they simply closed their doors. None of us got the wages we were owed. Commented May 8, 2019 at 4:22
  • Great answer. They should also be able to advice if OP is eligible for unemployment benefits.
    – ventsyv
    Commented May 8, 2019 at 15:14
  • 1
    @LorenPechtel I had a KS employer shut down without paying my last check. Here the corporate officers are also jointly and severally liable for unpaid wages, so I was able to get payment after filing my claim and going to a hearing to show they couldn't get away with it. It did take months to resolve, though, so the suggestions to file for unemployment too are sound. Commented May 8, 2019 at 16:09
  • @MontyHarder Here I would have had to bring my own case with no assurance there was money to actually get. (Later I learned the owners managed to loot enough at the end to pay all the stuff they owed but I didn't know that at the time.) Commented May 8, 2019 at 18:24

Your question has generated a lot of discussion and advice about what to do regarding your employment and seeking to collect your salary. I can't add anything constructive there.

Here's what I would do with the $8.5k of cash that you have:

  1. Pay rent. You need to keep a stable place to live for your family. If you are on good terms with your landlord, you might approach him/her about trying to defer for a month or two, but I don't think it will matter much; you are either going to be paid fairly quickly or it will take a few months to work through the system. You might arrange some way to reduce your rent by helping out with maintenance or other chores.

  2. Budget a reasonable amount for food and household expenses for the next 2 months. No restaurant meals, no luxuries. Every dollar you spend reduces your cushion.

  3. Start looking for another job. My wife had a similar experience with an employer not making their payroll; it did not end well. If it's to the point that they can't pay their workers, your company is not healthy.

  4. If possible, stay current on your loan. If not, that's unfortunate, but all they can do is ask for more money later; they can't evict you. Pay the minimum required to keep your credit card current.


Hit the Panic button.

Ring up all your friends in your industry.

Try to find a replacement job, ASAP. Honestly, you should have done this the moment the company failed to pay your bonus due to financial difficulties (related to an investigation..)

Your Bonus ... and your back pay.. you can try to get them back in bankruptcy court ...

You are still employed... So it is easier to find a job while still employed...

But there is no need to tell the prospective employer about your financial difficulties.


I would not invade an IRA if I could avoid it. If you can't afford a month of no salary, then you will get caught hard by the tax and tax penalties next April.

If you expect to be back in work soon and aim to replace this money, then I suggest a manual IRA rollover. You withdraw some money from an IRA, then re-deposit it (roll it over) into a new IRA within 60 days - not 2 months! 60 days.

This can be done without penalty. However only one such manual rollover can be done per year. So take out enough to satisfy your needs, and then replace it using new earnings.

And then, develop a 6-month emergency fund and keep it.

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