Late salary payments – are you one of the bosses borrowing from your staff?

A staggering 20% of British employees have been paid late by their current employer

20% of British employees have been paid late by their current employer, with many suffering hardship because their pay has not reached their account on time, according to a new study from Cascade HR. Nearly half of these workers have experienced this more than once, effectively meaning that their boss is using them to provide short-term loan finance to the business – a new kind of crowdsourcing, perhaps?

The survey reports that the late payments caused problems for employees in buying food or paying for travel, with nearly two-thirds (61%) forced to borrow. One-third were unable to pay direct debits and bills, which in many cases led to financial penalties such as late payment charges. Needless to say, relationships with partners and relatives who were asked to advance money were also adversely affected.

The vast majority of these employees stated that they were annoyed or extremely annoyed at being paid late; however, 11% said they were not annoyed and 3% claimed not to feel affected either way. Really? That is 14% of employees who just shrug off not being paid on time!

If the irresponsible employers that are late payers find out who these employees are, they will be lining up to recruit them. Think of the improvement to cash flow. Someone should point out to these employers that the payment interval and date are usually in the contract of employment, which is a legally-binding document.

It is true, however, that even the best-run businesses can find themselves unable to pay employees. Some of the recent well-publicised breakdowns in banking systems have left employers unable to transfer salaries after running their payroll, despite the fact that the money is sitting in their business account ready to go.

In August 2015, an HSBC payment system failed and 275,000 people were not paid on the Friday before the August bank holiday weekend. Payments did not move from HSBC business accounts to the employee accounts, with HSBC’s Twitter feed full of responsible employers desperately asking when their staff would be paid.

This being the case, every business needs a contingency plan for this eventuality, which should be part of normal business continuity planning. It is notable that over half the staff in the Cascade HR survey were satisfied with how the company had dealt with the late payment situation and it may be that a large number of these people were aware that the employer was not at fault.

Sometimes, however, the late payments are affecting people on the lowest pay – those who are least able to stand up for themselves. A comment on an apprenticeship site from a mother whose son is an apprentice says that he constantly has to chase his employer for his wages and is often paid a week or more late.

Luckily this apprentice appears to have a mother who is more than ready to stand up for him; however, how many other young apprenticeship recruits are finding that their first introduction to the world of work involves hassle and exploitation?

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