Bad departmental funding, when do you leave the ship?

Question

As a post-doctoral researcher, I am employed directly by a university. Due to the economic crisis, funds are not overabundant right now, and a lot of expenses have been scaled back or even cut out completely in the last few months (library access, public hall lighting, building opening hours, research consumables, etc.). Now, it's already a week late on my monthly pay check (or more precisely, wire transfer), and we received a collective email from the departmental head. Quoting part of it:

Unfortunately it is not possible for us to pay as usual on today's date, the salaries because of liquidity in our bank account. I apologize for this inconvenience which we are trying to overcome as quickly as possible. Although we cannot precise the exact date when the issue is resolved we are hoping to make payments during the current month.

How do you analyse this email? My initial reaction is very, very negative: the first two duties of an employer, it seems to me, are to ensure workplace safety and pay salaries. So, when I read this email, my first instinct is to run away (I already hear JeffE saying “don't walk, run”).

However, it's a bad time to look for a new job, so: what are my options? Is this a breach of contract? Should I just wait, and how long? What do you read between the lines of this email, that perhaps I haven't?

Answer 1

Step 0: Document all your efforts to find a solution to this situation. Save a copy of that email from your chair. If you need to resort to Step 4: Hire a Lawyer, a paper trail is invaluable. Also, as @JeffE noted in the comments: stop working until you are paid. This is your most powerful negotiating tool. Don't worry about breach of contract; your employer did it first by failing to pay you.

Step 1: Meet with your immediate supervisor. As a postdoctoral researcher, some/most/all of your salary probably comes from grant accounts, and not the department's general payroll. If there is a financial problem in your department you should still get paid.

Unless, in order to pay you, money has to be transferred from the grant account to the payroll account. This is how it works at my institution. If the payroll account is wonky, then you cannot get paid, regardless of where the money comes from.

Step 2: Meet with your department chair, one-on-one. He/she may be more willing to be forthcoming with the details in a personal setting. There could a rational, if scary, explanation for what is going on. It may be outside of the chair's power. It could be that the department was expecting payments from grants that did not happen. It could be that an allocation from the institution or state or whatever has not arrived due to budgetary problems. If meeting with the department chair is not satisfactory, go on to step three.

Step 3: Contact your institution's central payroll or human resources office. Ask about the situation nicely and politely, but make it clear that you want to know what is going on and when you will be paid. As these folks are either 1) removed from the situation if it is department specific, or 2) closer to it if it is institution wide, you will likely get an answer. Indicate that you believe the department/institution to be in breach of your contract and that you are consulting legal counsel (even if you are not yet). Sometimes, that will grease the wheels.

Step 3.5: Sit tight for a little while and see if it does not go away. If your institution/department does not have a history of such shenanigans, this could be a one-time, but very annoying, blip. Also, look for another job. Be honest with your supervisor about why you are doing so - this financial snafu has you worried about the security of your contract.

Step 4: Hire a lawyer. By failing to pay you per an agreed upon schedule, your employer is in breach of your contract. I would only go this way if you are desperate. 1) The litigation route is likely to take away a large portion of your time that you should be spending doing research or looking for another job. 2) Depending on the ratio of legal fees to missed pay, you might lose money overall. 3) The heavy handed approach may alienate your department, robbing you of recommendations.

Answer 2

In addition to what Ben suggests, you'll probably want to find out some things. Many such legal aspects are country specific, but I'll put in some points about Germany which could give you an idea what to look for:

• Your post sounds as if the wages were usually paid mid of the month. Is that actually legally fixed? (In Germany, if nothing is specified in the contract, wages are due at the last day of the month.)

• Find out whether your social insurance fees were paid on time.

• Find out what general rights you have and equally important: what deadlines apply

• Find out whether your social insurance covers this case.
  E.g. in Germany, the unemployment insurance would be the ones to talk to as they cover at least some cases where no wages are paid though a contract still exists ("insolvency money")
  And make sure whatever actions you take that they do not cancel your rights there.

• Do you have the right to stop working (so you can use the time to look for a new job)?
  In Germany, if you stop working after the employer is too much back with the wages (> 2 months IIRC) you retain the right to receive wages (plus interest if the employer finally pays. If he goes into insolvency, this is still important as it affects the money you can get from the unemployment insurance). IIRC, you have to warn your employer in advance that you'll stop working if he doesn't pay.

• Do you have extraordinary rights to cancel the contract (so you can tell potential employers that you can start right away)? Again, find out if you need to warn your employer that you may use this right.

• Find out what is happening around you. How do other universities deal with payments? Is it the university or your funding agency who don't pay?

Here in Germany universities often have an extremely bad reputation for delaying payments (and have had that for years): Years ago (i.e. before anyone started to speak of any kind of European crisis), I started working at a German university, and it took them 2 1/2 months to wire the first money. It was quite less than a full month's wage and they even had the nerve to call it an advance payment... I also remember that at a certain point later they deceided to shift paying wages from mid to end of the month - IIRC there wasn't anything that could have been done against that (there may have been an extraordinary right to cancel the contract).

Now, you ask what we read between the lines. What I read between the lines is that this office is not nice to you staff. With "not nice" I do not mean that they are not wiring the money (assuming that it is not the accounting staff that defrauds you), but what they could tell you in this situation.

• The text is extremely vague about when/whether the payments will be forthcoming there is hope that they will pay, but I'd have appreciated in your situation if they were hoping to pay full wages by the end of the month.

• Of course they cannot write "run and get yourself a new job", but they could have explained whether you are insured in some way, what you need to do in order to get that insurance, what else you could do, etc.

• In short, I'm missing somethins that shows that this employer is still trutworthy.

• On the other hand, the accounting staff is probably under extreme stress already for a while, so this may explain why they don't manage to be nice.
  When you talk to them, try to let them know that you understand this and know that right everyone is putting pressure at them, and they didn't get their wages, neither. In short: try to be nice to them - being nice doesn't cost any money, and having a good standing there may actually help.

Answer 3

In the comments I suggested Walk, don't run as opposed to Run, don't walk. Obviously, at some point you will need to get a job that actually pays you, hence you need to be looking in case things go even further awry. If however, during the next pay period you get paid everything you are owed, I would just let the "one time" screw up slide. A university level screw up doesn't really tell you anything about what your advisor thinks about you. I would talk to your advisor to make sure he/she thinks everything will be fine going forward. If you continue to not get paid, or are forced to take a pay cut, you need to decide if what you have is better than what is out there. As a post doc I would have rather had a few months of unemployment, or unpaid research time, than taking the first available job. You want to make sure you land in a good job, so don't go running off.