For small businesses, the first thing that might come to their minds when they need to save money is not to pay their employees or at least delay their wages until you have the money to pay them with. This is the last thing you should actually do. This is your last line of defense. It’s the last thing you do before closing down your business. You cannot delay your employees’ salaries. It’s the same way you don’t want them to delay the services they render to you, or the same demands you make from your internet provider to never lag in the system.
If you don’t pay your employees on time, it will affect how they perform in their jobs. They will feel resentment every time you make a sale. They will think about how that sale should go to them instead of to your pockets. When they see you driving a new car, they will think about how you should sell your assets to pay their wages. And in some ways, they are correct. The last thing you want to do as a business owner is to make your employees hate you.
Why Is There a Delay?
Is it about the money? Or, are you having a hard time keeping up with the payroll? Is it a bank thing? Whatever the reason is, it is not enough for your employees to give you a pass. Maybe once is enough, but the second time should raise red flags.
If you are having a hard time with the payroll, you can hire an accountant or bookkeeper. You can also look for outsourced payroll services in your area. Many companies are offering this kind of service for businesses that cannot and do not like to hire an in-house accountant or payroll officer.
If it’s about money, then there is no reason for you to ask your employees this great sacrifice of not being paid on time. When your business comes to the point that it cannot anymore pay your employees’ wages, then there are three things you can do: do the work yourself, apply for another business loan, or close the business. Unless they offer their services for delayed payment, you shouldn’t demand that your employees sacrifice their finances for your business.
The Philosophy Behind Wages
Money is the basis of everything your employees do outside their homes. It is the driving force of why they want to work in the first place. Sure, some employees stay in jobs that don’t pay well, but they know this from the start. They are doing this for a purpose that’s beyond money. Maybe it is their passion. Perhaps it is a stepping stone for them.
When you don’t pay them right and on time, you are not only asking your employees to sacrifice for your business. You are also asking their families to make the sacrifice. Your employees might have grown a fondness for you and the company. It might be okay for them to wait a couple of days before they get their pay, but what about their families? Are they willing to watch their families make the same sacrifice for you?
So, is it any surprise that money makes employees more productive? They rely on stable paychecks. That’s the reason why they are working for your company. But if you are not paying them consistently and on time, you could lose some of your best talents. Paying them right and on time is telling them that you appreciate their valuable inputs to the company. In turn, they will be happier and more satisfied with their jobs.
The notion that companies can save money by not paying their employees on time is wrong. This is counterproductive to what you are trying to achieve, which is to save money. In case you don’t know, losing employees regularly and having to look and hire one again cost more than paying your current employees on time.
Why Delayed Wages Can Get You in Trouble
Under the law, employers must establish regular paydays and pay employees before or on that day. Those who do not pay their employees on time can face sanctions. The employees can file a lawsuit against employers who pay them late. Do you want to go through that whole process? A case can shut down your business operations. It will also ruin whatever good reputation you established for your company.
Not only is it mandated by the law to pay your employees on time, but it is also the right thing to do. It says a lot about you as a business owner how you treat your employees. So, pay them right and on time. Watch your business flourish under their care.