No wages received: What to do if your employer doesn't pay on time?

This question depends on the individual case. Many employment contracts stipulate a certain date as the due date for remuneration. This due date can be in the current month or the following month. Those who receive their wages on the 1st or 15th of the current month are paid in advance. In most cases, however, wages are not paid until the 1st or 15th of the following month.

If no agreement on the due date has been made in the employment contract, the statutory provision of Section 614 BGB applies. According to this, the remuneration is to be paid retrospectively when the agreed periods, usually the calendar month, have expired.

If your employer does not pay your wages on time, this is a breach of contract. You then have various options for responding. However, you should always act with a sense of proportion and caution. After all, you usually want to keep your job in the long term.

You should therefore take the following actions in stages:

• Discussion with the employer
• Warning
• Threat of refusal to work
• Action for payment of remuneration
• Termination

In order to resolve the situation with as little agitation as possible, it is advisable to talk to your employer first. It is possible that the late payment or lack of payment is simply an oversight in the accounts department.

During this conversation, you can already explain to the employer that a late payment is a breach of duty on their part, which leads to a liability for damages. You should also make it clear that you are dependent on timely payment in order to meet your financial obligations.

After the interview, it may be useful to record the outcome with the employer in writing. Otherwise, you should make a note of the time, place and content of the meeting. It is quite possible that this will be needed again later, for example in the context of a labor court dispute.

As an employee, you can also give your employer a warning if they breach their obligations under the employment contract. You should issue such a warning in writing and have the employer confirm receipt.

The following contents must be included in the warning letter in order for it to be effective:

• The accusation of a specific breach of duty.
• Clarification of what needs to be done to fulfill the breached duty.
• A reference to the risk to the employment relationship in the event of recurrence.

If the discussion or warning has not resulted in the wages being paid, you may have the right to refuse to work. If the refusal to work is justified, there are no negative consequences. For example, the employer may not issue a dismissal or warning. The employee also does not lose their entitlement to payment.

However, this sharp sword is subject to a number of strict conditions and should only be used after consultation with a lawyer and should always be threatened in advance. The refusal to work must not be disproportionate. This would be the case, for example, if:

• There is only a short-term delay in the payment of remuneration.
• The outstanding salary is relatively low (less than 2 months' wages).
• The claim to the salary is secured.
• The employer would suffer a disproportionately large loss.
• It is a pure insolvency claim.

Another option for enforcing the wage claim is to file an action for payment of wages with the labor court. The judgment obtained there can then be used to enforce the wage claim against the employer by way of compulsory enforcement.

Be sure to discuss this step in advance with an experienced employment lawyer. We will be happy to advise you in detail on your individual case:

The last resort available to the unpaid employee is extraordinary termination without notice. However, this is subject to strict conditions.

The outstanding wages must be substantial, i.e. at least two or more full months' wages must still be outstanding. In addition, the employee must have previously issued a warning, which has been unsuccessful.

If your employer does not pay you the wages to which you are entitled, you should not wait too long to take action. Many employment contracts contain preclusive periods, which may mean that the claim to the outstanding wage payment can no longer be enforced.

It is therefore important to check the employment contract carefully for such exclusion periods and to observe them. These can be structured very differently. If collective agreements exist, these preclusion periods can also result from the collective agreements. As a rule, the existing claim must be asserted against the employer in writing or in text form within a certain period of time. However, some agreements may also stipulate that the claim for payment of wages expires after three months if no action for payment of wages is brought before the labor court.

In order not to take any risks here, it makes sense to seek the support of a lawyer experienced in employment law.

If your employer does not pay you the wages due to you, they are in default. This means that you can claim interest on arrears in addition to your wages. This usually amounts to 5 percentage points above the prime rate.

In addition, you can also claim damages if you have suffered a loss due to the non-payment of wages. This is usually the case if you have had to draw down the overdraft facility or another loan from the bank and have incurred interest and other costs.