Paying late wages is illegal and exposes the employer to sanctions

Paying late wages is illegal and exposes the employer to sanctions

“My employer rules me when he wants”; “I receive my salary some months on the 1st, other months on the 5th or the 10th”; “My boss just told me that he will pay me part of my salary at the end of the month and the rest in two times, the following month.”

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These situations are relatively frequent and create tensions between employees and employers.

They are not necessarily indicative of a bad will of the employer, but are most often related to cash flow difficulties.

Rather than resort to banking facilities or a loan (but the banks do not always respond favorably to such solicitations) or consider amicable settlement procedures with the commercial court (safeguard procedure for example), the The company will prefer to postpone the payment of the sums it owes to its suppliers, and also postpone the payment of the remuneration due to the employees.

In this case, the employer is exposed to a significant risk.

  • What are the rules applicable regarding the periodicity of payment of wages?

Article L3242-1 paragraph 3 of the Labor Code specifies, with regard to monthly employees:

Payment of the remuneration is made once a month. A deposit corresponding, for a fortnight, to half of the monthly remuneration, is paid to the employee who requests it.

These provisions do not apply to employees working from home, seasonal employees, intermittent employees and temporary employees.

– When employees receive the monthly payment, their salary must be paid at least once a month.

They are also entitled, if they request it, to benefit from a deposit, for a fortnight, corresponding to half of their monthly remuneration.

The monthly payment means that the compensation of the employees is monthly and independent, for a certain actual work schedule, of the number of days worked in the month. The monthly payment counteracts the consequences of the unequal distribution of days between the twelve months of the year ( Article L3242-1 paragraph 1 of the Labor Code ).

– When employees are not subject to the monthly payment, their salary must be paid at least twice a month, at most 16 days apart ( Article L3242-3 of the Labor Code ).

– As regards the commissions due to the VRP, they must be paid at least every three months ( Article L7313-7 of the Labor Code ). This is a maximum periodicity, the employer and the VRP may agree to a shorter periodicity.

  • Can the employer pay the wages due monthly at different intervals, for example one month on the 5th, the other month on the 15th?

This is not possible: the employer must respect the rules of periodicity of pay fixed by the labor code and can not vary the date of payment from one month to another, according to his will. For employees who benefit from the monthly payment, the employer must pay the salary at regular intervals; this interval can not be greater than one month.

For example, he may decide to pay wages every 10th of the month, but must respect the one-month interval and pay the wages the following month, also the 10th.

Similarly, it can not decide to postpone the payment of certain remuneration elements until the following month. This was judged by the Court of Cassation in a decision of October 19, 2016. The employer had deferred the following month the payment of various premiums related to a specific subjection (night, Sunday, holiday …) as well as the overtime payment. He maintained that the provisions of Article L. 3242-1 of the Labor Code only require a periodicity in the payment of wages and concern only the basic salary and that no provision of the Labor Code requires payment, in the month of their completion, other elements of the remuneration; he claimed that the latter can be paid with the salary of the following month when it results from the organization of the payroll department and the practice in force in the enterprise, explaining that he was compelled to do so for technical reasons and that the payment was simply out of step with the fulfillment.

The judges did not follow this reasoning, pointing out that Article L. 3242-1 of the Labor Code prohibits the postponement of the payment of wages beyond the monthly period and the employer’s decision to postpone the following month. the payment of certain elements of remuneration due on the date of payment of the salary was unlawful (Company Cass, October 19, 2016 No. 15-18162 ).

  • What is the risk of an employer who does not comply with the provisions of the Labor Code?

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It exposes itself first of all civil sanctions: 

The Labor Court seized by the employee may decide, on the basis of Article 1231-6 of the Civil Code , to order the employer to pay damages to the employee in compensation for the damage he has suffered ( for example if he had to pay agios to his bank, or if he could not meet his charges because of the non-payment of his salary);

An employee who is not paid regular wages, let alone if this is recurrent, is also entitled to invoke the employer’s non-compliance with its legal obligations, this fault being of a certain gravity.

In this case, the employee may take note of the termination of his employment contract to the exclusive fault of the employer with all the consequences that may result for the employer: conviction by the labor court to pay the employee of severance pay: notice, dismissal, as well as damages for the damage suffered by the employee as a result of the break attributable to the employer; in this case, the contract is broken as soon as the employee takes the break.

The employee may also apply to the prud’homal judge and ask him / her to terminate his / her employment contract at the expense of the employer (action for the legal termination of the contract); in this case, the contract is broken when the judge renders his decision and the compensation consequences are identical for the employer.

The employer is also liable to penal sanctions:

Failure to pay the salary at the end of the term, even if the delay is for a single pay, and even if the employer invokes exceptional circumstances, exposes the latter to the payment of the fine for the contraventions of the third class, ie 450 euros ( article R3246-1 of the Labor Code ).

  • Can the employer claim financial hardship to defer payment of wages?

No he can not. It has been held that ” financial difficulties can not justify the failure to pay wages and that it is up to the employer who can not, because of such difficulties, ensure the sustainability of the work and the settlement wages, either to dismiss the employee for this economic reason, or to declare himself in a state of cessation of payments “( Court of Cassation, Social Chamber 20 June 2006 No. 05-40662 ).

  • Can the employer request payment deadlines for the payment of wages?

Article 1343-5 of the Civil Code allows the judge, taking into account the situation of the debtor and in consideration of the needs of the creditor, to defer or to stagger, within the limit of two years, the payment of the sums due (paragraph 1 ), but the last paragraph of this article states that these provisions are not applicable to the maintenance debts.

The Court of Cassation thus specified that “in the case of wage claims, the judge can not grant any payment deadline ” ( Court of Cassation, Social Chamber, November 18, 1992 No. 91-40596). On the other hand, it may grant payment periods for indemnification claims, as the aforementioned decision points out.