|
Employee (person A) found a contract work for himself with a fortune
500 company (end-client), but he did not want the hassle of payroll
etc., so he asked company (sub contractor), I run, to do payroll for
some commission. The arrangement involved my company's Sub-contract
with end-client's vendor (a big staffing company, vendor). And Vendor
billed the end-client, under their direct contract. After one year,
there were problems with payment by Vendor to my company. Last year
they paid half of the past due amounts of $26,000 plus (that were
skipped for year 2001). What vendor started doing in 2001 was they
skipped payment of some of the invoices and then when they sent next
payments, they would show it as payment on current invoices.
As of December 31 2003, the work and arrangement stopped, because of
payment problems. Person A became employee of end-client.
Sub-contractor could not pay person A for last four months, because
vendor has stopped payment (currently more than 40,000 is owed) and
sub-contractor has no funds to pay out of its own pocket. Person A got
department of labor involved. When Dept. of labor contacted vendor,
vendor has sent payment and claimed that to be for October to December
2003 invoices, but nothing about dues of 2001 of about $13,000 plus.
On this check they have written it is full and final payment.
Right now knowing that Sub-contractor company will be forced into
Bankruptcy, labor dept. got involved and that helped get some money
from vendor. But it is unlikely that vendor will pay anymore. The
trick they have done is a) writing full and final payment on a check
b) while past due amount from 2001 is pending they have been claiming
all subsequent payments for current invoice. So they will now tell
labor Dept. that they have paid for all current dues and person A
claims that since they have paid for upto Dec. 2003, I must get paid.
None of them care that $13,000 plus from 2001 have not been paid to
sub-contractor, but sub-contractor has paid these to person A.
If Sub-contractor accepts payment, then it could loose right over
remaining $13,000 plus and labor dept could say, even if you don't get
paid you must pay person A in full. If they don't accept payment,
Labor Dept. could compel them to pay person A, anyway. What should
sub-contractor do. Person A's salary is over $100,000 per year, but
yet labor Dept., which is supposed to help low wage earning workers is
involved. Sub-contractor was getting only small commission like a
payroll processor and now it is in a situation, where it is being held
liable for $9,000 plus per month salary, while making up for more than
$13,000, which vendor refuses to pay.
What should Sub-contractor company do?
|
| |
| |
|
