What to do if the company delays payment of salary?

What happens and what to do if the company delays payment of my salary?  

If the employer is late in paying your salary, the Labor Authority (ACT) explains what happens and what you can do.

If the delay happens due to the employer's fault, the employer will have to pay the worker the corresponding default interest - the legal rate or higher established in a collective bargaining agreement or by agreement of the parties.

If there is no agreement, it is up to the court to make a decision regarding this scenario.

As an employee, if you find yourself in this situation, you can suspend your employment contract, temporarily stopping work, or terminate the contract with just cause.  

In addition, ACT also stresses that if there are overdue payments for a period exceeding 15 days, you can request in court: 

• "The suspension of enforcement proceedings being conducted against you";  

• The suspension of the judicial or extrajudicial sale of your seized or pledged property, provided that such property corresponds to a property that is the worker's permanent residence or is essential to the household economy.

• "The suspension of the execution of the eviction judgment, based on non-payment of rent."  

Note that, in order to do so, you must prove that your non-compliance is a result of having delayed salary payments.  

And you may also be entitled to unemployment benefits if the delayed salary results from a situation of suspension of the employment contract due to the employer, closure of the company or establishment for 15 days or more. 

Is there any subsidy to guarantee overdue salaries?

Yes, according to ACT, the Social Security has a Salary Guarantee Fund that pays the amounts arising from the employment contract, its violation or termination, but only if it is ruled:

• "Employer's insolvency declaration sentence";  

• "Judge's order appointing the temporary judicial administrator, in case of special revitalization process (PER)"  

• "A dispatch accepting the request issued by IAPMEI - Agency for Competitiveness and Innovation, within the extrajudicial procedure for business recovery."

To access the payment of the Salary Guarantee Fund, you must apply to Social Security through the GS1-DGSS Model.

"The model must be certified by the insolvency administrator, the provisional judicial administrator, the employer, or, in case of refusal or impossibility of these, by ACT, upon the worker's request (Declaration of credits arising from the employment contract - Salary Guarantee)", ACT explains on its website.

It is worth mentioning that this fund only guarantees the payment of credits when requested within one year from the day following the termination of the employment contract.

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