My U.S. employer owes me $36,000 and refuses to pay

THE QUESTION

I work for a company in Pennsylvania, telecommuting from Northern Ontario.

My employer owes me $36,000 (U.S.) and won't pay. I have been pushed so far into the corner financially that I'm looking at bankruptcy.

He says he doesn't have to pay – that I am in another country and U.S. labour laws do not apply and he is outside the jurisdiction of Canadian labour laws.

The money he owes me would nicely cover my bills. Do I have any options?

THE FIRST ANSWER

Daniel Lublin

Partner at Whitten & Lublin, Toronto

The rule in law, just as it is in life, is that when someone who owes you money tells you that you cannot have it, it's likely poor advice.

You can sue the company in either Ontario or Pennsylvania. However, choosing where to pursue your claim is more of a matter of strategy than convenience.

Telecommuting is a fancy way of saying that you work remotely from home in Ontario. If you sue in Ontario, where you live, you can obtain an award against the company or possibly its directors in their personal capacity if the claim is for unpaid wages. But then you need to hire a lawyer in Pennsylvania to try to collect your money there, based on an Ontario court's judgment. These extra steps make it impractical and more costly.

You could also file a free claim with the Ontario Ministry of Labour. However, even though the ministry can take some steps on your behalf to try to collect a judgment, it can only award you a maximum of $10,000.

The best option is to hire a lawyer in Pennsylvania to take legal action there, because if you are successful, you have a much better shot of recovering your damages in a jurisdiction where a company operates and resides.

Unless you signed a contract that says otherwise, it is unlikely that U.S. or Pennsylvania labour laws would not apply to a claim for unpaid wages or breach of contract. In both the United States and Canada, the courts recognize that no one works for free.

THE SECOND ANSWER

Bill Howatt

Howatt HR Consulting, Kentville, N.S.

It is not clear from your letter whether you are a full-time or a contract employee. Regardless, there must have been some agreement in writing that defines the terms of work and can support your claim that you are owed $36,000. When starting a role, it is always advisable to be clear on the terms of the employee-employer contract.

The good news is you do not have to accept this employer's point of view. You have the right to get a legal opinion and, in fact, that would be prudent. But first, get your facts straight and your documentation in order.

An employment lawyer will be able to quickly determine what your options are. If you have a case and the lawyer understands your current financial hardship, they may take the case on a contingency-fee basis.

Without such leverage, this employer may not be motivated to pay you. An employment lawyer can inform you of your rights, whether you have a claim, the proper jurisdiction to make a claim, the likelihood your case would win and give you recommendations. In some cases, an employment lawyer writing a letter on your behalf may spark a resolution.

While you are waiting for advice, there's merit to drawing a line in the sand, if you haven't already done so. One option may be to quit your job; an employment lawyer can provide advice on the best strategy.

You may also want to explore other options to generate an income to help you through this financial crunch. There may not be a quick fix, so prepare yourself for the worst and make a plan to get on with your professional career.

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