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Comment by wavedynamics | Hacker News Reader

The article doesn't say, but I wonder if he ever got paid out for what he was owed after he walked away.

I once ran the tech side of a small startup where money was always tight and we were paying low wages in exchange for equity. But we always made sure to pay our employees first so they could eat and pay rent and keep working. One time one of our more expensive employees quit to take a better paying job. I'm ashamed to say it took us multiple months to finally pay him out his final paycheck - but once he left he was no longer the priority. I remember a few conversations with him where I stated that I was paying the office and server bills on my personal credit card and, no, I wouldn't take a cash advance to pay him his last 2 weeks in arrears. He did eventually get paid.

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For anyone listening, if you live in CA absolutely do not do this, especially if you are tight on money. Employee can take 30 days of pay + attorneys fees if they are not paid out within 72 hours of their last paycheck and it's quite easy to win a lawsuit given the facts here. Something like that probably would have killed your startup, assuming you were thin enough to be paying server bills on your credit card. The corporate veil also would not have shielded you in this situation.

Would killing the startup have gotten the employee paid? The threat would probably have gotten them a slow payment plan - but no attorney fees.

Yes, it would. A missed paycheck brings you to the front of the debtor line, ahead of any bank or equity holder, when the company liquidates. The startup's owners would have been personally liable for paying out the employee in such a case.

Massachusetts is similar.

Also, I might've misunderstood a lawyer, but it sounded like a business failing to make payroll would threaten its legal right to operate.

People should remember too that bankruptcy is always an option. Both for a business and an individual for that matter. That is, nobody in theory should want to stiff their employees, clients, contractors, etc. But the reality is that businesses run out of money all the time. The odds that a new venture will survive 5 years are not good. You try and get paid but it's normal that clients will go out of business or barely survive without paying (and little point going after them if there is no money. Since "Going after them" takes time and money.)

In bankrupcy not all debts are equal. And wages come first :)

In some places of the world this is an offence you can get sued for and end paying a lot more than the original sum.

Won’t you think of the small business owner? /sadge

people will generally do what is necessary to get by, which often includes committing various offenses. Life sucks.

It'd up for the judge then to rule if a mere inconvenience like a loan really constitutes a necessity, and to be honest I doubt it ever will.

>He was no longer the priority

Paying him was legally no less a priority than paying any other owed employee wage. Maybe it was indeed a major priority to him.

>and, no, I wouldn't take a cash advance to pay him his last 2 weeks in arrears. He did eventually get paid.

So al though there were options available to you that would have caused you some temporary economic pain, you did indeed decide to fuck him over for a long while anyhow.

If the options are to pay out immediately and risk shuttering the business, or delay, most people will probably delay.

It doesn't make it legally or morally right, but that's the way it goes.

> ...caused you some temporary economic pain

Not only them, but potentially all the other people who rely on the business.

Fortunately, he remained friends with the other guys on the team and continued playing on our company hockey team (hockey-tech startup), so even though he was mad at myself and the CEO, I don't think he wanted to sue us into submission. I think he understood the ~$2500 we owed him (2004) was double the salary of our other guys and potentially could have been the difference between company survival and lights out. He was wise to leave at the time, with a better job in hand. Our finances did get better and we did pay him + interest a few months later. It sucked (and like I said I am ashamed) but there are unfortunate ugly decisions you sometimes have to make at a startup for survival.

I never got paid! Sadly enough.

You’re probably lucky he didn’t speak to a lawyer, this could have been a very costly mistake in many many places. Sucks but also quite right too - you fucked him over.

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