Legal Question in Employment Law in California

Re: My former employer owes me money

Not sure why personal income tax consequences would result from their payment of your moving expenses since moving expenses are usually tax-deductible. Perhaps some non-deductible items were involved, but we'll leave that one alone since it's not what you're asking. The problem sounds like there was no express agreement as to how rapidly they would reimburse you. Where there is no express time term in a contract, the law implies a reasonable time. Your unilaterally invoicing of them with a 60-day time term was not their agreement. I think 60 days is reasonable, but they would probably contend that 5 months is, too. I like your position better, but what is the practical alternative here? Sue your new employer? Fairness dictates that if they want to take that long, they should pay you reasonable interest, otherwise they are unfairly enriched. And, since you are president, I'm a little confused why you can't approve your own terms. But, generally speaking, suing your employer, especially early in the relationship, is a bad idea.

Wayne W. Wisong, Attorney at Law

Admitted to California Bar: December, 1979

Admitted to Georgia Bar, December 1990

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Re: My former employer owes me money

Generally, an employer is required to pay wages due at the time an employee terminates. The employer can pay other amounts, such as commissions, bonuses and expenses, at the time the employer would normally pay them, i.e., when expenses are processed.

Here, the reimbursement for the income tax liability is a contractual (non-wage) agreement between you and the employer. If no time frame was specified in the original agreement, the parties must comply with their respective duties within a reasonable time. Although frustrating to you, the employer is complying . . . slowly.

Theoretically you could sue for reimbursement, but the payments would likely be completed long before the matter reached decision, and you'd be out attorney fees. Even if you prevailed, the interest would be negligible. If the employer doesn't pay, however, you may take your situation to the Division of Labor Standards Enforcement (DLSE, a.k.a. Labor Commissioner) for assistance.