A common situation that we see in the Employment Unit is as follows: Mr. C, a contractor, gets a job remodeling a house. Mr. C can’t do the job alone, so he brings four of his workers on site, paying each $10/hour. The remodeling job takes 8 weeks, with payments coming every 2 weeks. Unfortunately, because of a dispute with the homeowner, Mr. C doesn’t get paid for the last two weeks of work. Because Mr. C doesn’t get paid, he doesn’t pay his workers. His workers come in to CLS for help getting their pay.
Leaving aside how much the workers are owed (generally they are owed for a lot of unpaid overtime in addition to the last 2 weeks of work), we face a fundamental question here: why should the workers get paid when Mr. C didn’t? The first answer to that question is easy: the law says so. Under the Fair Labor Standards Act (FLSA), as well as the Pennsylvania Minimum Wage Act and the Pennsylvania Wage Payment and Collection Law (WPCL), employees must be paid for every hour that they worked. This is true whether Mr. C had a good week or a bad week. This is also true if Mr. C decided to fire all of his workers because he didn’t get paid—he still owes them for the time that they worked. Whether or not he owes them is not dependent on whether he was paid or not.
But I think there is another explanation here that doesn’t resort to the law. There is a fundamental difference between an employer and an employee. Mr. C is an entrepreneur—if business is booming and he can charge high prices for his work, he gets to keep the extra profit; if he can manage his time and workers effectively so as to come in under budget on projects, he gets to keep the extra profit. The workers, on the other hand, see none of this largess when times are good. If the business is flush and Mr. C is able to charge twice his normal rates, his workers will still make just $10/hour; if Mr. C’s workers finish a project ahead of schedule, they are only paid for the hours they worked. If that is true, then the converse must also be true. If times are bad or Mr. C doesn’t manage his projects well, he stands to lose money. His workers, however, still get paid for all of the hours that they work. And this makes sense—they shouldn’t be affected because of some dispute that Mr. C is having with the owner of the property, because Mr. C didn’t do a good job bidding the project, or because Mr. C didn’t hire enough people to do the job.
The workers, in other words, have traded the potential windfall of being an entrepreneur for the relative safety of a regular paycheck. If only Mr. C stands to gain when times are good, only he should stand to fail when times are bad—that is his choice. And let’s not feel too bad for Mr. C: he can go to court to recover what he is owed as well.
Posted by michaelrfroehlich 
