You’ve had an employee get angry at you for giving someone else their paycheck before them

You might be an entrepreneur if…you’ve had an employee get angry at you for giving someone else their paycheck before them.

This is a tough one. There are some things I’ve done as an employer wherein if my employees were to get angry or frustrated I could hardly blame them, and yet there’s not much I can do about the situation and I share in their frustration at times, although I’ve been through the ups and downs long enough to get used to them.

Is it just me, or do a lot of these “you might be an entrepreneur if…” postings somehow tie into making payroll?

Here’s how the situation works. Let’s say your payroll is $20K, and you’ve got $10K on hand. Do you wait until you have $20K to pay anyone, or do you pay out the $10K now and the other $10K once you get it?

It’s easy to say “Just pay everyone late, at least that way it’s fair and nobody will get mad at you for not being one of the first people to get paid.” But to complicate the situation, let’s say that one of your employees comes to and says “If I don’t get paid on time, I’m going to miss my mortgage payment, my wife is going to kill me, and assuming I survive the altercation with my wife she’s going to be nagging me to find a new job.” Do you still wait for the entire $20K to pay anyone?

I’ve always opted for paying employees as I could, and working with those who don’t come first. My experience is that employees are generally understanding if you explain the situation and solicit input. The input I solicit is to ask whether anyone has any pressing financial matters. They all respond confidentially by email, and I let them know that I’ll make decisions on who to pay first based on who I feel has the greatest need. Nobody knows who gets paid, per se, only whether they’ve been paid or not. It all works out beautifully! Well, not quite. Well, not even close, but it’s the best system I’ve come up with so far.

I’ve had employees quit because they weren’t getting paid on time. I’ve had employee quit because they felt they couldn’t depend on a paycheck to be there when they needed it. But so far I’ve only had one incident of someone quitting not because they were getting paid late, but because someone else was paid before they were.

What I feel bad about is that the employee never told me how they felt until after they quit. If they had told me they needed to be paid, even if it was only because they wanted to, I probably could have paid them earlier. But they told me they were fine getting paid later when in fact they weren’t, at least emotionally.

Over time things worked out between me and that former employee, but there was a time when I was worried he hated me. Still, I haven’t changed my system due to a lack of a better option being presented to me. Casting lots? Dice? Poker? Throwing a pencil at a list of employees? Playing miniature golf for paychecks? If you’ve got any ideas let me know.