Retroactively terminated as leased employee

[RaslDasl]

What is the name of your state (only U.S. law)? PA

I work for an IT consulting firm through an employee leasing organization. The leasing firm is the employer of record as well as the payroll processor. We are paid weekly, on the Friday following the Sunday end of the pay period. On Friday 6/28 we did not get our direct deposits as expected even though they pay statements for the week ending 6/23 was available online. The consulting firm (not the payroll company/employer of record) claimed there was a problem with payroll and they found out after 5PM on 6/27. They claimed they were going to convert to an internal payroll system.

Today (7/1) the IT firm first asked for home addresses to mail checks and then later for bank info to do direct deposit. This evening we found the termination letters on the leasing/payroll company's self-service portal. The letters are dated 7/1 but retroactive to 6/16. The letter instructs us to call them within 72 hours if we wish to continue working for the company. If we do not call, we will be considered to have voluntarily resigned and will not be eligible for unemployment compensation.

Further complicating this is that the IT consulting firm had previously sent us termination letters dated 6/28 due to the end of their contract with the upstream consulting company (who is also being terminated by the company we actually provide services to). Those who had not already left due to being insourced are have mostly transitioned to yet another IT consulting firm effective 7/1.

Where do we stand? Should we all call and say we do not wish to leave so that we are eligible for unemployment compensation for the two unpaid weeks? Will this be an issue if the IT firm makes good with paper checks? We basically assume that the IT consulting company stopped paying the payroll/leasing company who stopped payroll after statements were prepared but just prior to direct deposits being sent out.

 

[cbg]

You do understand that the employer does not decide if you are eligible for unemployment, right?

 

[RaslDasl]

You do understand that the employer does not decide if you are eligible for unemployment, right?

I'm concerned because we continued to work for the IT consulting firm (and were not unemployed as far as we knew) and may hopefully actually get paid for those two weeks. Should we all call the payroll/leasing company as directed and inform them of our desire to continue working for them after 6/16 even though we are almost all employed by an unrelated firm as of 7/1? What happens if we end up getting paid by the IT firm?

 

[swalsh411]

Two separate issues here.

1. Your employer must pay you for time you worked regardless of what happened with their relationship with their client. If they do not, you can file an unpaid wages claim with the PA Dept of Labor and Industry or sue them on your own.

2. You should apply for unemployment immediately using the last day you actually worked as your termination date. Don't worry about that letter you got or any claims your former employer is making that you are not eligible. They don't make that call. Simply state you worked until (DATE) and were then informed your services were no longer required. That's it.

 

[commentator]

Your employer was deceiving you if they arbitrarily tell you that you must make the call and tell them you want to work for the new firm or "you will not be eligible for unemployment benefits." The first week (Sunday through Saturday) that you do not actually do any work, regardless of when you will be paid for it or if you have another paycheck coming, you call and file for unemployment benefits. Explain to the system what exactly has happened, including the remark about how you must call and tell them you want to work for the new agency. If there is a new job for you to go to, I'd do it. But by federal wage and hour laws, the other company will be required to pay you for any time that you have actually worked, regardless of when they pretend you were transitioned or terminated. They can't let you work and then tell you to draw unemployment benefits to make up for time worked that they don't want to pay you for. If you worked it, you were not eligible for unemployment during the two weeks. Your pay will have to come from the employer who was employing you.

 

[LdiJ]

I think that I am reading this differently than the previous posters.

I work for an IT consulting firm through an employee leasing organization. The leasing firm is the employer of record as well as the payroll processor. We are paid weekly, on the Friday following the Sunday end of the pay period.

Translation: I work for an employee leasing agency that contracts my services to an IT company

On Friday 6/28 we did not get our direct deposits as expected even though they pay statements for the week ending 6/23 was available online.

Translation: The employee leasing company did not pay us on 6/28 as expected. The IT company probably didn't pay them.

The consulting firm (not the payroll company/employer of record) claimed there was a problem with payroll and they found out after 5PM on 6/27. They claimed they were going to convert to an internal payroll system.

Translation: The IT company said that they were going to start paying us directly, instead of the leasing firm paying us.

Today (7/1) the IT firm first asked for home addresses to mail checks and then later for bank info to do direct deposit.

Translation: Today the IT firm asked us for the information they needed to pay us directly.

This evening we found the termination letters on the leasing/payroll company's self-service portal. The letters are dated 7/1 but retroactive to 6/16. The letter instructs us to call them within 72 hours if we wish to continue working for the company. If we do not call, we will be considered to have voluntarily resigned and will not be eligible for unemployment compensation.

Translation: You are fired unless you call us and tell us that you will keep being our employees and won't accept being directly hired by the IT company. If you do not call us and tell us this, we are trying to scare you into thinking that you won't be working for either company and you won't be able to collect unemployment or get paid for the hours you already worked. We are trying to make sure that the It company doesn't have any employees to do the work.

Further complicating this is that the IT consulting firm had previously sent us termination letters dated 6/28 due to the end of their contract with the upstream consulting company (who is also being terminated by the company we actually provide services to). Those who had not already left due to being insourced are have mostly transitioned to yet another IT consulting firm effective 7/1.

Translation: We are firing the employee leasing company which means that as long as you work for them, you won't be working for us anymore.

Where do we stand? Should we all call and say we do not wish to leave so that we are eligible for unemployment compensation for the two unpaid weeks? Will this be an issue if the IT firm makes good with paper checks? We basically assume that the IT consulting company stopped paying the payroll/leasing company who stopped payroll after statements were prepared but just prior to direct deposits being sent out.

If I were in your shoes I would be contacting the IT company and asking them if they were giving you a job directly or not and if they were going to be making good on the payroll or not. It does sound like they intend to do so since they asked you for the necessary information to do so, but you need a more direct answer.

If you are unsatisfied with the IT company's answer or you don't want to continue working for them then you need to ask the employee leasing company what they intend to do about the wages you were not paid, and then decide if you are going to continue working for them or you are going to file a complaint for unpaid wages and file for unemployment.

You are clearly, in my opinion, caught in a war between the employee leasing company and the IT company. However, your employer for the period in question, the employee leasing company, had no right to not pay you for the hours worked, or to retroactively fire you, even if they didn't get paid. They cannot violate their contract with you, just because their contract with the IT company was potentially violated.