Unpaid contract fees from a NYC client


I work for a GA based company (who holds my H1 visa) and was doing a contract assignment for a client in New York City.

The NYC client has $40,000+ in unpaid balances towards my company for the services that I have provided them with during Dec 2004 thru' Mar 2005. I have a verbal contract with my employer to get an X% of the hourly contract rate.

I had the client sign an agreement acknowledging the unpaid amount with an unconditional guarantee to pay the accrued amount based on a pre-defined payment schedule. But the client (although still in business) hasn't been doing well and has violated the agreement in the very first week of payment. They also have not been responding to any calls or emails.

I quit working for that NYC client and now working with a different client. But I need to recover the money from my previous contract and fear that I would lose the money if the NYC client went out of business since they owe money to company employees and several other vendors.

How can I best get my money ASAP?

Can I charge them with penalties and/or interest on the unpaid amount?

Is there a way to get NY DOL involved on the case?

Please advise.


1 answer  |  asked May 10, 2005 7:16 PM [EST]  |  applies to New York

Answers (1)

David M. Lira
Getting Paid

Your situation is a good example of how employers are increasing fudging the definition of "employee," and the confusion that results with employees. When I read this query, I had to ask myself whether you are a partner in the Georgia company, whether you are an independent contractor, or whether you are an employee. I also had to ask who you were employed by, the Georgia company or the New York company.

My understanding that when an employer signs onto an H1B Visa application, the employer is promising the government that it will keep you as an employee for a fixed time at a fixed rate, and that the rate is comparable to the market rate for employees in your line of work. Because you are on an H1B Visa, it would seem that you are an employee. Because the Georgia company was the employer who was apparently on the visa application, it seems the Georgia company is your employer.

Being classified as an employee is important, in that your pay cannot be made contingent. Thus, you are entitled to your pay, as set by the visa application, from the Georgia company, regardless of whether the Georgia company is able to collect from the New York company.

The Georgia company can hire you (even on a contingent basis as an independent contractor) to do their collections work, but doing so does not relieve them of their responsibility for paying you your wages.

The New York State Department of Labor can help in collecting unpaid wages but only from an employer. That is, it will not help you collect from the New York company. It also works only on claims of no more than $625. For anything more than that, you really should consult an attorney.

posted by David M. Lira  |  May 11, 2005 07:53 AM [EST]

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