Arbitration/Mediation/Payroll Dispute


I am paid twice per month, usually on the 15th and last of each month (depending on where weekends fall). The company I work for pays us on the day in which the pay period ends, since we are a small company and my salary is always the same. In past years, our Christmas bonus has been paid on December 15, after which we receive a final, end-of-year payroll on or about Dec 30 (we usually have the 31st off). I asked my admin today why my end-of-year wire had not hit yet and he told me that the Dec 15 pay included the end-of-year pay. I was not informed of this in writing or verbally until today, and in past years this was never done. Am I entitled to pay for the period ending Dec. 30?

Thank you for your question!

As I always note to questioners, mediators act as neutral third parties to disputes and never "get involved" in judging the merits of conflict, but merely use special techniques to help the parties decide how to negotiate their own settlement.

I am not a lawyer and cannot give you legal advice, nor can I mediate this with you alone but I can respond to your question from my business consulting experience.

Note that this matter may have legal ramifications and you may wish to consult an attorney.

The short answer is that you are due the payroll for the entire month.  First of all, do the math and make sure that two pay periods worth of pay (plus any bonus) are not all crammed into the one payroll event on December 15.  If not, then perhaps a problem is evident.

Remember that you are dealing with organizations and managers who are only interested in the path of least resistance in terms of how they manage the business.  I'm guessing they could care less about you so don't put too much investment in their position.  They want to try to make up "so called" business reasons to justify their behavior and now you must create additional "business reasons" to deal fairly with you.

Please begin by documenting a very careful chronology of events as they have occurred.  Names, dates and locations.  Put things in writing at this point paying careful attention to any evidences of how others have been treated in similar situations--good or bad. You want to be able to document patterns of practices.

If there are any, please request a written copy of the policies and procedures pertaining to your employment rights from the company or union (or both).  Make sure you get a specific copy of any grievance procedures.  If possible, determine if others in the company are seeing this same phenomenon.  Also ask in writing for a written explanation of the detailed reasons for the discrepancy. Place your requests in writing and send them certified.  This will notice up the company that they have awakened a potentially serious problem.  

If you have one, you should have a fairly detailed grievance process available to you through your union.  You will also likely have access to State Employment offices that can assist you to file a grievance.  These are the most likely best avenues to follow.  You may also have some rights with the US Dept of Labor.

Once you understand the complete process, you would want to send a demand letter certified, state your case, and ask for your missing pay and bonus money or other resolution remedies appropriate you are seeking.  You should think about copying your letter to:

US Dept of Labor
State Labor Office
Better Business Bureau
Local press outlets
Your Union
Trade associations or certifying bodies

The company and the union (if applicable) must see that their behavior can be quantified in specific economic harm to you, and it will cost a lot more to deal with all the problems you will cause them for their practices and then they will make a business decision and settle fairly with you.  Be cool, calm and professional, but be sure that they know you are serious as a heart attack and have every intention of seeking either to be made whole or you will be after them in every way possible.

These are some ideas.  Feel free to follow up with additional questions.

For your information, the pros and cons of the types of dispute resolution methods follows.


Arbitration, Mediation, and Litigation

Arbitration: the referral of a dispute to one or more impartial persons for final and binding determination outside of the judicial system

Benefits of Arbitration:
Confidential, no public record
Limited exchange of documentation, information
Quick, don't have to wait for a court date
Arbitrators have expertise in the subject matter and are trained in conflict resolution
Cheaper than litigation
Preserves business relationships

Negatives of Arbitration

It's a compromise, no 100% winner
Complex arbitration can be costly
If not satisfied, may litigate the arbitration procedure
Poor results with an unskilled arbitrator
Both parties must agree to cooperate in the process

Mediation: the process by which parties submit their dispute to a neutral third party (the mediator) who works with the parties to reach a settlement of their dispute.

Benefits of Mediation:

Neutral mediator can objectively suggest alternatives not considered before
Parties are directly engaged in negotiating the settlement
Can be quicker than litigation
Less costly than litigation
Preserves business relationships
85% of American Arbitration Association cases mediated find successful solutions

Negatives of Mediation

may not reach a binding decision
unskilled mediator

Litigation: using the judicial system to resolve disputes

Benefits of litigation:

a clear winner and loser
uses a prescribed set of procedures
more predictable outcomes
is final

Negatives of Litigation:

waiting for court dates can do more harm
usually more expensive than mediation and arbitration
part of the public record  


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Timmy Chou


I am a experienced Mediator and a partner in a management consulting firm. As a mediator I work as a third-party neutral and specialize in partnership/shareholder disputes, management/labor issues, company culture difficulties, and family-owned business problems. I can help describe why alternative dispute resolution may be a good choice for you. As an experienced management consultant I may be able to offer creative ideas to help resolve your organizational and business problems and disputes. "If you say conflict, I say opportunity".

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