Q&ACategory: GeneralA friend of mine was asked to leave a startup because they don't have money left. What should he do?
Alle Cheong asked 2 months ago

My friend was working in a startup for 3 months and recently he was told to leave without any notice because the company has no money left. Worse is, there was no agreement signed between him and the company because the company somehow was trying to delay that matter. I know this has nothing to do with running a business but I was hoping you can offer some advice.

1 Answers
Melvin Wong Staff answered 2 months ago

I’m sorry to hear that Alle.

I’m not sure which country your friend worked at, as different country (such as the U.S) have different labor laws. This is what he or she can do.

  1. Do note that almost all employment relationships are presumed to be “at-will” in almost all states in the U.S. Which means the employer could end the relationship at any time and for any reason (or no reason).
  2. If the company is based in a country outside of U.S where typically employers supposed to provide notice of termination, then ask politely from the company if they could offer some sort of compensation for him to go. Saying that he needs to pay for his expenses while he looks for another new job. If they couldn’t afford to a month’s pay as compensation, at least 2 weeks or so. This really depends on when he was told to leave.
  3. If the above fails, talk to the country’s labor department (usually a complaint department) and ask for their advice. Bring along any written evidence to prove that your friend actually worked or hired by the company – paycheck/pay slip/bank statement, emails, letters, documents, etc. Correct me if I’m wrong, usually even there’s no written agreement between an employer and employee, there’s a default labor law that every employment matter falls into. So, maybe your friend is protected within that law. And also remember that usually the government is on the employee’s side rather than the employer’s. So, all hope might not be lost.

Your friend perhaps may not want to burn the bridge between him and the startup, so he has to decide what he really wants to do.

Disclaimer: I’m not a lawyer thus above is the only advice I could give.

Melvin Wong Staff replied 1 month ago

Hello Alle,

I hope things went well with your friend. If you need more help on this matter, don’t hesitate to leave a comment here. Or you may open a new private question.