www.rockpapershotgun.com/2016/12/20/crytek-closes-five-studios-after-failing-to-pay-workers/

This boggles the mind. How is this even possible?

More importantly, why did those employees stay there for months while not being paid?! o_O

I try to place myself in their situation and it seems like there is really a single way to handle something like this. If my boss comes to tell me that I'm not getting paid, there are only two things I could possibly say:

1. It was nice working here, you will hear from my lawyer within a week.
2. Good bye.

In that order.

I was in a similar situation a couple of years ago and, well it doesn't work like that, unless you can prove that your company did something "illegal", as in the boss took all money for himself, you cannot really force a company to pay you money it doesn't have and if the company goes bankrupt then banks and other creditors take precedence over employees so you have no guarantee that once all those debts are repaid it will remain any money for you.

So in the end you stay hopping that thing will get better because the alternative means losing everything anyway.

Shame, they where a good studio producing a good engine.

I agree with Gersen, in small companies like this the employee's have a stake in the company. Sometimes it better to hope that you can pull something out of the hat rather than loose it all.

But doesn't that only mean you have a job, that you're not invested in at all? If you say and you could just leave any day. I on the other hand am very invested in the products I'm building for my company, and if we were in financial trouble, and my choice would be to leave immediately or stay for a while with hope that everything will get back on track I would definitely give it a month or two.

Yeah... particularly considering this isn't even the first time they've done it either.

Then again it can be hard to find a new job, and pretty scary to just walk out of one without anything lined up.

And if you haven't been paid for a while if you leave the chances of getting that money drop quite a lot, whereas if you stick around you might get it eventually. And of course the longer you do that the more there is to lose if you do go so it becomes a vicious cycle...

I'd say the moment this issue is even being raised the company is a lost cause and it would be prudent to simply cut your losses and find employment elsewhere. The longer you wait the more you will inevitably lose.

As to who gets paid first, I think it depends on the specific laws of that country/state/municipality. Generally employees are reasonably well protected. In the US, for example, the bankruptcy law states that employees have a priority claim.

In the UK you can get paid by the government if I remember correctly if the business goes bust and can't pay you... but I think you need to still be working there (hence why leaving isn't really an option) and it's a fairly long involved process. Whatever happens (here anyway) you should be reasonably well protected...

If you leave before the business is closed down or declared bankrupt you should be getting paid anyway. Not paying for services rendered is a crime. People quit their jobs all the time and are still paid what they are owed.

If you leave after it falls apart, yea it becomes interesting. The company's assets are sold and the resulting sum is used to pay its debts, of which, payroll is the primary obligation. This is independent of any claims an employee might make against unemployment insurance. Naturally you can't claim unemployment if you quit before the company shut down, but in both cases your salary is owed to you.

Generally the job market is likely not good enough for the average person, that's why leaving is a worse alternative. That said, ethically it might be better if the average person had a no money, we leave-rule because that would force companies to take care of them e.g paying as long as they can and when they can't, they release that information as fast as possible.

They are not closing the whole company, but some (most) of their studios worldwide. So Crytek still exists, but smaller.

And I can't imagine them being able to recruit anyone worthwhile given their (now established and confirmed) history of not paying people their salaries.

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Payroll is not primary, but it is high on the list. Secured creditors are the first and foremost, then the unsecured creditors with priority over the administration of the bankruptcy--i.e. the attorneys get their pay. Then, employees get wages with limits placed on it. (There's a couple smaller items before this, but for I've simplified it to show generally where the money goes).

I believe complaining to the labor bureau would have been a better strategy for employees (though this would only work for employees in the US and other countries with similar laws). If the company does file for bankruptcy, then it is no longer under the jurisdiction of the labor bureau and employees then become unsecured creditors.

As for why employees didn't leave Crytek after not getting paid... maybe they were promised to get back-pay and bonuses if they stayed around. I hope Crytek finds themselves in legal trouble over this.

They started out well but dipped their hands in dirty mmos and ms console exclusive and got burnt badly