Silver Airways Not Paying Employees What They’re Owed, Offers 45%

A couple of days ago, Florida-based turboprop operator Silver Airways ceased operations, months after it filed for Chapter 11 bankruptcy protection. While the company initially claimed it would emerge stronger than ever before, in the end, the carrier was liquidated, and its limited assets were sold to another party at a low cost.

The saddest part of this situation is for employees — not just for the fact that they don’t have a job, but also for the fact that they’re not even being paid all the money they’re owed.

Silver Airways will only pay employees 45% of last pay period

Enilria reports how Silver Airways has just sent out its final paychecks to employees, but it’s not for the amount they were expecting. In a memo attached to the paycheck, employees have been informed that they’re only being paid for 45% of their last pay period. Here’s the memo, which is quite something:

It is expected that you are frustrated and angry with receiving only a partial paycheck today. It was roughly 45% of what was expected and if more receipts come in from recent flying, we will ask the court’s permission to pay additional amounts to our Team Members.

Words cannot express our collective frustration and disappointment. We thought we had found a solution for our company and our Team Members’ future with Wexford after many other failed transactions. It was a transaction that our board and I had hoped would save hundreds of jobs.

Nevertheless, despite statements by Wexford’s representatives in court that Wexford would pay for Silver’s operations after close and work out arrangements with airports and aircraft lessors, this did not occur. Wexford, with knowledge that its actions would shutter the company, walked away at the last minute. Wexford determined to purchase only the assets of the company and not the going concern (operations and employees).

As a result of Wexford’s actions, the company was left with limited cash. We did not know or expect Wexford was walking away until Tuesday, and we tried everything possible to bring them back. We exhausted all efforts to try and salvage the company.

Cash on hand at the time of the shutdown was used for a partial payroll and June medical insurance coverage.

We have reached out to a number of airlines to ask them to provide preferential treatment of our employees if they have employment vacancies and the response has been encouraging.

Your efforts and hard work are not ignored and are the reason we survived for many years with very limited resources. Thank you and apologies.

This feels like it shouldn’t be allowed

To state the obvious, I think it’s super wrong that Silver Airways employees are being treated this way. They showed up to work expecting to be paid a certain amount, and now they’re being told that they’ll get less than half of what they’re owed.

I’d assume that most frontline Silver Airways staff aren’t exactly rolling in dough, and are relying on this pay check to cover their basic living expenses. Never mind that they’re out of a job going forward, but they’re not even being paid for the work they have already performed.

Look, I can kind of see how this happened, but that doesn’t mean it’s okay. Silver Airways ceased operations because it ran out of money, so I can see how there wouldn’t be enough money in the account to actually pay employees.

But my gosh, it sure seems like paying employees what they’re owed should be part of any deal, and for that matter, company executives should be required to keep enough cash on hand to pay employees for the work they’ve already performed, beyond what creditors are owed… no?

The tone of this memo is interesting. On the one hand, it comes across as apologetic and sympathetic toward employees. On the other hand, it tries to completely shift the blame, almost as if management is a third party that has nothing to do with why employees aren’t being paid. I’m not really inclined to give Silver Airways management the benefit of the doubt, given the company’s shady financial history.

Bottom line

Silver Airways has just liquidated. That’s sad, because it means a lot of people are out of a job. Even worse, the company’s employees aren’t even being fully compensated for the work they’ve performed, with employees just getting 45% of what they expected for their last pay cycle.

No matter how you slice it, that’s not okay… right?