AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
Unpaid wages are a debt the employer owes. Under the Labour Act, wages fall due at the end of each agreed pay period and at least monthly, and an employee can complain to a labour officer of the Federal Ministry of Labour or sue at the National Industrial Court for the arrears. An employer that cannot pay should agree a written repayment schedule with staff before matters reach that stage.
When salary becomes legally due
Section 15 of the Labour Act says wages become due and payable at the end of each period for which the contract is expressed to run, whether daily, weekly or another agreed period. Where the period is longer than a month, wages must still be paid at intervals not exceeding one month. Once the agreed pay date passes, the salary is owed.
Other provisions tighten this:
- Section 17 requires the employer to provide work, or pay wages for days it fails to, except in a temporary emergency beyond its control; even then the worker is paid for the first day.
- Section 11(7) requires all wages payable in money to be paid on or before the end of any notice period, so a departing employee's arrears must be cleared when they leave.
- Section 5 bars deductions from wages except those the Act or another law permits, and caps total deductions at one third of a month's wages. An employer cannot quietly net off arrears against debts it says the worker owes.
What employees can do
Raise it internally, in writing
A written request for payment, with the months and amounts, creates a record. Staff often do this jointly through a union branch or staff association where there is one.
Complain to a labour officer
The Labour Act provides for authorised labour officers of the Federal Ministry of Labour, who can inspect workplaces and receive complaints. The Act requires officers to treat the source of a complaint as confidential and not tell the employer that a visit followed a complaint.
Go to court
Employment disputes, including unpaid salaries, are heard by the National Industrial Court. The court regularly makes orders for payment of sums owed under employment law; in one example reported on 7 May 2025, it ordered an employer to compute and pay statutory contributions dating back to July 2011. A worker can claim the arrears, and the contract may also support claims for other benefits withheld. Our guide on suing an employer at the National Industrial Court covers the process.
Resign and claim
Persistent non-payment is a serious breach of contract. An employee may treat the contract as ended and claim what is owed, though leaving first and suing later should be considered carefully, with advice.
The knock-on effects for the employer
Owing salary rarely stays a single problem. PAYE that was deducted from pay but not remitted attracts penalties under section 107 of the Nigeria Tax Administration Act 2025, and pension contributions are due within seven working days of salary payment according to PenCom. Skipping a month of salary often means those records also fall out of line, which then blocks a pension compliance certificate or tax clearance.
Agreeing a repayment schedule
If cash is short, the safer route is a written agreement with each affected employee. Keep it specific.
- State the exact arrears per person, by month.
- Set dated instalments, and keep current salaries paid in full alongside them.
- Confirm that statutory deductions on the arrears (PAYE, pension) will be paid when the arrears are paid.
- Get each employee to sign voluntarily; do not make signing a condition of keeping their job.
- Pay on the dates promised and send a short note with each instalment.
Worked example: a three-month catch-up
Example only. A small logistics firm owes three drivers two months' salary at ₦150,000 each: 3 x 2 x ₦150,000 = ₦900,000 in arrears. It agrees to pay ₦300,000 of arrears each month for three months (₦100,000 per driver), on top of current salaries of ₦450,000. Monthly outflow during the plan is ₦750,000, and the arrears are cleared at the end of month three.
Evidence that decides these disputes
Whichever side you are on, the outcome usually turns on documents. Section 75 of the Labour Act requires employers to keep records of wages and conditions of employment, retained for three years, and the Nigeria Tax Administration Act requires business records to be kept for at least six years. An employee should keep:
- The offer letter, contract or written statement of terms
- Payslips and bank statements showing what was and was not paid
- Any emails or messages acknowledging the arrears or promising payment
- Pension statements from the PFA, which show whether contributions stopped
An employer should keep the signed repayment agreement and proof of each instalment. A clear record of what was agreed and paid is usually what persuades a labour officer or court that the employer acted in good faith.
Where Pryme fits
A repayment schedule is easier to keep when instalments are set up as scheduled payments from a Pryme Business Account, with a receipt for each one. You can issue a verifiable receipt with VerifyDoc.ai for every instalment, so both sides hold proof of what was paid. The Finance agent can track what remains owed and flag the next date; see Finance agent.
Questions people ask
What can I do if my employer is owing me salary in Nigeria?
Ask in writing first, then complain to a labour officer at the Ministry of Labour, or sue at the National Industrial Court for the arrears. Keep payslips and messages as evidence.
How many months can an employer owe salary in Nigeria?
None. Section 15 of the Labour Act makes wages due at the end of each agreed period and at least monthly. Any unpaid salary after the pay date is a debt.
Can I report my employer to the Ministry of Labour for unpaid salary?
Yes. Authorised labour officers receive complaints and the Act requires them to keep the source confidential.
Can an employer deduct money from salary arrears?
Only deductions permitted by law, and total deductions in a month cannot exceed one third of wages under section 5 of the Labour Act.
Sources
- Labour Act, Cap L1 LFN 2004 (PLAC Laws of Nigeria) · accessed Oct 2026
- National Industrial Court: employer obligated to pay minimum 1% of payroll into ECF (7 May 2025) · accessed Oct 2026
- Nigeria Tax Administration Act 2025 (Act No. 5), ss.14, 28, 31, 51, 65, 101-107 · accessed Oct 2026
- PenCom: Frequently Asked Questions (2023 edition) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.