I've seen both. The most truly pathetic thing I have seen was the rush to the bank to cash the payroll checks because certain employees knew that the account only had enough to pay a certain number of employees. Have also seen an innocent bank failure that screwed a payroll cycle. Luckily the bank covered overdrafts for the day it hosed everyone[1].

When the company is innocent, its best if the employer shows the employees the cause of the failure and be really, really oversharing so us very angry workers aren't inclined to riot.

1) at this late date, I get the feeling because the town was small enough to call around and make sure people banking at other banks didn't overdraft either instead of covering them money-wise after the fact.

Oh boy, that sprint to the bank sounds absolutely devastating. :(

When the business office people leave work 15 minutes early, then the rumor spreads and you have a parking lot of people driving like Mad Max to the bank the company uses[1], it does get pretty bad. I was an observer since I worked for someone else.

It was in the 90's and there were "personal adjustments" that occurred later on.

1) cannot drive to your bank because then the check would bounce and really do some extra fun damage - plus this was before direct deposit was available at that company

I've had actual experience of this sort in an established, relatively large company with a dedicated CFO. Worse and worse every month. A true mistake is acknowledged, not repeated, and addressed: the opposite of what a failing company in denial does.

Interesting; and that's a shame. I guess I just mean to say that a mistake like that could legitimately be a mistake. I'd be horrified if our employees thought we were going bankrupt because our payroll system had a bug in it!