Galaxy Racer NA Employees are Owed Two Months of Back Pay

Employees at Los Angeles-based Galaxy Racer North America/Her Galaxy have not been paid for at least two months, according to sources who spoke to The Esports Advocate this week. Further, we have been told that a majority of the company’s North American employees are strongly considering a mass resignation or a lawsuit if they don’t get paid what they are owed on Wednesday. 

Galaxy Racer North America is based in Los Angeles and employs approximately 10 – 12 full-time employees. It is also the home of Her Galaxy, which hosts competitions that support women and marginalized genders. GXR NA and Her Galaxy are owned by Qatar-based international esports organization Galaxy Racer.

According to sources, executives from Galaxy Racer HQ (the parent company headquartered in Qatar) including CEO Paul Roy and Chief of Staff Walid Singer have been telling employees that payments are coming since early-October, but when that pay didn’t materialize on Thursday (a recent date of  promised payments, according to sources) leadership blamed complications with wire transfers, changes in policies at its bank, and complications related to its pending merger with Riva Technology and Entertainment (RTE — formerly MSM Corporation International Limited). Also involved in the day-to-day operations and the conversations about late pay was Ajay Narang, an outsourced fractional accountant from a third-party service provider who handles accounting, manages the company’s bank account/wire transfers, and more. 

As the deadline for that recent promise of payment came and went on Thursday, CEO Paul Roy claimed at the time that the bank had frozen/locked down transfers from its accounts due to a paperwork issue. According to sources, Roy told staff on Monday that the necessary had been filed and that he expected stalled payments to be released on Wednesday. 

Sources tell us that payroll being late for North American employees has been an ongoing issue—with one source claiming that this is the fifth time the company has been months late in making payroll. 

But late payments are not the only factor in staff considering a mass resignation from the company; sources tell us that the 180-day term for prize payouts on its $100K Apex Legends tournament are soon due and staff does not want to be blamed if those payments are delayed further, as the prize pool will be paid from Galaxy Racer HQ (Her Galaxy/Galaxy Racer NA does not have direct access to any funds). As winners were announced on June 25, that would mean that payments to winners would be due on Dec. 22, by our calculations.

Sources also claim that Joyce Ajouri, who joined the company in late-August/early-September as its new director of operations for NA, has not been paid since she took on the role. TEA reached out to Ajouri prior to the publication of this article, but she declined to comment.

TEA also reached out to GXR CEO Paul Roy, GXR Chief of Staff Walid Singer, and Ajay Narang prior to the publication of this story, but they did not respond to our requests for comment at the time of writing.

Also on Tuesday, the anonymous whistleblower that blasted Galaxy Racer management in September, sent a new email expressing frustration with management and investors, and called on the media to take action. The email was sent to Galaxy Racer’s top executives—including CEO Paul Roy and Chief of Staff Walid Singer, media outlets, journalists, GXR employees, and North American investors (Billie Jean King Enterprises, Elysian Park, and R/GA Ventures). That email reads:

For nine weeks, we’ve gone unpaid. Team members are facing evictions, left with nowhere to turn. The only word from Paul Roy pins the bank as the issue, but that excuse isn’t cutting it. It’s time for action — everyone on this email is on board. We’re wide open for dialogue and urgently require support for our legal action, as this is a global matter. Countless individuals are chasing payments while Paul Roy keeps dodging the hard questions, tossing us nothing but tall tales from behind the safety of his screen.

Enough is enough.

Calling on the press — we’re locked and loaded to broadcast our struggle. Email all of us we will talk.

This isn’t just unfair, it’s inhuman. We’re calling for HELP!!!!

To the investors getting this message: are you really going to ghost us, just to save face? We’re talking about feeding our families here.

In addition, sources also claim that the company owes tournament platform LeagueSpot and Apex Legends casters HisandHersLive an undisclosed amount of money for the work it did on its last tournament this summer, the Her Galaxy $100K Apex Legends Open. LeagueSpot and HisandHersLive did not respond to a request for comment.

Finally, sources pointed out that when employees were initially on-boarded, they were promised 401K and healthcare plans, but those benefits were never provided; currently employees are given a stipend to pay for healthcare plans they selected for themselves—but like their pay—management has been behind on making those payments in a consistent and timely manner.  In the past, management claimed that it was providing employees with “above average” insurance plans that included healthcare and dental coverage—a claim that sources strongly pushed back on.   

What is the Law on Late Payments to Full-Time Employees in California?

Curious about the rules and associated penalties related to companies being frequently late in paying full-time employees, TEA reached out to the ESG Law for more general information on the subject. The LA-based firm, which represents a number of esports organizations and companies, gave us a general sense of what the rules are in the state. It should be noted that these comments are not specific to Galaxy Racer or its situation with employees, but rather a broad overview of what the law is in California and what employees can do in this type of situation.   

ESG Law Partner Krista Hiner (who is also one of the co-founder of the Esports Bar Association) offered the following comments to TEA on employers in California being late on paying full-time employees and what rules might apply to health care coverage:

In California, if an employer fails to timely pay wages that were indeed owed to an employee under the law, then in addition to the wages, they are likely liable for penalties (penalties can be payable to both the employee and the state). There are some nuances here depending on the specific claim and contract provisions regarding arbitration and PAGA claims (“Private Attorney General Act” claims), but most generally, liability will include a per violation penalty, $100 initially, then $200 plus 25% of the amount of withheld wages, and reasonable attorney fees.  If the employer intentionally or willfully withheld wages (as opposed to accidentally), then penalties will often be equal to their actual wages for each day late, for up to 30 days.

Employees with unpaid wage claims can file with the California Labor Commissioner’s office, and should consult with a California-licensed attorney who litigates these claims on behalf of employees.

Even if the employer is located in another state, if they are employing residents of California, California law will generally apply to those employment activities. Best practices for out-of-state employers include formally registering to do business in California and complying with California wage, labor, and employment laws.

The general rule on employer-provided health care in the US is employers with 50 full-time-equivalent employees must offer affordable healthcare coverage to avoid penalties. Benefits/health care is its own very specialized area of practice and I’m not an expert in all those regulations so unable to comment further on that.

This is a developing story and will be updated with additional information as it becomes available—including comments from management and other principles TEA reached out to on Tuesday afternoon…