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Complying with Wage and Hour Obligations in the Face of Crisis

The recent seizure and shutdown of Silicon Valley Bank and Signature Bank highlights the importance of employers preparing for unexpected liquidity crises. Despite such challenges, employers must meet wage and hour obligations and handle furloughs or layoffs effectively. Penalties for non-payment of wages can be significant, and individual liability may also be at stake. Planning ahead with emergency measures is crucial to avoid wage and hour issues during crises. Click here for article.

  • Non-Payment of Wages:

  • Inability to access funds is not a defense for late or non-payment of wages.

  • Federal and state penalties for non-payment can include civil penalties, liquidated damages, and attorneys’ fees.

  • California imposes penalties of $100 or more per employee for each period of late payment.

  • Furloughs and Lay-Offs:

  • Employers should consider furloughs or reducing the workforce if unable to pay employees.

  • Furloughs require timely notification to employees, especially regarding compliance with wage and hour laws.

  • In California, waiting time penalties accrue if employees do not receive final pay within 30 days of termination.

  • Emergency Planning:

  • Employers need an emergency plan to avoid wage and hour issues during crises.

  • Contingency measures include using paper checks, contracting with backup payroll vendors, and identifying alternative financing options.

  • Individual Liability:

  • Corporate officers or directors may face individual liability under federal and California law.

  • Compliance with wage and hour obligations is crucial to avoid personal legal exposure.

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