The recent collapse of Silicon Valley Bank highlights many of the concerns that employers might face should they find themselves in the midst of a liquidity crisis. Making payroll, arriving at decisions related to wage reductions, considering furloughs – and possibly reductions-in-force – are just some of the actions you might need to take into consideration. But each of these potential moves carry with them significant legal risk and therefore must be approached with care. This set of FAQs provides employers with a general overview of the most significant topics on your mind during any liquidity crisis.
TABLE OF CONTENTSWage and Hour IssuesFurlough IssuesReductions in ForceShutting Down Operations
Employee Benefits Issues
Labor Relations
WAGE AND HOUR ISSUES
Does the fact that we cannot access our funds provide a defense to late or non-payment of wages?
Generally, no. While the reason for late or non-payment of wages may impact the potential for civil or criminal penalties, it is not likely to serve as a viable defense to late or non-payment of wages, or potential liquidated damages (which, in some states, like Massachusetts, are automatic regardless of intent).
What are the penalties for non-payment of wages?
The penalties for non-payment of wages, which can arise under both federal and state law, can be significant.
Federal Wage and Hour Law
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