The recent closure of Silicon Valley Bank (the “SVB Closure”) has created liquidity issues for many employers, which in turn may impact their ability to, among other things, timely pay employees and operate their compensation and benefit programs. This alert discusses key employee-related considerations for employers that may arise in the wake of the SVB Closure and related disruptions in the employers’ access to liquidity. We note that as a consequence of the liquidity crises produced by the SVB Closure, federal and state labor (or similar) agencies may eventually provide employers with some level of relief from their obligations under applicable federal and state labor law through the issuance of emergency or similar orders. However, as of the date of publication, there is no indication that these agencies will provide employers with any immediate relief.

Immediate Steps to Consider

• Payroll/Employee Communications:

  • Communicate immediately with employees regarding potential delays in payroll timing and provide prompt updates on changes. Transparency is the key to maintaining trust within the employer’s workforce during challenging times. If switching payroll to another financial institution, ensure compliance with wage rules that prevent changes to employees’ elected methods of payment without consent. Employers must be mindful to accurately withhold applicable taxes and other authorized deductions from wages (and to timely remit these amounts to the applicable tax...

Read Full Story: https://news.google.com/rss/articles/CBMiU2h0dHBzOi8vd3d3LmxleG9sb2d5LmNvbS9s...