As we have probably all heard by now, Silicon Valley Bank ("SVB"), the premier bank for high-growth startups, collapsed last week. This bank failure sent thousands of tech startups and venture capitalists into a panic. It created liquidity issues for many employers and among other serious concerns, it impacted their ability to pay their employees. Below we address some frequently asked questions relating to the collapse of SVB and its impact on employers.
The good news is that the federal government and financial regulators have announced a plan to mitigate the effects of the recent bank failures. As you may already know, the plan involves guaranteeing 100% of the deposits and placing the bank under the control of the FDIC, which will sell off the bank's assets to repay customers. Although this news is positive, given the economic uncertainty, it will have a ripple effect on employers, employees and their families. Most importantly—bank customers may face a short-term cash crunch while they wait to get a return on their deposits.
Yes—the fact that an employer's funds are held by a particular bank does not absolve an employer of their legal obligation to pay wages and salaries to their employees. The collapse of the bank was only exacerbated by the fact that the news broke on Friday, which was a payday for many bank clients. The federal Fair Labor Standards Act...
Dangote Group has dismissed as false and malicious a publication alleging that its President, Aliko Dangote, distanced himself from Tony Elumelu, describing the report as entirely baseless. In a s...