UPDATE: SVB depositors are expected to be able to access their deposits on 13 March, 2023. We are closely watching developments on this topic.

For more information, refer to this Joint Statement by the Department of the Treasury, Federal Reserve, and FDIC.

OVERVIEW

On 10 March 2023, the financial world was rocked by the collapse of Silicon Valley Bank, a choice institution for tech startups and venture capitalists. Numerous companies had millions or hundreds of millions in cash deposits at Silicon Valley Bank, with only US$250,000 per customer insured. Overnight, many employers in the tech space went from a position of high liquidity to one where their deposits were frozen. Even companies who were not customers of Silicon Valley Bank may be impacted if their payroll provider utilized Silicon Valley Bank to process employee payroll.

Employers across the United States are subject to wage and hour obligations, and many states have specific rules regarding timing of payment, method of payment, and penalties for failure to comply with those specific rules. This resource provides an overview of an employer’s obligations, including payroll timing obligations, and issues surrounding potential short-term solutions such as furloughs. This article will be updated as lawmakers and government agencies weigh in on issues relating to the Silicon Valley Bank collapse.

Payroll Obligations

When an employee performs compensable work, the employer must issue payment in accordance with state...

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