Companies impacted by the Silicon Valley Bank (SVB) failure may be concerned about their ability to meet immediate payroll obligations as they await funds from government regulators. Despite regulatory assurances that funds will be available in the near-term, employers with funds in SVB may remain concerned about their ability to meet ongoing obligations. As a result, employers may be considering alternatives and stop-gap measures and should assess the following employment law issues and look at the specific laws of those jurisdictions in which their employees work:

• Failure to pay employees on announced pay dates puts an employer at risk of liability under the federal Fair Labor Standards Act (FLSA) as well as wage payment laws in many states. These laws provide for the recovery of back pay, attorneys’ fees and liquidated damages, which may be 100 percent of the back pay owed under the FLSA or even more in some states that provide for treble damages.
• State wage theft laws may demand notices to employees who will not be paid and further may provide for statutory penalties and fines and even criminal penalties in some circumstances.
• Missed payroll also may have payroll tax implications for failure to deposit employment taxes with the IRS on time. Penalties vary by how many days past due the taxes are, with fines ranging from 2-15 percent. To conserve funds, or in an attempt to avoid missed payroll, employers may consider pushing back payroll dates, but there are limits and...

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