I won’t go into all of the details, but basically, I worked and never got paid.
Now the business is closed and the owner isn’t returning my calls to his personal cell phone.
What are my options?
What state agency might I contact about this?
If I sue him, would that be in small claims? (the amount is just under $2,000)
And if he declares bankruptcy, how do I insure that I get what I’m owed?
Thanks for any advice!
Int.
Anyone answering this needs to know which state, province or country you live in – you haven’t given it in your profile.
Do you have a state Department of Labor? or Employment Commission? Consider starting there.
What documentation do you have of hours worked etc.? You could cobble together proof of having been hired, any documentation of expected salary etc,. and any other documentation you can think of and report it to the DoL. Also report it to the state and federal taxing authorities - they might be very interested in hearing that money was earned and they didn’t get their cut. The authorities would include the regular income taxing authority, as well as the state unemployment commission (generally separate from the income tax people).
Not sure how you’d find out how to get on the list of creditors if the employer is truly declaring bankruptcy.
IANAL, but it’s my understanding that you are most likely pretty much screwed at this point.
Most businesses these days are set up as an LLC, which limits the owner’s financial liability. If the LLC goes under, everyone that the company owes money to gets in line, and what little money remains after the company’s assets are sold goes to cover these debts. Unless the company has a lot of assets though, most of the folks in that line won’t end up getting paid. You are now just one more person looking to get into that line.
It’s important to note that the LLC can go bankrupt while the owner himself does not. You may be entitled to sue the LLC but not the owner, and the LLC may not have any money left to pay you with.
Talk to a lawyer, but I wouldn’t have much hope of ever seeing that $2k if I were you.
This page at the U.S. Department of Labor website may be helpful.
It looks like engineer_comp_geek is right, especially if the business owner declares bankruptcy: unpaid payroll is treated as unsecured debt, which is the lowest priority when settling up a bankruptcy:
http://www.linkedin.com/answers/law-legal/corporate-law/corporate-law/LAW_COR_CRL/336918-16035626
Of course, highest priority is the non-dischargeable sort, which often includes government debts. I wonder if the taxes owed on your payroll would count for that.
Does his business have any hard assets that could be liquidated to pay any claims in the event of a bankruptcy?
Sounds like your SOL. Move on and get some more work. If you’re self employed, write it off as a bad debt and take the deduction on your income taxes.
This is in Washington State.
I should have bailed when he had to pay for deliveries with cash, but I couldn’t find ( and still haven’t found) another job.
Thanks for the links, I’ll start there. Though I don’t have much expectation of getting this, I’ll report any success.
Int.
An enterprising lawyer could probably find a way to pierce the corporate veil. Especially if the owner knew at the time the check was written that it would bounce. Bouncing checks is usually a crime. Here in California it is definitely a crime, and a felony at the amount in question.
You may want to file a report with the local PD, it may provide the owner with the motivation he needs to solve this.
If you read the post you just quoted, it shows that payroll is treated in a category higher than unsecured debt, but lower than secured debt. It’s number three in the list of “priority claims” the comes between the two types of debt. So if the company didn’t have much secured debt, the OP may be in luck.
Where I live, the local DA actually formed a special unit to address bad checks. The area has an extremely high rate of NSF checks; my business no longer accepts checks.
What check are you talking about? The OP never said they got a check and it bounced. They said they never got paid.
Thread title implies it…
Ahhh, missed it after getting into the thread. :smack:
Not really. **No Funds to cover paycheck— ** could include: and therefore they didn’t issue me one.
I agree, but the thread title explains IAmNotSpartacus’ post.
Only the OP can come and clear it up.
Were you an employee or was this a contractor/contracting situation (do x and I’ll pay you XX) ?
I don’t know much about them, but if you did work on a building or vehicle, a mechanic’s lien might apply. (depending on your jurisdiction’s rules, etc etc etc)
I was in a similar situation a few years back and the State Dept. of Labor helped us. It took about 3 months, but I got what I was owed, plus a few hundred extra dollars. Not sure why I got that but I didn’t complain.
Yeah, the thread title clearly implies it. In fact, I think most reasonable people will assume that the mere mention of funds not being present to cover a check speaks directly to its ability to be negotiated.