Bankruptcy doesn’t excuse employer’s responsibility for wages
Wage and Hour Division (WHD) Director John DuMont stated, “Payroll earlier than revenue is without doubt one of the key ideas within the Truthful Labor Requirements Act.” A West Virginia mining firm that laid off 44 staff earlier than submitting Chapter 11 chapter came upon the exhausting method that the Division of Labor’s WHD will go to nice measures to guarantee that employers don’t illegally revenue on the backs of staff. It needs to be a lesson to all employers who suppose they will get away with out paying all wages due.
Employees denied final paycheck
Ben’s Creek Operations WV LLC not solely laid off their staff earlier than submitting chapter, in addition they didn’t pay staff their closing paycheck. Employees had 2 weeks of labor on the books, from March 31 to April 13, 2024. Their closing paycheck was due on April 19, however the firm did not difficulty paychecks, more than likely as a consequence of their chapter submitting just a few days prior. Throughout the WHD’s investigation, it was decided that the corporate had produced 40,000 tons of metallurgic coal, which was value over $3 million. On the first of Might, the Division of Labor obtained a courtroom order stopping the mining firm from promoting the coal that was mined throughout its closing two weeks of operations till the again wages had been paid.
What to be taught from this case
The WHD division recovered over $175K for these staff. Happily for the miners, the employer did cooperate with the WHD and pay the again wages. DuMont additionally stated,
“A chapter submitting doesn’t excuse an employer’s obligation to pay staff for all of the hours they labored or permit them to violate federal regulation.”
With small enterprise bankruptcies on the rise, all employers needs to be conscious that the Division of Labor will rise up for staff who’re denied wages, for no matter purpose. On this case, they may stop interstate cargo of products for violating minimal wage or extra time rules.