If I go out of business, what can the dept of labor do about unpaid wages that may exist?
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If I go out of business, what can the dept of labor do about unpaid wages that may exist?
90 of my staff walked out without notice
and has forced me out of business. I have
paid the employees for what they worked.
They are claiming I owe them more than
that. The labor board is now involved. What
can they do if Im out of business?
Asked on March 18, 2019 under Employment Labor Law, Virginia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
If the business was an LLC or corporation, you should not be personally liable for the unpaid wages: only the business entity should be. So if there is no more money in the business, neither the labor department nor the employees (if the sue you) should be able to force you to pay--as stated, all they are entitled to is whatever (if anything) is left in the company.
If the business was a sole proprietorship, however, you were the business: you are personally liable for the business's debts and obligations, including unpaid wages, and could be forced to pay out of pocket.
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