What are the rules on a store going out of business and paying its employees?

UPDATED: Sep 30, 2022

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What are the rules on a store going out of business and paying its employees?

The small business I worked for went out of business yesterday. The owner gave no notice to any employee or manager, just showed up with moving trucks and told us to find another job. I have been working there for 3 weeks and haven’t been paid. They claim my direct deposit form was filled out incorrectly, however I reviewed the form and it is 100% accurate. The guy who owns the business has all his other stores in another state. What are my options if I do not get paid and in what timeframe do I have the right to be paid? Did this owner also violate any of our rights by not giving us notice we would no longer have a job many of us are in high

school if that makes a difference?

Asked on May 12, 2016 under Employment Labor Law, Arizona


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

1) A small business has no legal obligation to provide notice to its employees that it is going out of business, unless the employees have a written contract requiring notice in this case.
2) The fact that you are in high school has no bearing on the case, one way or the other.
3) You can sue for the money you are owed. If the business was an LLC or corporation, you can only sue the business (the LLC or corporation) itself, which means that if it's out of business, you will probably not get paid--even if it has not been formally dissolved, if it has no money, it can't pay, even if you win the case. If the business was not an LLC or corporation, however, you can sue the owner personally for the money. If you are still a minor, you may need your parent(s) or legal guardian(s) to bring the suit for you. Suing in small claims court, representing yourself to avoid legal fees, is a good option.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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