4 ms·

Missing payroll is one of the few items that can pierce the corporate veil. Laying off employees is one thing; saying that the work they've done over the last

by Spoom 11y ago

Missing payroll is one of the few items that can pierce the corporate veil. Laying off employees is one thing; saying that the work they've done over the last two weeks will now be paid at minimum wage is quite another.

dangrossman 11y ago
Actually, so long as you pay minimum wage before folding, there is virtually no chance a state or federal court would pierce the corporate veil and impose personal liability. This has been upheld in both California's supreme court and federal courts. FSLA for example is written broadly enough that a company officer may be considered an employer and personally liable for FLSA violations, but only liable to pay minimum wage, not contractual wages and benefits. What mswen's employer did would shield them from any personal liability in California and most every other state. Here's a good review of the relevant case law on this: http://www.latham.com/thoughtLeadership/officers-and-directors-personal-liability-for-wages http://www.latham.com/thoughtLeadership/officers-and-directo... [PDF]
- Spoom 11y ago
  Fair enough. Well, fair enough in that you're probably right; it doesn't seem fair on an individual basis. I would still have consulted a lawyer in the case mentioned.
- greenyoda 11y ago
  But if you retroactively reduce someone's salary to minimum wage, don't they cease to be "exempt" employees, at which point they're retroactively entitled to overtime pay? The Department of Labor says: "Exempt computer employees may be paid at least $455 on a salary basis or on an hourly basis at a rate not less than $27.63 an hour."[1] So the minimum salary to be exempt from overtime is a lot higher than the federal minimum wage. [1] http://www.dol.gov/whd/regs/compliance/fairpay/fs17g_salary.htm http://www.dol.gov/whd/regs/compliance/fairpay/fs17g_salary....
  - deleted 11y ago
    [deleted]

by Spoom 11y ago

dangrossman 11y ago

Actually, so long as you pay minimum wage before folding, there is virtually no chance a state or federal court would pierce the corporate veil and impose personal liability. This has been upheld in both California's supreme court and federal courts. FSLA for example is written broadly enough that a company officer may be considered an employer and personally liable for FLSA violations, but only liable to pay minimum wage, not contractual wages and benefits. What mswen's employer did would shield them from any personal liability in California and most every other state. Here's a good review of the relevant case law on this: http://www.latham.com/thoughtLeadership/officers-and-directors-personal-liability-for-wages http://www.latham.com/thoughtLeadership/officers-and-directo... [PDF]

Spoom 11y ago
Fair enough. Well, fair enough in that you're probably right; it doesn't seem fair on an individual basis. I would still have consulted a lawyer in the case mentioned.
greenyoda 11y ago
But if you retroactively reduce someone's salary to minimum wage, don't they cease to be "exempt" employees, at which point they're retroactively entitled to overtime pay? The Department of Labor says: "Exempt computer employees may be paid at least $455 on a salary basis or on an hourly basis at a rate not less than $27.63 an hour."[1] So the minimum salary to be exempt from overtime is a lot higher than the federal minimum wage. [1] http://www.dol.gov/whd/regs/compliance/fairpay/fs17g_salary.htm http://www.dol.gov/whd/regs/compliance/fairpay/fs17g_salary....
- deleted 11y ago
  [deleted]