Human Resources/Wage Claim


QUESTION: I have been working for a gym (small business LLC) since May and our sales are not making the costs of they gym. I have had three payroll checks come back with insufficient funds. I have been able to obtain money from two of them. This last payroll period almost all the employees checks bounced, many have quite. I however, am still working for the company not knowing exactly what to do. If I stay with them does that guarantee my pay? I have filed a wage claim with the Department of Labor Standards Enforcement, I showed up to the court meeting, but no one representing the business did. I have seen multiple letters for rent, utilities, electrical, etc. bills being past due for several months with late fees. If they file bankruptcy do I still have rights to get paid? What actions do you think I should take?
Thank you

ANSWER: Personally I think you should quit and file for unemployment because it is no fault of your own you are unemployed as the company did not have the funds to pay you and you cannot for for free.

The money you are already owed can be obtained through the Department of Labor, however, if bankruptcy is filed you may not see any money at all.


---------- FOLLOW-UP ----------

QUESTION: How does filing bankruptcy take the rights away from paying employees?

Bankruptcy is when a company has no money. If there is no money to pay there is no money to pay.

What happens is all creditors get on a list for payment. The money that is there, if any, trickles down to all creditors and they get a percentage of the available funds.

In California preference is given to the employees, however, if there is not enough to pay all the wages the employees will get a percentage of their wages.

Here is a website which explains what happens to wages if a company goes bankrupt in California.


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Shirley McAllister, CPP, PHR


I can answer questions pertaining to Compensation, Health Benefits, Retirement Plans, Payroll,Payroll taxes, Employee selection, Employee Termination, Training, and Employee Incentives. I have offices in U.S., Canada, UK, South Africa,Australia and NZ. I am most confident in the U.S. and Canadian but have knowledge of the internationals. I do not have extensive knowledge of South Africa, Australia and New Zealand. I do have some Human Resource Knowledge in those areas. Please do not ask me homework questions, I do not have time to answer them.


I currently hold both the U.S. and Canadian Payroll Certifications. I currently hold the SHRM PHR certification. I have worked in the Human Resources area with high emphasis on compensation and benefits for 25 years at the same company. My company is an international company and I work with our International offices whenever there is a Human Resource area needing addressed. I volunteer on the American Payroll Association hotline and have for the last 10 years or so. I answer many questions each week for other payroll and HR professionals, mostly on taxes, benefits and compensation issues. I have been the trustee for our 401K plan for Retirement benefits and our 125 Cafeteria Plan for Health Insurance benefits.

SHRM, National APA, National DOLEA, State National Mentoring Network I.O.M.A. Advisory Board


Boise State University Human Resource Certificate Program PHR through SHRM CPP through American Payroll Association Payroll Administrator and Payroll Supervisor certification through Canadian Payroll Association Published writer of Payroll and Benefit articles in a payroll Publication 25 years experience in an International Company

Awards and Honors
Citation of Merit 8 years in a row for hotline service for A.P.A. Honor Award for child mentoring service through RSVP and National Mentoring A "Pat on the Back" award for outstanding leadership as a Youth Group Leader by "The Salvation Army." Runner up for Employee of the Year at my Company twice and Employee of the month 4 times.

Past/Present Clients
I used to answer questions on when they had a similar quesition and answer section. I volunteer for APA hotline I also belong to several HR forums when I often answer questions

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