Company missed payroll.

What can I do to collect wages owed to me? Last week the President of our firm, in a conference call two days before pay day, told all salaried employees of our firm that he was not going to pay us for the last two week pay period. Further he said that there would be no payment of salary going forward until more money came into the firm. He also gave people the option to continue working for the company without salary until some future date when he felt comfortable resuming salaries.

1 answer  |  asked Apr 25, 2001 11:15 AM [EST]  |  applies to Ohio

Answers (1)

Richard Renner
Wage claim options

The federal minimum wage law requires most employers to pay at least the federal minimum wage on or before the regular pay day. However, the federal law only applies to those employers who are engaged interstate commerce or are public agencies. You may have been engaged in interstate commerce if the enterprise for which you worked shipped or received goods across the state lines, or your employer has gross annual receipts of at least $250,000. If your employer is covered by the federal minimum wage law, then the employer must pay you at least the federal minimum wage for each hour of your employment, and time and a half for each hour over 40 in a regular work week. Just like with advertisements, some exceptions apply. If a covered employer fails to pay these minimum wages and overtime compensation on or before the regular pay day, you have a right to sue the employer not only for the unpaid minimum wages and overtime compensation, but an additional equal amount as liquidated dames. The law also provides that successful workers can recover their reasonable attorney fees, too.

If the employer is covered by the federal minimum wage law, then the U.S. Department of Labor has the authority to investigate complaints of any violations. You can use the enclosed Employment Information Form to complain to the Department at 200 North High Street, Room 646, Columbus, Ohio 43215. If you do not know whether or not this employer is covered by the federal law, filing this complaint may be helpful because the Department of Labor could investigate to decide whether or not this employer is covered.

Even if this employer is not covered by the federal minimum wage law, the employer should be covered by the Ohio State minimum wage of $4.25 per hour.

In addition, Ohio has a statute requiring employers to pay wages at least twice each month. It is called Revised Code Section (R.C.) 4113.15. It's text is below. If an employer fails to pay wages when due, and if the employer does not have a valid dispute about the wages, you can sue the employer for an additional $200.00 if you send the employer a certified letter demanding payment of wages, and the employer fails to pay the wages within thirty days (30) of receiving the letter. The law is very specific in requiring certified mail, and you can ask any post office for help. Certainly, you should keep a copy of your letter, and any other papers that relate to your case.

You should know that all legal claims have time limits. For FLSA claims, the time limit is normally two years. If the court finds that the violation was willful, the time limit is three years. For the wage claim under Ohio law, the time limit is two years. R.C. 2305.11(A).
For breach of an oral contract in Ohio, the time limit to sue is six years from the date of the breach. More information about the FLSA, and similar federal laws, is available at http://www.dol.gov/dol/esa/public/whd_org.htm
http://www.nela.org/nela/nelalinks.html

Once the employer breaches an agreement about payment of past due wages, you can quit with good cause and claim unemployment benefits.

If the company goes bankrupt, wages due within the last 90 days get priority over some other obligations (but not over taxes due and attorney fees). To use this "priority," the workers may need to file a "proof of claim" within the time limit specified in the notice of bankruptcy.

If the employer itself is out of money, the FLSA allows you to collect from any person who acted on behalf of the employer in relation to its employees. You can sue your supervisor, personally, or the company's payroll officer, anyone who signed the paychecks, or the president of the company. I have even sued the board members of a non-profit organization that failed to lay off the staff when they ran out of money. Here are citations to cases holding that individuals who acted on behalf of the employer were liable to the workers for their wages. Dole v. Elliott Travel & Tours, Inc., 942 F.2d 962 (6th Cir. 1991); Donovan v. Sabine Irrigation Co., Inc., 695 F.2d 190 (5th Cir. 1983); Donovan v. Agnew, 712 F.2d 1509, 1511 (1st Cir. 1983); Brock v. VAFLA Corp., 668 F.Supp. 1516 (M.D.Fla. 1987); Donovan v. Grim Hotel, 747 F.2d 966, 971 (5th Cir. 1984); Donovan v. Maxim Industries, Inc., 552 F.Supp. 1024 (1982). Sure makes you think about whether you want to be a supervisor for a financially shaky company.

R.C. 4113.15 can be found at:
http://onlinedocs.andersonpublishing.com/revisedcode/home3.cfm?GRDescription1=revised%20code&GRDescription2=title%2041&GRDescription3=&TextField=%3CJD%3A%224113%22%3ECHAPTER%204113%3A%20MISCELLANEOUS%20LABOR%20PROVISIONS&GRStructure1=4113&GRStructure2=

4113.15 Semimonthly payment of wages.

(A) Every individual, firm, partnership, association, or corporation doing business in this state shall, on or before the first day of each month, pay all its employees the wages earned by them during the first half of the preceding month ending with the fifteenth day thereof, and shall, on or before the fifteenth day of each month, pay such employees the wages earned by them during the last half of the preceding calendar month. If at any time of payment an employee is absent from his regular place of labor and does not receive his wages through an authorized representative, such person shall be entitled to said payment at any time thereafter upon demand upon the proper paymaster at the place where such wages are usually paid and where such pay is due. This section does not prohibit the daily or weekly payment of wages, the use of a longer time lapse that is customary to a given trade, profession or occupation, or establishment of a different time lapse by written contract or by operation of law.

(B) Where wages remain unpaid for thirty days beyond the regularly scheduled payday or, in the case where no regularly scheduled payday is applicable, for sixty days beyond the filing by the employee of a claim or for sixty days beyond the date of the agreement, award, or other act making wages payable and no contest court order or dispute of any wage claim including the assertion of a counterclaim exists accounting for nonpayment, the employer, in addition, as liquidated damages, is liable to the employee in an amount equal to six per cent of the amount of the claim still unpaid and not in contest or disputed or two hundred dollars, whichever is greater.

(C) In the absence of a contest, court order or dispute, an employer who is party to an agreement to pay or provide fringe benefits to an employee or to make any employee authorized deduction becomes a trustee of any funds required by such agreement to be paid to any person, organization, or governmental agency from the time that the duty to make such payment arises. No person shall, without reasonable justification or excuse for such failure, knowingly fail or refuse to pay to the appropriate person, organization, or governmental agency the amount necessary to provide the benefits or accomplish the purpose of any employee authorized deduction, within thirty days after the close of the pay period during which the employee earned or had deducted the amount of money necessary to pay for the fringe benefit or make any employee authorized deduction. A failure or refusal to pay, regardless of the number of employee pay accounts involved, constitutes one offense for the first delinquency of thirty days and a separate offense for each successive delinquency of thirty days.

(D) As used in this section:

(1) "Wage" means the net amount of money payable to an employee, including any guaranteed pay or reimbursement for expenses, less any federal, state, or local taxes withheld; any deductions made pursuant to a written agreement for the purpose of providing the employee with any fringe benefits; and any employee authorized deduction.

(2) "Fringe benefits" includes but is not limited to health, welfare, or retirement benefits, whether paid for entirely by the employee or on the basis of a joint employer-employee contribution, or vacation, separation, or holiday pay.

(3) "Employee authorized deduction" includes but is not limited to deductions for the purpose of: (a) purchase of United States savings bonds or corporate stocks or bonds, (b) a charitable contribution, (c) credit union savings or other regular savings program, or (d) repayment of a loan or other obligation.
HISTORY: GC 12946-1; 103 v 154; Bureau of Code Revision, 10-1-53; 135 v H 581. Eff 1-1-74.

posted by Richard Renner  |  Apr 25, 2001 6:58 PM [EST]

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