My Employer Owes Me Wages But Went Out of Business. What Do I Do?

Finding out that you have lost your job is devastating enough, but if your employer still owes you wages and goes out of business, it can be even worse. It may seem like filing a wage claim is a lost cause, and in some cases, it is. However, you may be able to recover your unpaid wages if you act quickly.

But, depending on where you work and what type of company it is, there are a few options available. It is worth your while to find out your legal options to pursue your unpaid wages.

What to do if Your Employer Owes You Wages

Never assume that there is nothing to be done. You can find free advice to find out what you should do next.

Talk to a Lawyer

There are plenty of employment lawyers who will discuss your potential case for free as an initial consultation. Otherwise, you can pay an employment lawyer a one-time consultant fee which should not be too much and can be well worth the price.

It will depend on what type of company it is and how much money your employer owes you. An employment lawyer will be able to advise you further and help you decide which steps you should take next.

Take Action

If you are not owed very much money, it can be difficult to invest in suing for the remaining wages that you are owed. But, you can claim more than just the wages you are owed.

If it is not much money, you can go to small claims court and hope to recover at least some of the money you are owed. Include all interest and applicable penalties on any unpaid wages.

While legally you are certainly entitled to the money, whether you can actually retrieve it is something else. If it is a larger corporation, you may be able to file a claim before they file for bankruptcy.

A smaller company that is not a corporation or LLC may have a few assets from liquidation. But, it is important that you file right away, in case they also file for bankruptcy, and then you will likely not see very much money if anything at all.

Act Quickly

The sooner you file a claim on your employer who owes you wages, the better your chances are of retrieving even a small amount of money. Talk to others at the company, if there are any, to get them to join in the suit.

Acting quickly lets everyone involved know that there are outstanding debts. If there are any assets in the company, like stock, product, equipment, or the building, then these may be sold to satisfy.

You may get a bit of money once all the assets are liquidated. These funds will go to everyone to whom the company owes money. You may not get all your money that is owed, but you might get some.

File a Claim with the Labor Board

Filing a claim with the federal and/or state Department of Labor can also work to your benefit. This alerts them to the fact that your employer owes you wages, and they may be able to access any monies they get from the sale of the business and its assets.