Could you be personally liable for Unpaid Wages?

Unthinkable? Maybe not!

Earlier this month, the Washington Supreme Court held an employer’s CEO and CFO personally liable for willfully failing to pay wages due employees. For those of us, who don’t live, work or operate a business in the State of Washington, why do we care what the Washington Supreme Court decided?

Under Washington state law, “any employer and officer, vice principal, or agent of any employer” who willfully and with the intent to deprive an employee of any part of his wages actually does withhold wages is liable for twice the amount of wages withheld, and the employee’s attorney’s fees and court costs.

The determined that the statute imposes personal liability both on the employer and its officers so as to include those individuals who make the type of financial decision that cause the failure of paying the wages, along with the business, responsible for the violation of the wage laws.

The language of both the Kansas and Missouri Wage Payment statutes has similar language to the Washington Statute. Would Kansas or Missouri Courts make the same decision? Do you want to take the chance? In these economic times which cause business to be “between a rock and a hard place” with cash flow, making sure that you do not run afoul of wage payment laws is critical.

In dissolution of the business or even bankruptcy, when the business may no longer exist, you could still be liable if the courts were to follow the thinking and interpretation of the Washington Supreme Court in applying similarly worded statutes in Missouri or Kansas.

G & J Consultants provides HR and legal consulting to businesses on compliance and best practices in human resources and employee relations. For more information contact: Glenn Brown, J.D. Managing Consultant at glennb@GJCounsultants.com.

The information contained herein, is provide for information only and should not be considered legal advice. Seek appropriate advice and counsel from competent counsel.