What options are available to me if my employer is unable to pay me?

I am an assistant manager at a small, independent pizzeria that has roughly about 10 employees. Very recently, things have been happening that make me concerned that the owner is running out of capital to keep the store running. Up until last week, the majority of his employees had direct deposit, last week the option was dropped 4 days before pay day, the

rumor being that he didn’t have enough in his payroll account to cover the withdrawal the payroll company makes to cover the direct deposit. Subsequently we all received paper checks that Friday. While most of us were able to cash them with no issues, one of my

co-workers had the check bounce on them. This leads me to my question, what recourse do I have if I come across a situation where my employer is no longer able to pay me?

Asked on May 18, 2016 under Employment Labor Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

If your employer doesn't have the money to pay you, there may be little you can do: while you legally have to be paid, of course, the law doesn't make money appear where there is none. If the employer is an LLC or corporation, only the LLC or corporation would be liable for your pay, so if the business runs out of money, or goes out of business, there is no else to get the money from.
If the employer is not an LLC or corporation, though--for example, it is a  sole proprietorship--then you could sue the owner(s) personally for the money; that means that even if the business has no money, if the owner still has money, you could potentially, in a lawsuit, get it from him.


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