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State: California

I resigned from a company that could not make payroll.
They owe me a month back pay as well as 60+ hours of accrued vacation. It is all on the books...so I have been told.

If they file ch 11, what is the order that they are expected to pat their debts in CA? I have heard that employees are first, and mandatory, on the list of creditors. Currently they are almost virtual and the owners are not collecting a check and nothing is getting paid.

I know that they have 72 hours from the time of my resignation to cut me a check. It is way past that time so I am wondering what interest am I entitled to? I have heard that I am possibly entitled to 3X the outstanding amount.

How should I proceed in pushing the issue. IE write company, their legal council, etc.

Thanks in advance



Chapter 11 and wages

Following is the California law applicable to your situation. I am not sure how this works under the bankruptcy laws, but to enforce your rights, you should ask the company and its legal counsel for payment, also put in a claim in the bankruptcy proceeding. Wages have third priority, after administrative expenses of the bankruptcy and some debts incurred after the commencement of the proceedings.

California Labor Code Sec 202. If an employee not having a written contract for a definite period quits his or her employment, his or her wages shall become due and payable not later than 72 hours thereafter, unless the employee has given 72 hours previous notice of his or her intention to quit, in which case the employee is entitled to his or her wages at the time of quitting. Notwithstanding any other provision of law, an employee who quits without providing a 72-hour notice shall be
entitled to receive payment by mail if he or she so requests and designates a mailing address. The date of the mailing shall constitute the date of payment for purposes of the requirement to provide payment within 72 hours of the notice of quitting.

California Labor Code Sec 203. If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.5, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days. An employee who secretes or absents himself or herself to avoid payment to him or her, or who refuses to receive the payment when fully tendered to him or her, including any penalty then accrued under this section, is not entitled to any benefit under this section for the time during which he or she so avoids payment.

Suit may be filed for these penalties at any time before the expiration of the statute of limitations on an action for the wages from which the penalties arise.


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