Unpaid wages as a shareholder

[notmyday]

Hello, I have a long complicated story that I will try and summarize as best as I can. I was employed by a company in Ca since May 2016. I was given ownership of 3% ownership in shares of this S Corp I worked for. In Dec of 2016 the employer started falling behind on my salary, I quit in June 2017. I have many text messages from the owner saying he owes me money and that he will pay me. Those messages degrade to "I'm pissed off I'm not going to pay you anymore". I also have messages from employees asking me for their pay and why their checks bounced (They were asking me because I was head of sales, not because I was a shareholder). I also have w-2's and a few emails showing my roles as head of sales, although I have been locked out of my company email. Today I attended a Labor Board Conference in an attempt to come to a settlement with my x employer. He brought up that I was an owner of the company and that it was not possible for me to claim un-paid wages from my own company. I am embarrassed to say that I had completely forgotten that he had given me that 3%. Then he showed the labor board a document where I filed the fictitious business name and signed as president, The only reason I did this is that the county required an officer of the company to sign so I just put down PRES. Upon hearing that I was a shareholder of the company the Labor board representative immediately suggested we move on to a hearing with a judge in the next few months. I never received any compensation or earnings from my 3%. And I also looked up the corporation to find out I am not listed as a shareholder as of a few days ago.

Do I have a case to get my unpaid funds?

 

[adjusterjack]

Complicated stories require lawyers.

Get one.

 

[HRZ]

You have a need to get counsel...like now ! ANd pay attention to attorney fee recovery provisions under PAGA in CA for wages.

Employers are required to pay employees... willful failure to pay opens up big problems for employer inc paying your attorney .

Minority shareholders have rights to information as set forth in CA law. ..


SHareholders and officers could be held personally liable for corp failure to pay wages BUT my limited understanding is the employee is still required to be paid . ( Makes no sense that a deminimus amount of stock is a bar to getting paid...that might effectively disenfranchise every employee who gets any form of incentive stocks?? )

A mere engagement letter or a storekit stock certificate does not make you a shareholder ...its when the law says it happens, if it happened...there are exemptions to some requirements for limited share issuance..but the exemptions must be filed first ...and the CA law allows a fix if the step was " forgotten" ..people .forget ..I have no clue if a fix is retroactive . Nor if a shareholder listing filed with state is determinative...but it sure raises questions. And you may be better off NOT to be a shareholder . ..I've issued shares and filed state reports annually been issued shares in PA ...but your rules that count are in CA if that's where your employer is incorporated

Point being you need a skilled legal advocate NOW And the issue of attorney fee recovery tilts the dynamics to seek the best possible advocate for best odds.

 

[commentator]

I'm puzzled about why a "labor board" would be the entity you were working with, not Wage and Hour. But then, I agree, if its this complex and your employer came up with this and it was accepted as a valid argument by whomever you are presenting this case to, you need an attorney.

 

[notmyday]

I'm puzzled about why a "labor board" would be the entity you were working with, not Wage and Hour. But then, I agree, if its this complex and your employer came up with this and it was accepted as a valid argument by whomever you are presenting this case to, you need an attorney.

I not sure what you mean by Wage and hour but Labor/employer/employee disputes are handled by the labor board in CA.

 

[notmyday]

You have a need to get counsel...like now ! ANd pay attention to attorney fee recovery provisions under PAGA in CA for wages.

Employers are required to pay employees... willful failure to pay opens up big problems for employer inc paying your attorney .

Minority shareholders have rights to information as set forth in CA law. ..


SHareholders and officers could be held personally liable for corp failure to pay wages BUT my limited understanding is the employee is still required to be paid . ( Makes no sense that a deminimus amount of stock is a bar to getting paid...that might effectively disenfranchise every employee who gets any form of incentive stocks?? )

A mere engagement letter or a storekit stock certificate does not make you a shareholder ...its when the law says it happens, if it happened...there are exemptions to some requirements for limited share issuance..but the exemptions must be filed first ...and the CA law allows a fix if the step was " forgotten" ..people .forget ..I have no clue if a fix is retroactive . Nor if a shareholder listing filed with state is determinative...but it sure raises questions. And you may be better off NOT to be a shareholder . ..I've issued shares and filed state reports annually been issued shares in PA ...but your rules that count are in CA if that's where your employer is incorporated

Point being you need a skilled legal advocate NOW And the issue of attorney fee recovery tilts the dynamics to seek the best possible advocate for best odds.

Hello and thank you for your reply. What exactly should I be looking for in the "attorney fee recovery provisions under PAGA in CA for wages.". I am looking for an attorney now by the way.
Thanks Again.

 

[Zigner]

I not sure what you mean by Wage and hour but Labor/employer/employee disputes are handled by the labor board in CA.

No, they are handled by the Division of Labor Standards Enforcement (DLSE)

[SUB]http://www.labor.ca.gov/contactindex.htm[/SUB]

 

[HRZ]

THe CA. Private Attorney General Act is sort of the enabling legislation for private actions to recovery of unpaid wage that includes attorney fee recovery if you prevail.

We have a similar provision here in PA, in different area of law, it's designed to give little guy/ gal a better shot at getting his or her wages if they think they are right.

THe last such action I was involved in, the attorney fees were MUCH larger than the wages not paid out

I found many labor lawyers are really quite specialized . I d want one with a successful track record against closely held corporations for wage matters...or at least one whose learning curve on shareholder issues reb employee is not me.

 

[notmyday]

THe CA. Private Attorney General Act is sort of the enabling legislation for private actions to recovery of unpaid wage that includes attorney fee recovery if you prevail.

We have a similar provision here in PA, in different area of law, it's designed to give little guy/ gal a better shot at getting his or her wages if they think they are right.

THe last such action I was involved in, the attorney fees were MUCH larger than the wages not paid out

I found many labor lawyers are really quite specialized . I d want one with a successful track record against closely held corporations for wage matters...or at least one whose learning curve on shareholder issues reb employee is not me.

Thank you for the advice much appreciated. I will bring this up with my counsel.

 

[justalayman]

A share holder and an employee are two different things. Being one or the other does not preclude one from being the other. Many shareholders are also employees of the company they own shares of. Many officers of a company are issued shares as part of their compensation. Heck, some companies issue stock to even low level employees as partial compensation. That doesn’t mean they aren’t owed their wages.

What’s so odd is the op claimed to be president of the company and had signed the original documents when they company was registered with the state. Something about this situation sounds very odd. Obviously op has been involved in this company since its inception.

I never received any compensation or earnings from my 3%

and? Holding shares of a company does not necessarily mean you will have any “earnings” from such ownership.

And I also looked up the corporation to find out I am not listed as a shareholder as of a few days ago.

where did you attempt to look that up? I don’t know any place you can find a comprehensive listing of all shareholders of a company.


I think op needs an attorney simply because he doesnt seem to know anything about what he’s done over the last several years.

 

[notmyday]

A share holder and an employee are two different things. Being one or the other does not preclude one from being the other. Many shareholders are also employees of the company they own shares of. Many officers of a company are issued shares as part of their compensation. Heck, some companies issue stock to even low level employees as partial compensation. That doesn’t mean they aren’t owed their wages.

What’s so odd is the op claimed to be president of the company and had signed the original documents when they company was registered with the state. Something about this situation sounds very odd. Obviously op has been involved in this company since its inception.

and? Holding shares of a company does not necessarily mean you will have any “earnings” from such ownership.

where did you attempt to look that up? I don’t know any place you can find a comprehensive listing of all shareholders of a company.


I think op needs an attorney simply because he doesnt seem to know anything about what he’s done over the last several years.

Hello Sir, Thank you for your contribution. Your response puts me at ease somewhat. I understand there is some confusion, and I could be more clear, please allow me to try and clear it up. I have been with the company since its inception, in fact I helped the owner submit articles of incorporation. My former employer presented at the labor board conference documents stating that I own 3% of the company. This is accurate, however I am not President of the company. I have sought counsel and attended two meeting with two different attorneys both seem to be unfamiliar with cases having to do with shareholders.