Former employer owes me back pay; company has since been bought & original owner dead

[WAZ]

So in May I put in my 2 weeks notice with my former employers and left to take a new job. They were going downhill and had already fallen behind 2 pay periods (I was a month behind on my paychecks when I left). They did pay those to me eventually, but they still owe me for 9 days -- 72 hours -- of unpaid/unused vacation I had accrued. Another former employee who left is also owed 4 more worked days and 6 more vacation days... and several employees who still work there are owed a whopping 25 days of pay. A full month -- 2 1/2 pay periods -- with no compensation.

Now the company was bought out in August, and the possibility of the new owners absorbing and paying out all those past-due paychecks was never discussed. The new owners were told in passing about some past-due checks, but that was it. It was never put in writing or passed on to them when they bought the rest of the company.

My understanding is the former owners would be responsible for the back pay -- but *plot twist* -- the former owner died a few months ago, before the sale of the company was complete. There were two other co-owners listed as shareholders on the Federal level, but the man who died is the only one listed on the State level.

Do we have any recourse here? Who is responsible for paying us? My former boss says the total to get everyone caught up on pay (current and former employees) is about $40,000. So the dead guy's estate -- which is kind of a dick move to go after the widow -- but what are our options? The other two former co-owners who had sort of washed their hands of the company by then? We can file a normal wages claim with the Dept of Labor, but if there's no living former owner to go after, will it do any good? Any advice anyone has would be great.

 

[Crusty]

Doesn't matter who owns the company, the company owes you money. It's not up to you to figure out how they should get the money.

You should assume the new owners acquired all debt and obligations when they bought the company.

 

[MrColin]

Doesn't matter who owns the company, the company owes you money. It's not up to you to figure out how they should get the money.

You should assume the new owners acquired all debt and obligations when they bought the company.

Maybe, if they formed a new corporation they might try the "that was the old company, we are different company now" maneuver. I say if you can't get it settled with a single phone call you should get in touch with the other former employees and get a lawyer. Don't worry about the widow unless you really feel like giving her that money.

 

[SandEagle]

how much do they owe you?

 

[wirednuts]

mine old company still owes me $200. not even worth me going after it. im so glad i never have to talk to them again.

 

[D1gger]

Way too many details unknown to determine who might owe the backpay. When the 1st owner(s) sold, did they sell the shares of the company, or just the assets? If they sold the assets, the new company would not acquire any of the liablity, that would be with the old company.

Did the two other co-owners retain any rights as directors of the company before or after it was sold? If so, they might be liable.

In addition, the actual purchase agreement for the company could spell out in very clear language who is responsible for past liablities. I sold one of my companies via a share sale a couple of years ago, and it was made extremely clear in the agreement for sale that I retained liablity if any past employment claims came up.

 

[sixone]

Contact the Department of Labor office, in your state. Get as many of the other employees to contact them, as well. They'll do all the investigation, and get the employer to pay.

It's going to take longer than a lawyer, probably. The more employees complain, the more of a priority they'll consider it. But if it saves you those lawyer fees, it might be well worth it.

 

[djnsmith7]

Contact the Department of Labor office, in your state. Get as many of the other employees to contact them, as well. They'll do all the investigation, and get the employer to pay.

It's going to take longer than a lawyer, probably. The more employees complain, the more of a priority they'll consider it. But if it saves you those lawyer fees, it might be well worth it.

^This.

 

[EagleKeeper]

Vacation pay is a benefit; not an obligation/right.

Do not expect to collect the vacation pay that was not paid.

Learned this the hard way.

 

[WAZ]

Maybe, if they formed a new corporation they might try the "that was the old company, we are different company now" maneuver.

This is exactly what happened. It's not just new owners, it's a "new company" that purchased/absorbed the agreed-upon assets (not including the "old" company's back-pay).

how much do they owe you?

About $1,300. If it was only a couple hundred I'd probably let it go, but it's enough for a mortgage payment.

Way too many details unknown to determine who might owe the backpay. When the 1st owner(s) sold, did they sell the shares of the company, or just the assets? If they sold the assets, the new company would not acquire any of the liablity, that would be with the old company.

Did the two other co-owners retain any rights as directors of the company before or after it was sold? If so, they might be liable.

In addition, the actual purchase agreement for the company could spell out in very clear language who is responsible for past liablities. I sold one of my companies via a share sale a couple of years ago, and it was made extremely clear in the agreement for sale that I retained liablity if any past employment claims came up.

Thanks for these; I will definitely find out.

Contact the Department of Labor office, in your state. Get as many of the other employees to contact them, as well. They'll do all the investigation, and get the employer to pay.

It's going to take longer than a lawyer, probably. The more employees complain, the more of a priority they'll consider it. But if it saves you those lawyer fees, it might be well worth it.

Yeah, that's what we're looking into now.

Vacation pay is a benefit; not an obligation/right. Do not expect to collect the vacation pay that was not paid. Learned this the hard way.

My understanding is this varies by state? Not sure what the law is for Indiana; I'll have to find out.

I know it doesn't matter legally, but my old bosses (who I had/have a good relationship with) WANTED to pay me for the 9 days.. said all along they planned on it after my regular back-pay... but as they fell further and further behind their own paychecks for the people still there, it never happened before the "new company" was formed. And now they say they still WANT to but there's nothing they can do about it. They're not being jerks and saying they won't pay me; they're saying because of the "new company" they can't pay me.

 

[josh0099]

Vacation pay is a benefit; not an obligation/right.

Do not expect to collect the vacation pay that was not paid.

Learned this the hard way.

Earned vacation time gets paid out... Some companies may let you use your vacation time before earned aka they say you have or full 2 weeks at the start of the year but in reality if you leave 6 months into the year you have actually only earned 1 week therefore that is what eligible for payment. Things like personal days and sick days are the benefits that don't get paid out.

 

[trmiv]

Vacation pay is a benefit; not an obligation/right.

Do not expect to collect the vacation pay that was not paid.

Learned this the hard way.

Depends on the state. In California for example, vacation is earned as you work, so they owe it to you just like any other wages.

EDIT: or what the poster above as I was mucking around not pressing the submit button.

 

[Vdubchaos]

Small claims court

 

[BoomerD]

Vacation pay is a benefit; not an obligation/right.

Do not expect to collect the vacation pay that was not paid.

Learned this the hard way.

Actually, that depends on state law. In California, vacation pay is considered "regular wages" and must be paid. IF a company offers vacation pay, they're legally required to pay any due on termination of employment.
In states only covered by the US Wage and Hour laws, that's not the case.

 

[MotionMan]

About $1,300. If it was only a couple hundred I'd probably let it go, but it's enough for a mortgage payment.

Small claims court

Assuming you can document it (small claims is all about the documents), this would probably be the best course of action if they refuse to pay you.

MotionMan

 

[Phokus]

New owners bought the liabilities that come with the company as well, not like it went through bankrpucy, right (and even then, i'd think they'd still have to pay you).

 

[MotionMan]

New owners bought the liabilities that come with the company as well, not like it went through bankrpucy, right (and even then, i'd think they'd still have to pay you).

Likely, but not for sure. It depends on the language of the purchase contract (a few of which I have written, including some with a clause leaving the liabilities with the prior owners).

MotionMan