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Will I get into trouble for withholding final paychecks from soon-to-be-former employees?

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in Firing,Human Resources

Q. We’re closing our doors and firing all of our employees. As president, I am considering not paying my employees their final paychecks, even though they have earned that pay. Is this a risk?

A. Yes. The North Carolina Wage and Hour Act requires employers to pay earned wages when they are due. An employer that violates this provision may be sued under the act, which carries with it the prospect of liquidated (read: double) damages and an award to cover attorneys’ fees incurred in prosecuting the lawsuit.

“Employer” is defined by the act to include “any person acting directly or indirectly in the interest of an employer in relation to an employee.” This language is likely broad enough to include you as the company president. You could be personally liable for wage payments if your business fails to make the payment.

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