Wage claim on a suspended LLC and owner with closed business

[qwert212]

What is the name of your state? California

There is a wage claim from a former employee who was working as a technician, but the store closed a few months back. The defendant is "the LLC ; 'myself', an individual". I can answer the complaint on file with an "Agree" or "Denies" however, since the LLC is suspended, it states that I cannot provide any proof or evidence and will be treated as "failed to appear".

They want an answer within 6 days from today, but I am at a loss on how to proceed. I am gathering any evidence I have but I'm afraid the bank won't send the checks on time. The plaintiff claims that he was paid below minimum wage (**he was payed above min wage) and has unpaid overtime, then there is the liquidated damages and waiting time penalties.

Is this claim just for the LLC or is the Plaintiff also suing me, as an individual?
How does the Hearing officer treat the LLC since it is suspended by the California Secretary of State?
Would unsupending (paying the fee), denying the claim, and sending whatever documents I can find backfire?

Any advice is welcome, thank you

 

[adjusterjack]

Is this a lawsuit in court or is it a wage claim through the state's Department of Labor?

If it's a lawsuit and you have accurately described the defendant's as:

"the LLC ; 'myself', an individual".

Then, yes, you are being sued as an individual along with your LLC. I'll digress for a moment and point out that the LLC doesn't protect you from your own acts of wrongdoing. If there is a judgment you'll be paying it personally.

I am at a loss on how to proceed.

Then you would be wise to consult an attorney as we are not allowed to give step by step legal advice.

 

[LdiJ]

One bit of information that you should be aware of, is that you ARE able to represent yourself as an individual in court (and present evidence) but you cannot represent the LLC, only an attorney can represent the LLC.

However, one way or another you are likely personally responsible for not paying his due wages. If he is really due the wages and if you have the money you would likely be better off settling.

 

[qwert212]

One bit of information that you should be aware of, is that you ARE able to represent yourself as an individual in court (and present evidence) but you cannot represent the LLC, only an attorney can represent the LLC.

However, one way or another you are likely personally responsible for not paying his due wages. If he is really due the wages and if you have the money you would likely be better off settling.

Thank you, he was payed what he was due according to the hours he clocked in. We also payed taxes on the amount we payed him and I would have assumed the state would see that he was payed exactly what was owed.

 

[qwert212]

Is this a lawsuit in court or is it a wage claim through the state's Department of Labor?

If it's a lawsuit and you have accurately described the defendant's as:



Then, yes, you are being sued as an individual along with your LLC. I'll digress for a moment and point out that the LLC doesn't protect you from your own acts of wrongdoing. If there is a judgment you'll be paying it personally.



Then you would be wise to consult an attorney as we are not allowed to give step by step legal advice.

Thank you, the employee was payed what he was due but he claimed he was payed under min wage ($7.50 an hour) when he was payed above ($12 an hour). And yes, it is a wage claim. How could an individual defend themselves if everything is under the LLC?

 

[LdiJ]

Thank you, the employee was payed what he was due but he claimed he was payed under min wage ($7.50 an hour) when he was payed above ($12 an hour). And yes, it is a wage claim. How could an individual defend themselves if everything is under the LLC?

He included you as an individual in the suit, not just the LLC. You, as an individual, are free to use the LLC documentation to prove whatever you need to prove.

 

[qwert212]

Is it best to un-suspend the LLC and answer the complaint or just answer as an individual? From what I read if the business is an LLC then the person behind the LLC could not be sued unless they "pierce the corporate veil".

 

[LdiJ]

Is it best to un-suspend the LLC and answer the complaint or just answer as an individual? From what I read if the business is an LLC then the person behind the LLC could not be sued unless they "pierce the corporate veil".

When it comes to a wage claim the person responsible for paying the wages is also held responsible. You are not going to get out of defending yourself on this one.

 

[Litigator22]

Thank you, he was payed what he was due according to the hours he clocked in. We also payed taxes on the amount we payed him and I would have assumed the state would see that he was payed exactly what was owed.

 

[Litigator22]

Is it best to un-suspend [sic]the LLC and answer the complaint or just answer as an individual? From what I read if the business is an LLC then the person behind the LLC could not be sued unless they "pierce the corporate veil".

To begin the pending proceedings are not that of a private civil lawsuit, but rather a Division of Labor Standards Enforcement wage claim filed pursuant to Section 98 of California's Labor Code. Also known as a "Berman Hearing". (Your reference to a "Hearing officer" as presiding marks the distinction between judicial and administrative. )

Secondly, your potential personal liability to the claimant DOES NOT rest on whether or not the claimant is able to "pierce the corporate veil"! That is, prove that the LLC is simply a front, a name only; merely an alter ego under which your personal business activities are (or were) conducted.

HOWEVER, please take note of California's "The Fair Day’s Pay Act" which provides that some individuals—described as owners, directors, officers or managing agents can be held personally liable as the employer for certain wage and hour Labor Code violations. (See: Cal. Labor Code § 558.1. )

You should also take heed of the severe penalties and sanctions that can be imposed for violations of California' wage and hour standards.

Obviously no one here can speak of the merits of the employee's claim. However, there is a preliminary screening process in which such claims are previewed before being assigned to a deputy commissioner or hearing officer. The fact that the employee's claim has survived that pre-hearing stage would seem to warrant serious attention.

Anyway, I strongly suggest that you consult with a California labor lawyer. Even though the Code directs that such hearings are to be "conducted in an informal setting" and the rules of evidence do not apply, AND the results can be appealed to Superior Court for a trial de novo, those results can have significant financial consequences.

Lastly, the current "good standing" status of the LLC is of no significance. Not per se.

 

[Zigner]

And yes, it is a wage claim.

Why did you post this in the "Small Claims" sub-forum?