Rights of Workers During A Layoff At What Point The Employer File For Bankruptcy

Millions of people face the possibility of losing their jobs and slipping into deep poverty due to unheard-before mass layoffs and furloughs. Therefore, when a department store chain with thousands of workers in Charlotte announces it will file for bankruptcy, employees and creditors may feel a little uneasy. Make sure you contact Charlotte employment discrimination lawyers to get help with your lawsuit.

How to take action to protect yourself if you are fired during a company’s bankruptcy

  • Find out what kind of bankruptcy was filed.

Any employee who receives notice of a corporation’s plan to file for bankruptcy should inquire as a threshold matter as to what sort of bankruptcy the company filed. Determining the choices that may be accessible to an employee who wants to defend their claims against their company depends on the answer to this question.

  •  Verify if you received an appropriate notice.

Employees are protected under the Workers Adjustment and Retraining Notification (WARN) Act, which mandates that companies employing 100 or more workers must give at least 60 calendar days’ notice in writing before shutting a facility or laying off a large number of workers from a single location. Both Chapter 7 and Chapter 11 bankruptcy filings are covered under the WARN Act.

  •  Calculate the wages and benefits you are due.

All earnings include hourly pay, salary, commissions, vacation money, severance compensation, and sick leave. While the Department of Labor (both state and federal) regulates typical wage claims, claims for wages due to bankruptcy are not covered by federal or state laws that protect workers’ rights to wages unless the employer willfully failed to reimburse wages owed and filed for bankruptcy in an effort to avoid paying wages. The U.S. Bankruptcy Code governs claims for unpaid wages resulting from corporate bankruptcy, and the U.S. Bankruptcy Court has authority over such cases.

  • Submit proof of claim

The employee should file for unemployment if wages are unpaid in a bankruptcy scenario. The next crucial step is protecting the employee’s claim by submitting a “Proof of Claim” form for any unpaid earnings, salaries, commissions, vacation money, sick pay, severance pay, or other benefits.

This one-page form is normally available online and can be submitted either to the claims agent for the business or to the bankruptcy court where the case is currently being heard. This document is crucial because it guarantees that a former employee who has since become a creditor would be qualified to receive any distributions granted to creditors in accordance with the conditions of the company’s bankruptcy plan.