Top 5 Issues For Employers If Their Bank Suddenly Fails

By: Esra A. Hudson | Richard G.J. McDerby | Lauren Chee
– Law360

Manatt Partners Esra Hudson and Richard McDerby and Associate Lauren Chee co-authored an article for Law360 on how employers can most effectively manage their employment practices when navigating the ripple effects of a sudden bank failure.  

When the unexpected closure of a company’s bank occurs, it is important for employers to ensure they exhaust all means necessary to fulfill their payroll duties in order to avoid liability, the authors wrote. It is essential for employers to be deliberate in complying with the various laws designed to protect their employees, be prepared to enact contingency plans, and communicate clearly with employees about the situation and good faith efforts to remedy potential late payments.  

The authors provided a summary of key considerations for employers that are faced with this predicament, including:  

  • Prioritizing payroll to avoid substantial penalties 
  • Ensuring decision makers may have personal liability for failing to pay wages 
  • Complying with tax obligations 
  • Carefully considering the implications of employee furloughs and layoffs 
  • Making contingency plans to avoid shortfalls

Law360 subscribers can read the complete article here



pursuant to New York DR 2-101(f)

© 2024 Manatt, Phelps & Phillips, LLP.

All rights reserved