Small Business Owner Personally Liable for Unpaid Wages

In a striking example of failing to follow the ten rules in the post below, an Alexandria federal judge held the owner of a small flooring contractor personally liable for almost $90,000 in unpaid wages and overtime.

In Jin v. Any Floors, Inc., the court held that the sole owner of the now-defunct corporation exercised enough control over the finances such that the business’s failure to pay the employee his regular wages and overtime was functionally

the same as the owner’s personal failures to write the checks. As a result, the court held the sole shareholder personally liable for $86,450 in unpaid wages and overtime. The judge was partially persuaded by the employee’s “meticulous” time records he kept himself; the employer kept none of its own.

The blurry line between a small business and its sole owner is a dangerous trap, so small business owners have to be especially careful in tracking and appropriately paying employees for all hours they work.

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