Legal Question in Business Law in California

I work for Company A which has a habit of bouncing its employee paychecks since they write the checks when there's no money to cover them (the company relies on "projections" of money coming in on a certain date which doesn't always materialize). Although Company A does eventually make the checks good, what are the legal ramifications of this?

Company A has outsourced the jobs of the department I work in to Company B. Some of the employees will be retained by Company B to continue their work while the others will be laid off. A co-worker feels that even though some of the employees will be doing their work for Company B and will be Company B's employees, they might face a problem if Company A bounces their payment checks to Company B.

To me, that's between the Company B and Company A and that the paychecks of those picked up by Company B can't be withheld just because Company A didn't pay their monthly bill.

Am I right?


Asked on 2/02/13, 7:01 am

3 Answers from Attorneys

Kelvin Green The Law Office of Kelvin Green

Company A coul face difficuties by bouncing checks an not mking payments on time. As far as the employees at company b.... They work for Company b.....Company b is responible for pay, benefits, taxes etc.... Company B will need to deal with issues when Company A is slow...

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Answered on 2/02/13, 7:38 am
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Each employee needs to be clear on which company is his or her employer, as defined in California's Labor Code. An employee who's "outsourced" from A to B could still be an A employee. If need be, one or more concerned employees may want to make an appointment to discuss the issues of (1) bounced paychecks and (2) who's my employer? with the local office of the California Labor Commissioner. If I recall, issuing paychecks without sufficient funds for them to clear is a misdemeanor under the Labor Code.......I'm on the road, so I can't look up the code section for you.

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Answered on 2/03/13, 2:42 pm
Terry A. Nelson Nelson & Lawless

Employees are entitled to timely paychecks for their 'employer, whoever it actually is, not late and not bouncers, no excuses accepted.

You have a legal claim to make for unpaid wages, untimely paid checks, penalties, interest and attorney fees if you win. If serious about pursuing it, feel free to contact me.

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Answered on 2/03/13, 7:54 pm


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