In these current economic times, job security is a luxury. It seems that we cannot go a day without hearing about layoffs or another company filing for bankruptcy. Sometimes, when companies are forced to cease operations, they may not have enough money to pay their employee’s final wages. Not only are the employees then out of a job, they may also be without a final paycheck on which they may have been relying. There are many reasons that an employer may go out of business, ranging from mismanagement to a changing marketplace. Sometimes, employers may even deliberately withhold wages to try and keep a failing business afloat. Regardless of the reason, a situation like this can lead to employees getting behind on mortgages and other obligations, potentially leading to foreclosures, repossessions, lawsuits, and even bankruptcy. Fortunately for employees who find themselves in suddenly without work or money, the Oregon Legislature created the Wage Security Fund in 1985 to protect workers from wage loss due to a company or plant ceasing operations with insufficient funds.
In order to qualify for assistance under the fund, an Oregon employee must be employed by a company that ceases operations and has insufficient funds to pay its final wages. The benefits available to the employee include the amount that they earned preceding the closure date of the company or the amount of wages that were not paid within 60 days of the last date of employment. There is a $4,000 cap on the benefits that a person may receive, and other benefits such as sick leave or vacation are not included. An employee’s FICA taxes as well as state income taxes will be deducted from the amount received, while the employer remains responsible for their portion of the applicable taxes. The Wage Security Fund is paid for by a .03 percent diversion of Oregon employment tax paid by employers each three month period of odd-numbered years. During the period between 2005 and 2007, the Wage Security fund paid out over $1.6 million to over 1,100 workers.
How to file a Wage Security Fund Claim
In order to file a claim, an employee must submit a W-4 form along with a Wage Security Claim form that is available at any Bureau of Labor and Industry Office. Under ordinary circumstances, your claim should be processed and, if you qualify for reimbursement from the Wage Security Fund, you should receive your fair share of final compensation up to the $4,000 limit. If, for some reason, something goes awry and you are found ineligible for reimbursement, you should consult with an attorney experienced with Oregon’s employment laws as soon as possible. There are strict time limitations on wage and hour claims, and so you should not hesitate to contact our office today.