Finding help when an employer suddenly goes out of business

Earlier this week Keys' Kitchen, a deli and sandwich delivery business in Lodi's industrial district, suddenly closed its doors after being unable to pay a $20,000 electric bill. Many of its more than 70 employees said they had not received paychecks or that the paychecks they received in recent months had bounced.

Employees have rights, and Dean Fryer, spokesman for the California Division of Labor Standards Enforcement, said it's important for employees to know what to do when an employer closes its doors without notice.

"No employee is stuck in that situation," he said. "They certainly have plenty of rights."

Companies must expressly give notice at least 60 days before conducting a "mass layoff" of 50 or more employees, Fryer said. This also applies to companies that go out of business.

According to employee reports, Keys' Kitchen employees were given no such notice.

If not notified, employees may be entitled to that 60 days in pay immediately, along with any other pay they may be owed.

"They can't mail it or give it out later," Fryer said. "(Employers) have to pay that right away."

He recommends that any employee who feels they are not paid properly or is worried that they will not be paid should file a claim with the DLSE, either at the county office in Stockton or online at http://www.dir.ca.gov/dlse.

"If an employer is responsible and knows they're going out of business, there's a lot that can be done," said Ricarda Spivey, employment program representative with the Lodi branch of the California Employment Development Department. "We can actually step in there and help,"

EDD offers a service called Rapid Response. After an employer notifies the DLSE that they are going out of business, the EDD helps employees find new jobs before they're left out in the cold without a paycheck, Spivey said.

However, employees who work for smaller companies may have a tougher time, Fryer said. Because almost all employment in California is at will — employment can be terminated anytime by the employer or employee — companies with fewer than 50 employees that go out of business do not qualify as a mass layoff and employees are not entitled to such penalties.

"All employees in this situation have the right to apply for unemployment insurance," Spivey said.

Any employee who loses their job through no fault of their own may be eligible for unemployment insurance, as certainly would be the case in a situation like Keys' Kitchen, she said.

EDD, located at 631 E. Oak St., also has a wide range of programs to help those who may suddenly be without a job. Aside from helping employees file for unemployment, they help place people in jobs that fit their skills, and offer seminars and one-on-one help with everything from building a resume to polishing interview skills.

They can even help workers file a claim with DLSE if they haven't received pay they're owed. Many of the EDD services are even online at http://www.edd.ca.gov.

Contact reporter Scott Kaul at scottk@lodinews.com

What to do if your employer unexpectedly goes out of business

File a claim with the Division of Labor Standards Enforcement if:
• The company you worked for had 50 or more employees and you received less than 60 days' notice. You may be entitled to penalties for lack of notice.
• You have not received your final paycheck and you suspect you will not be paid soon, or your paycheck is for less than what your are owed. A claim should be filed any time an employer is not paying you properly.
File claims at the county DLSE office, 31 E. Channel St., Room 317, Stockton, or online at http://www.dir.ca.gov/dlse.
File for unemployment insurance
Employees who lose their jobs through no fault of their own may qualify for unemployment insurance.
Apply in person at the Lodi EDD branch, 631 E. Oak St., or online at http://www.edd.ca.gov.
Get help finding a new job
The Employment Development Department offers many free seminars and one-on-one help for those searching for a job, including resume building and interviewing skills. They even help match job seekers with employers.
DLSE and EDD both offer all services in English and Spanish, as well as many in several other languages.
— News-Sentinel staff.

First published: Friday, February 2, 2007

Reader Feedback

I see my comment wrote on Feb 3, 2007 2:00 AM:

" was edited. I noted how this story was newsworthy, unlike the dumb article about teachers lounges, etc. Can't take the criticism LNS? If you can't stand the heat, get out of the kitchen. "

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Kip Gies wrote on Feb 2, 2007 7:42 PM:

" The reality is, Lodi Power, is at least over priced, and at wost, mismanaged, and drowning. Of course, we the residents of this city, pay CRAZY rates here. Time to sell it to SMUD! At least they know how to run a utility. "

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David D wrote on Feb 2, 2007 6:17 PM:

" Key's Kitchen wasn't just a restaurant/deli. They made a number of sandwiches for convinient stores and "mobile eateries". They probably sold a lot more than 400 sandwiches a day. "

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Call Me Mr. Duh wrote on Feb 2, 2007 11:22 AM:

" I dont know the magnitude of this mess, but just to pay the utility bill to the city, Key's would have to devote $1 of each sandwich and sell 400 sandwiches a day. Add to that everything else, how does anyone stay in business ?? "

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Now this is news worthy wrote on Feb 2, 2007 10:31 AM:

" ...that hopefully no teacher is using to smoke in and expose those who don't smoke to dangerous second hand smoke that kills people. Remember the commercials from long ago? If you smoke, quit. "

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WTF wrote on Feb 2, 2007 10:27 AM:

" C.O.L. Revenue Dept. wanted to shut off the power for being 2 months "past due". The owners said close it...we can't do business without electricty. "

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