Failed Bank Clients Risk ‘Draconian’ Fines if They Miss Payroll

Businesses with funds tied up in the recently failed Silicon Valley Bank wrestled over the weekend with the question of how to pay their employees, plus the risk of state and federal fines for late wage payments.

But fears that companies’ bank deposits wouldn’t be accessible plus ongoing uncertainty about financial markets serve as “a wakeup call” for businesses to have contingency plans for when they can’t make payroll on time, said Kathleen Caminiti, an employment lawyer at Fisher & Phillips LLP in New Jersey and New York. These could include plans for temporary furloughs when needed, or for ...