Did you know that wages aren’t treated like ordinary debts under California and federal law because people rely on paychecks for everyday expenses. Normally, you can’t be jailed for failing to pay debts. But if an employer can afford to pay wages yet willfully refuses to do so, they can be charged with wage theft—and that can lead to criminal convictions and jail time. Courts have, in fact, sent such employers to jail in past cases, underscoring how serious it is to intentionally deny workers their earned wages.
For similar reasons, an employee’s unpaid wages up to $10,000 has priority over most other types of unsecured debts that employers in bankruptcy owe. That means that when an employer that is in bankruptcy has property that can be divided up to pay the employer’s creditors, the employer’s employees have a higher position in line to get paid before some other creditors.
(See Link(s): Labor Code section 216; 11 U.S. Code section 507)