When an employer files for bankruptcy, employees may have a lot of questions about their rights and what will happen to their job. The following is some information that may be helpful for employees who are facing this situation.
First, it’s important to understand that there are different types of bankruptcy. The type of bankruptcy that your employer has filed will affect your rights as an employee. For example, if your employer has filed for Chapter 7 bankruptcy, all of the company’s assets will be sold and the business will be dissolved. In this case, you will most likely be laid off and will not receive any severance pay.
If your employer has filed for Chapter 11 bankruptcy, the business will remain open and will try to reorganize its finances. In this case, you may still have your job, but your hours or pay could be reduced. You may also be asked to sign a new employment contract with different terms and conditions.
What Are My Rights After My Employer Files for Bankruptcy?
It’s important to know that even if your employer has filed for bankruptcy, you still have certain rights as an employee. For example, you can’t be fired simply because your employer is in bankruptcy. And, if you’re laid off, you’re entitled to receive severance pay and other benefits that you’ve earned.
However, there are some situations where an employer can legally fire employees after filing for bankruptcy. For example, if the company is closing its doors permanently, employees can be let go without receiving severance pay. Or, if the company is reorganizing and needs to reduce its workforce, employees may be laid off or have their hours reduced.
What Complications Can Arise?
While bankruptcy can be a complicated process, there are some complications that can arise specifically for employees. For example, if you’re laid off and are owed severance pay, you may have to wait until the bankruptcy case is resolved before you receive any money. And, if your employer is reorganizing under Chapter 11 bankruptcy, your role at work may not be the same as before.
If you have questions about your rights as an employee after your employer has filed for bankruptcy, it’s important to speak with an experienced attorney who can help you understand your options.
What Should I Do Next?
If your employer has filed for bankruptcy, the best thing you can do is consult with an experienced employment lawyer. A lawyer can review your situation and advise you of your rights as an employee. Additionally, a lawyer can help you negotiate with your employer if you’re being asked to sign a new employment contract.
If you have any questions about your rights after your employer has filed for bankruptcy, contact our office today to schedule a consultation with one of our experienced attorneys. Call us today at (501) 891-6000 to get the legal help you deserve.