Clyde Snow

Are You Personally Liable for Employee Wage Claims?

by | Aug 19, 2020

Many business owners and executives are surprised to learn that even if their business is a corporation or a limited liability company (LLC), they may be personally liable for wage claims filed by their employees.

Federal Law

Under the federal Fair Labor Standards Act (FLSA) as interpreted by federal courts, you may be personally liable for wage claims if you are an owner, officer, executive, or high-level manager and any of the following is true:

  • You have overall control over the operations of the company;
  • Your reporting chain includes employee managers or supervisors;
  • You have oversight of payroll;
  • You have authority to hire and fire employees; or
  • You have control over employee work schedules and pay rates.

This is not a complete list of factors that may lead to liability, and none of these factors necessary means that a court would find you liable under the FLSA. But if any of these factors are present, you should take a personal interest in ensuring that employees at your organization are properly paid.

Potential liability under the FLSA includes unpaid wages, liquidated damages equal to the amount of unpaid wages, attorney fees, and costs.

Utah Law

Under Utah law, personal liability is slightly narrower than under the FLSA. The Utah Payment of Wages Act (UPWA) defines “employer” to incorporate the FLSA definition, but it carves out individuals who do not hold specific high-level positions. (Utah Code § 34-28-2(c).) Thus, you cannot be personally liable under the UPWA unless you are

  • an officer;
  • a manager of a manager-managed limited liability company;
  • a member of a member-managed limited liability company;
  • a general partner of a limited partnership; or
  • a partner of a partnership.

Potential liability under the UPWA includes unpaid wages, penalties, attorney fees, and costs. For a terminated employee, it may also include unused vacation, sick leave, PTO, floating holidays, bonuses, and severance if a contract or policy provides that these amount will be paid out upon termination. (Utah Admin. Code R610-3-4.)

Personal liability under the FLSA and the UPWA may be covered by Director & Officer liability insurance policies. Check with your company’s risk management department to find out if you are covered.

Thanks to Chris Snow for contributing research for this post!

Sign up for our latest updates.


Recent Posts

The Best Lawyers in America 2027 Edition

Bend, OR Reagan L.B. Desmond (Recognized in Best Lawyers since 2021) Natural Resources Law Water Law Salt Lake City, UT Dean C. Andreasen (Recognized in Best Lawyers since 2007) Family Law Family Law Mediation Edwin C. Barnes (Recognized in Best Lawyers since 2011)...

Best Lawyers: Ones to Watch in America 2027 Edition

Salt Lake City, UT Nathaniel Broadhurst (Recognized in Best Lawyers: Ones to Watch in America since 2027) Litigation - Environmental Katherine E. Pepin (Recognized in Best Lawyers: Ones to Watch in America since 2023) Criminal Defense: White-Collar Labor and...

Clyde Snow & Sessions Celebrates Legacy Attorneys

In November 2025, we had the privilege of celebrating our Legacy and Founding Partners of Clyde Snow & Sessions. Our Legacy Partners have played a pivotal role in shaping Clyde Snow & Sessions into the law firm it is today. Their contributions have not only...

Clyde Snow & Sessions Recognized as one of the 2026 Best Law Firms

Clyde Snow & Sessions is thrilled to share that our firm has been recognized as a 2026 Best Law Firms in America by Best Lawyers. We are honored to receive acknowledgment in the following categories: Eugene, Oregon Tier 2 in Natural Resources Law Salt Lake City,...

Pay Transparency Laws Are Creeping In: Are Utah Employers Safe?

This October, one thing scarier than ghosts and goblins is the growing wave of pay transparency laws creeping across the country, threatening to unearth compensation secrets long kept buried. Federal legislation, which died in previous years, has been resurrected and...

Clyde Snow Attorneys Named 2025 Mountain States Super Lawyers

Clyde Snow & Sessions, P.C. is proud to announce that 14 of our attorneys have been recognized in the 2025 edition of Mountain States Super Lawyers. This honor highlights attorneys who have demonstrated exceptional professional achievement and peer recognition in...

Related Posts