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PennySaver being investigated for violation of labor laws

According to California's Labor Commissioner, the PennySaver is being investigated with regard to questions of whether the company violated labor law when it laid off nearly 700 employees without any notice.

Company executives called a meeting with approximately 200 workers to notify them that they would not receive a final paycheck or payment for accrued vacation days.

Early in the meeting, executives made it clear that the workers would receive their final paycheck. However, within minutes, they changed their mind as the result of information obtained from its lender.

Employees who took part in the meeting said they were informed that the company was searching for a new owner, however, things were not looking good.

The workers are in position to take some action. For example, they have the ability to file a wage claim through the California Labor Commissioner office. There is also a federal law in place, the WARN Act, that requires companies with more than 100 workers to provide a minimum of 60 days notice before making large scale layoffs or closing the company.

The company's chief executive officer noted "PennySaver did everything possible to try to stay in business and was in the process of pursuing a number of alternatives when our lender unexpectedly ceased our funding late Friday evening."

For a company that has been in business 50 years, it is a shame that things had to end on such a sour note. While the PennySaver may have closed its doors, it doesn't mean that these employees should lose out on a final paycheck and vacation time.

Source: Orange County Register, "State to investigate PennySaver closure; did company violate labor laws?," Joanna Clay and Lauren Williams, May 26, 2015

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