A statute on the books in Kentucky requires companies to post a bond for wages due from an employer, as protection against bankruptcy. Following the collapse of Kentucky coal company Blackjewel LLC—and the loss of three weeks of wages for every employee—an investigation by local media and Kentucky Attorney General Andy Beshear revealed that many companies do not abide by the statute. The statute states that (http://bit.ly/2lU9RMl):
“Except for employers who have been doing business in the state for five (5) consecutive years, every employer engaged in construction work, or the severance, preparation, or transportation of minerals, shall furnish on a form prescribed by the commissioner a performance bond to assure the payment of all wages due from the employer. Surety for the bond shall be an amount of money equal to the employer’s gross payroll operating at full capacity for four (4) weeks.”
The Lexington Herald-Leader found (http://bit.ly/2kitcXr) that many companies are exempt from the requirement, due to being in continuous business for more than five years, but dozens of companies that fall under the law nevertheless refuse to post the bond, or are not aware they are required to post a bond.
In related news, the state’s labor council supported a bill (http://bit.ly/2lxAGWC) that would have removed the requirement, but that bill was defeated in the legislature.
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