All you have to do is file a wage theft claim with the Labor Commissioner, who evaluates your claim and issue an ODA (Order Decision or Award). Once the ODA is filed it is considered a legal judgement against the employer. You can then use any legal means to collect.
Anyone who's been on the internet more than five minutes knows how much an uncited claim about the law is worth.
I find it very hard to believe they don't have some clause about employers acting in good faith but who can't make payroll because the payment processor had a truck number of 1, the bank was robbed that day and there was a police line or any of the other legitimate reasons processes have hiccups. And if they don't have that clause the labor commissioner almost certainly just ignores those claims until it's clear whether they're gonna shake themselves out or not.
The labor commissioner's office is almost certainly going to be slower at getting people the money than the company is (the latter is already set up to do so) in cases where the company is acting in good faith so in those cases the labor compssioner's office will best serve employees and also have the least work to do by just sitting back.
You forget that thinking, rational, humans are ultimately charged with enforcing the law.
Also, you seem way too certain of something that has no precedent. Show me where a major bank has gone under, caused companies to miss payroll, and the corporate officers were held liable.
Sure, but if all but $250k of your funds are in limbo and you don't have revenue, there's nothing to collect.
The wage theft section of the California Penal Code (section 487m) says it is the intentional deprivation of wages. The California Labor Code talks about it in section 216, which applies when the employer has the ability to pay and willfully refuses.
It is hard to see how failure to pay because your bank collapsed and you can't get the money would be either intentional or a willful refusal.
If my employer knows they can't pay me, and they ask me to do work anyway that is causing me serious losses. The moment they know they can't pay me, they have to stop asking me to do work. I would expect someone to be accountable for those sort of serious lies.
If your employer said to you, “we are caught up in this, we are working to resolve the situation“ it would be pretty fair and reasonable of them. You can choose to quit if you want, you’re under no obligation to work.
You could argue that an overly cautious founder might cut all their employees off immediately out of an abundance of caution, but that would be self-immolation.
As a non-lawyer with zero credibility, I’d be shocked if any founders of companies that can’t make payroll because of this are at risk of the corporate veil being pierced. SVB was based in California, subject itself to California law, it would require some extreme mental gymnastics from a judge to believe that a company that can’t make payroll because they used SVB behaved inappropriately in this situation.
Again, I have zero credibility, but I’d expect when the dust settles, the only companies we see get in any trouble will be the companies that do some insane illegal things in a panic because they get caught up in the tidal wave of fear. Founders withdrawing millions into their personal accounts and then losing it by buying crypto or going to vegas to do a fedex with their remaining cash or something equally insane feels much more likely an outcome.