Friday, December 19th, 2014

The Obameter

Allow workers to claim more in unpaid wages and benefits in bankruptcy court


"Increase the amount of unpaid wages and benefits workers can claim in bankruptcy court against their employer."

Updates

No progress on promise regarding unpaid wages

The federal government creates the rules that govern bankruptcy, which is when people or businesses go to court to declare they are unable to pay their creditors. Barack Obama pledged during the campaign to change the rules so that workers could ask the courts for more in unpaid wages and benefits from bankrupt employers.

That type of expansion would have to be approved by Congress, but Congress has taken no action on the matter. So a year ago, we rated this promise Stalled.

We asked the White House whether any progress was being made on this promise, and they were unable to provide any evidence that it was advancing. If any progress is made in the future, we'll change our rating, but after two years and with no sign of action, we're shifting this one to Promise Broken.

Sources:

No new rules on bankruptcy and wages

The federal government creates the rules that govern bankruptcy, which is when people or businesses go to court to declare they are officially out of money. Barack Obama pledged during the campaign to change the rules so that workers could ask the courts for more in unpaid wages and benefits from bankrupt employers.

That type of expansion would have to be approved by Congress, but Congress has taken no action on the matter. In fact, legislation has not even been introduced.

Samuel Gerdano, executive director of the American Bankruptcy Institute, confirmed the results of our search. The institute is an association for professionals including attorneys, judges, bankers and accountants who work on bankruptcy issues.

Gerdano said a similar provision had been part of legislation introduced in the previous Congress, in 2007, but no such legislation is pending now.

Because there's no movement to change the bankruptcy law, we rate this promise Stalled.

Sources:

E-mail interview with Samuel Gerdano of the American Bankruptcy Institute

Thomas, H.R. 3652 , introduced Sept. 25, 2007