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Yes, it is absolutely illegal to fail to pay employees. If the failure can be proven as intentional, it can even be construed as a crime. The real question for you is what to do. The general rule is that quitting will result in disqualification from unemployment benefits. However, if an employee can demonstrate that they quit for reasons amounting to good cause, they will be approved. Not getting paid for your work is absolutely "good cause" for quitting that work. The law does not expect people to work without getting paid.
As far as getting what you are owed, there are some practical limitations of the law. Someone can break the law, but it's another thing to actually get a judgment you can collect from them. This is not to say you shouldn't try, though. In fact, the SOONER you try the better, because if your employer goes bankrupt, there may be nothing left, or there may be multiple creditors fighting for a share of whatever assets are left over. It is best to get a head start by moving forward with a legal claim as soon as you can.
You can either file a lawsuit or a wage claim, but in circumstances like this the wage claim option is usually better because it doesn't cost any money and you don't need to have an attorney. See here to initiate the wage claim process.
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