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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Legal
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Experience:  Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
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Is it legal for a business partner, co-owner of a company,

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Is it legal for a business partner, co-owner of a company, to delay another business partner's payroll check as a tactic of pressure or vendetta because the two have a personal dispute that has spilled over into the business atmosphere? The partner in question is in charge of all accounting and intentianally holds back payroll checks for a week or more at a time, while writing and cashing her own a day early at the same pay pereiod. Are there Federal laws being violated if this can be proven with physical as well as documented evidence?

Thank you for your question. Please permit me to assist you with your concerns.

That is a very good question. Is there some sort of a formal written schedule on when checks are supposed to be received? I ask because generally this isn't a federal violation, it is a state department of labor violation for improper wage withholding. There are federal wage laws in place that bar this practice, but those laws only come into effect if the state has no similar laws on the books. The law in Wisconsin states that wages for not more than 31 days prior to date of payment. Hence withholding payments for a week is not against state law, but it can be pursued under separate claims for 'tortious interference' since by her action the individual is intentionally attempting to harm the business and your position.

Here is the law that governs:

109.03 When wages payable; pay orders.

(1)Required frequency of payments. Every employer shall as often as monthly pay to every employee engaged in the employer's business, except those employees engaged in logging operations and farm labor, all wages earned by the employee to a day not more than 31 days prior to the date of payment. Employees engaged in logging operations and farm labor shall be paid all earned wages no less often than at regular quarterly intervals. Any employee who is absent at the time fixed for payment or who for any other reason is not paid at that time shall be paid thereafter at any time upon 6 days' demand. The required frequency of wage payments provided in this subsection does not apply to any of the following:
(a) Employees covered under a valid collective bargaining agreement establishing a different frequency for wage payments, including deferred payments exercised at the option of employees.
(b) School district and private school employees who voluntarily request payment over a 12-month period for personal services performed during the school year, unless, with respect to private school employees, the employees are covered under a valid collective bargaining agreement which precludes this method of payment.
(c) Unclassified employees of the University of Wisconsin System.
(d) Employees who receive compensatory time off under s. 103.025 in lieu of overtime compensation.
(e) A part-time fire fighter or a part-time emergency medical technician who is a member of a volunteer fire department or emergency medical services program maintained by a county, city, village, or town or of a volunteer fire company organized under ch. 181 or ch. 213 and who, by agreement between the fire fighter or emergency medical technician and the entity employing the fire fighter or emergency medical technician, is paid at regular intervals, but no less often than annually.
(2)Payment to discharged or resigned employees. Any employee, except a sales agent employed on a commission basis, not having a written contract for a definite period, who quits employment or who is discharged from employment shall be paid in full by no later than the date on which the employee regularly would have been paid under the employer's established payroll schedule or the date of payment required under sub. (1), whichever is earlier.
(3)Payment upon death of employee.
(a) In case of the death of an employee to whom wages are due, the full amount of the wages due shall upon demand be paid by the employer to the spouse, domestic partner under ch. 770, children, or other dependent living with the employee at the time of death.
(b) An employer may, not less than 5 days after the death of an employee and before the filing of a petition or application for administration of the decedent's estate, make payments of the wage due the deceased employee to the spouse, domestic partner under ch. 770, children, parents, or siblings of the decedent, giving preference in the order listed.
(c) If none of the persons listed in par. (b) survives, the employer may apply the payment of the wage or so much of the wage as may be necessary to paying creditors of the decedent in the order of preference prescribed in s. 859.25 for satisfaction of debts by personal representatives.
(d) The making of payment in the manner described in this subsection shall discharge and release the employer to the amount of the payment.
(4)Payment to certain separated employees. Whenever an employee is separated from the payroll of an employer as a result of the employer merging, liquidating or otherwise disposing of the business, ceasing business operations in whole or in part, or relocating all or part of the business to another area within or without the state, the employer, or the successors in interest of the employer, shall pay all unpaid wages to the employee at the usual place of payment within 24 hours of the time of separation.
(5)Enforcement. Except as provided in sub. (1), no employer may by special contract with employees or by any other means secure exemption from this section. Each employee shall have a right of action against any employer for the full amount of the employee's wages due on each regular pay day as provided in this section and for increased wages as provided in s. 109.11 (2), in any court of competent jurisdiction. An employee may bring an action against an employer under this subsection without first filing a wage claim with the department under s. 109.09 (1). An employee who brings an action against an employer under this subsection shall have a lien upon all property of the employer, real or personal, located in this state as described in s. 109.09 (2).
(6)Wage claim. In an action by an employee or the department against the employer on a wage claim, no security for payment of costs is required. In any such proceeding the court may allow the prevailing party, in addition to all other costs, a reasonable sum for expenses. No person other than an employee or the department shall be benefited or otherwise affected by this subsection.
(7)Protection of employees. Section 111.322 (2m) applies to discharge and other discriminatory acts arising in connection with any proceeding under this section.
The award of "expenses" under sub. (6) may include attorney fees. Jacobson v. American Tool Cos., Inc. 222 Wis. 2d 384, 588 N.W.2d 67 (Ct. App. 1998), 97-2219.
The inclusion of "the state" in the definition of employer at s. 109.01 (2) and the creation of a private cause of action against employers under sub. (5) is a waiver of the state's sovereign immunity. Claims under statutes enumerated in s. 109.09 (1) may be enforced by a private action brought under sub. (5). German v. DOT, 223 Wis. 2d 525, 589 N.W.2d 651 (Ct. App. 1998), 98-0250. Affirmed. 2000 WI 62, 235 Wis. 2d 576, 612 N.W.2d 50, 98-0250.
When an employer repudiates the contractual remedies of a collective bargaining agreement, employees are allowed to proceed under ch. 109 if they are seeking back pay. Beaudette v. Eau Claire Cty Sheriff's Department, 2003 WI App 153, 265 Wis. 2d 744, 668 N.W.2d 133, 02-2916.
Attorney fees are awardable under sub. (6). Jackman v. WMAC Inv. Corp. 610 F. Supp. 290 (1985).
In determining a reasonable attorney fee under sub. (6), a court starts by determining a reasonable hourly rate and number of hours, then makes adjustments for other factors in SCR 20:1.5 (a) or any other relevant factors. The court may use its own firsthand knowledge of the proceeding in determining the number of hours reasonably expended. The amount recovered in itself is not a reason to reduce a fee below an amount that represents a reasonable hourly rate. Lynch v. Crossroads Counseling Center, Inc. 2004 WI App 114, 275 Wis. 2d 171, 684 N.W.2d 141, 03-1344.
Sub. (5) establishes a distinct cause of action and enforcement procedure for a wage claim, wholly apart from any contract claims. Merely pleading a contract action based on nonpayment of wages is insufficient to trigger a ch. 109 wage claim under notice pleading. Wolnak v. Cardiovascular & Thoracic Surgeons of Central Wisconsin, S.C. 2005 WI App 217, 287 Wis. 2d 560, 706 N.W.2d 667, 04-1051.
Wisconsin requires time spent donning and doffing safety gear to be compensated at the minimum wage or higher, and that this time counts toward the limit after which the overtime rate kicks in. Wisconsin law is not preempted by federal law. Spoerle v. Kraft Foods Global, Inc. 614 F.3d 427 (2010).
Customer: replied 4 years ago.

This answer does not address the situation of a business owner. It only addresses employees vs. employers. I need to know my rights as an owner vs. another owner. I am my own employer, in a sense. But, I do not have authority to remove this partner by the bylaws. This is why she and the other partner are cleverly trying to remove me and therefore own the company by themselves by the foreclosure method. This is a manufacturing plant. the pay issue is only one part of the equation but a very important one. If I have no income I can't defend this.


If you are being paid by the business via a salary, you are considered an emloyee of the business (and owner). The law that I listed would govern the transaction. There is no federal or state law pertaining to wages owed from owner to owner, it comes from employer to employee, which is why the law I listed would govern. Otherwise it becomes not a wage dispute/concern but a breach of fiduciary duty claim against the business and the tortious interference claim I discussed in my previous response.

Good luck.

Dimitry K., Esq. and 3 other Legal Specialists are ready to help you
Customer: replied 4 years ago.

That's a little more help and clarifies it somewhat better...I think. It seems from your answer that I may be able to pursue the matter in court pursuant to the fiduciary responsibilities of the partner to the business as well as me, as an employee and owner. The bylaws have a clause about acts in "contravention of the agreement or that make it impossible to carry on the ordinary business of the company." This is the same one I used to file a cross claim on the bank's action, which a judge has stayed until the dispute is settled. Still, if the income is cut off, I'm in a pickle waiting for the proceedings to happen. I will win the arbitration hands down, because I have all evidence and it is on my side. Partners are delaying the arbitration any way they can and the one is waging a war of attrition.


Thank you,

Thank you for your follow-up, Ron.

Exactly right, this does become more of an issue with a fiduciary duty violation owed both to the business and to you as owner. It is not a wage violation, but it can be pursued for interfering with your ability to handle regular day-to-day operations in the same manner you pursued it in the past.

Hope that clarifies!

Customer: replied 4 years ago.

Ok, now that is more of the answer I was looking for. I needed that confirmation of what I already thought. I should then take this up with both the state and with the local courts by filing a complaint with the state, and also file a claim with the local courts for additional breach of contract.


Thank you again,


You are most welcome, and glad to help. Please let me know if I can assist in any other way!

If satisfied please do not forget to positively rate my answers so that I may obtain credit for my work. Thank you!


Dimitry, Esq.
Customer: replied 4 years ago.



I will definitely rate you well on this. You stayed with it and gave me the confidence I needed to proceed. I do have a business attorney here but he is perplexed about what to do on the dispute since the partners are not cooperating with us and stalling. I have a mountain of evidence, including personal emails generated on our company computers, which I understand are intellectual property and now I have been blocked from access to the other company emails to hide the evidence. Quite a complicated situation. My attorney is what you might term a general practitioner and I am concerned about that. It isn't always enough to be right, and losing your life's work at the end of your career is not easy to take. I am 65.


Thank you again for your jelp. I wish I had you on my team.


Ron Lay


I truly appreciate your comments. They really do mean quite a lot to me. I honestly hope that the information helps and you can get this done with a minimum of fuss. Please be well!
Customer: replied 4 years ago.

You are most welcome. I perceive you to be a decent young man and establishing yourself in your field and what you are doing is hopefully a good step toward the same thing I was doing at your age, trying to make good in a tough and changing work-a-day world. It is tough for me to accept that the lure of money may wreck a lifetime of achievement in my field of work. The reputation I have enjoyed is intact and so is my sanity. This does not diminish my faith in those coming along behind me.


Much luck to you Dimitry,

Ron Lay

Much luck to you as well, Ron. And if there is anything else you ever need to double-check, please let me know and I will do my best to help.


Dimitry, Esq.
Customer: replied 4 years ago.

Ok, will do. I suppose the only way to contact you is through this site and ask for you. Otherwise you have my number I listed as XXX-XXX-XXXX


Have a terrific day,


Site rules prohibit me from contacting you directly. Your personal informated is crossed out and I cannot even see it. But if you do need me again, simply start your next question "For Dimitry..." and I will be notified that you are seeking me out. Please take care!
Customer: replied 4 years ago.

Thanks Dimitry, you answered my initial question as best as I could expect. I gave you a good rating. I had a meeting with my business attorney yesterday and there is actin to be taken, although the statutes in this state allow for considerable employer discretion when it comes to pay, although in this case it is a partner using that to further a vendetta. I am dealing with it the best way I can.

Thank you for your followup.




You are most welcome and good luck to you. If there is anything further that you require, please let me know and I will do my best to help. Please be well!