Yes and no. Yes its illegal and action can be taken, no because there's a lot of run around, finger pointing, loopholes and people who are corrupt or just don't care. That's why you have Unions.

Sadly its not that strange for a company to be run into the ground, employees strung along, file bankruptcy so someone you know can buy it for cheap, new name, setup shop and yet another faceless company is up and running while you're up sh*t's creek. I'm not surprised though, most people will try to get away with something if they can, and for as long as they can. Greed will bring the end of humans anyway.