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New York Legislature Passes Bill Allowing Employees to Place a Lien on Employer’s Property for Wage Claims

The New York Senate and Assembly recently passed Senate Bill S2844B to strengthen current laws for employees who are victim of wage theft to secure and collect unpaid wages for work already performed from their employers. This bill would amend five sections of the law (Lien Law; Labor Law; Attachment under the Civil Practice Law and Rules; the Business Corporations Law; and the Limited Liability Law). If signed by the Governor, this bill would create a broad right for any employee to obtain a lien on an employer’s property based on the allegation of a wage claim and would significantly increase employee power in such disputes.

This bill would expand on current lien remedies and create an “employee lien,” that would allow an employee who has a wage claim to place a lien on his or her employer’s interest in property (real or personal property) for the value of that employee’s wage claim, plus liquidated damages. “Wage claim” is defined as any claim constituting a violation of New York Labor Law § 170 (overtime), § 193 (improper deductions), § 196-d (gratuities) , or § 652 and § 673 (minimum wage). Wage claims also include claims for breach of employment contract where wages are not payed under the contract, and Federal minimum wage claims pursuant to 29 U.S.C. § 206 and § 207. The employee’s lien cannot be placed on an employer’s deposit accounts or goods.

Notice of the lien must be filed within three years of the end of employment which gave rise to the wage claim. Real property notice must be filed in the clerk’s office of the county where the property is located. Personal property notice must be filed with a financing statement pursuant to section 9-501 of the Uniform Commercial Code. Employee’s liens may be filed by the employee or the New York State Department of Labor and the New York Attorney General for wage claims that are subject of their investigations, court actions or administrative agency actions. Notice of an employee’s lien must be served upon the employer within five days before or 30 days after filing notice. The lien is valid for one year unless extension is filed with the county clerk. If no action is commenced during the extension period, the lien will be automatically extinguished unless extended by a court order.

If passed, this bill would also streamline the procedures to which employees may hold the ten largest shareholders of a non-publicly traded corporation and the ten members with the largest ownership interests in a limited liability company personally liable for wage theft. The bill also contains a provision that would allow employees to examine a business corporation’s and limited liability company’s records to obtain the shareholders’ or members’ (as the case may be) names, addresses, and ownership value in the company.

Once the bill is signed by the Governor, it will take effect 30 days after becoming law and will apply to all claims for liabilities that arose prior to its passage.

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About this Author

Leslie Levinson Health Business Attorney

Leslie Levinson is co-chair of the firm's Transactional Health Law Group and a member of both the Health Law and Business Transaction Groups. He has represented private and public businesses throughout his more than 30-year career. Although Les maintains an active business law practice, he concentrates on the transactional, regulatory, and compliance representation of health care and life science clients, including home care and hospice companies, physician practices, hospitals, information technology and medical device companies, health care equipment providers, and health care investors...

Ian T. Clarke-Fisher Robinson Cole Partner  Business Litigation, Labor, Employment, Benefits, Immigration Group

Ian Clarke-Fisher focuses his practice on complex commercial and employment litigation. He is a member of the firm’s Business Litigation Group and Labor, Employment, Benefits + Immigration Group.

Commercial Litigation
Ian works with businesses on every aspect of a dispute, from pre-litigation strategies to taking matters on appeal.  His commercial cases involve complex contractual disputes, along with breach of fiduciary duty, business torts, unfair trade practices, and intellectual property claims.  His clients range from Fortune 500 companies to family businesses and start-ups in a broad variety of industrial and commercial sectors.

Ian has attained significant results for clients, including recently assisting a global technology provider with successfully obtaining a $50,000,000 judgment and foreclosing the security interests. Ian also obtained summary judgment in a dispute between members of an LLC dismissing all derivative claims, including claims of tortious interference, conversion, and breach of fiduciary duty, brought by the majority members. Further, Ian regularly assists clients in contractual disputes in the recovery of substantial pre-litigation payments and prompt resolutions.

Employment Litigation
Ian also regularly represents businesses in complex employment matters, including wage and hour collective and class actions and claims relating to discrimination and retaliation.  He has achieved positive results in such matters, including obtaining numerous dismissals on behalf of employers before state agencies and in the courts, together with appeals.  Ian is particularly experienced in trade secret and non-compete claims, from handling pre-suit investigations to obtaining injunctions on behalf of employers, handling claims of breach of contract, unfair competition, trade secrets, and tortious interference.


In addition, Ian is a member of the Firm’s multi-disciplinary International Practice Team.  In this regard, Ian assists international clients with U.S. disputes and regularly provides advice on related contractual issues.  In 2017, Ian represented the Firm in a month-long secondment at a large British law firm to build and strengthen the Firm’s international relationships with both lawyers and clients.