May 11, 2021

Volume XI, Number 131


May 10, 2021

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New York Legislature Passes Bill Allowing Liens on Employers for Alleged Wage Claims

A bill aimed at increasing protections for employer “wage theft” by allowing an employer’s current or former employee, or the New York State Department of Labor (NYSDOL), to place a lien on the employer’s interest in real or personal property for the value of a wage claim, plus liquidated damages, has passed the New York State Legislature. If signed by Governor Andrew Cuomo, the law will become effective 30 days after signing.

Examples of employer wage theft include minimum wage violations, failing to pay overtime, and not paying tipped workers the difference between their tips and the legal minimum wage.

The bill permits workers to put a lien on an employer’s property in connection with an alleged “wage claim.” A “wage claim” is defined as a claim for a violation of New York Labor Law Sections 170 (hours of labor for domestic workers), 193 (deductions from wages), 196-d (gratuities), or 652 and 673 (minimum wages), as well as the related regulations and wage orders promulgated by the labor commissioner. A “wage claim” also includes a claim for wages due to an employee pursuant to an employment contract that were unpaid in violation of that contract, and a claim for violations of the Fair Labor Standards Act (FLSA) (e.g., overtime claims).

An employee’s lien for a wage claim may not be placed on an employer’s bank accounts or goods.

The lien may be filed at any time, but not later than three years following the end of the employment giving rise to the wage claim.

If the bill becomes law, it could have unintended negative consequences for employers operating in New York. Of the handful of other states that already allow similar liens on employers, only one (Wisconsin) allows such liens based solely on allegations, rather than a finding of liability. Opponents of the bill have identified a number of other concerns for the state’s business community should the bill become law, including a potential freeze to credit needed by small businesses when a lien is filed because banks may not extend credit under such circumstances. They also argue that the bill would give employees unfair leverage.

Jackson Lewis P.C. © 2021National Law Review, Volume IX, Number 206



About this Author

Jeffrey Brecher, Jackson Lewis, Management Arbitration Lawyer, Labor Litigation Attorney

Jeffrey W. Brecher is a Principal in the Long Island, New York, office of Jackson Lewis, and is Practice Group Leader of the firm's Wage and Hour practice. He has litigated hundreds of cases, defending management at arbitration, before state and federal administrative agencies and at trial.

Mr. Brecher regularly advises clients on compliance with various state and federal laws affecting the workplace, including discrimination and related claims arising under Title VII, Family and Medical Leave Act, Americans with...

Heather Hili, attorney

Heather C. Hili is an Associate in the Long Island, New York, office of Jackson Lewis P.C. Her practice focuses on representing employers in employment law matters, including wage and hour, discrimination, harassment and retaliation claims, as well as providing preventive advice and counseling.

Prior to joining Jackson Lewis, Ms. Hili was an Associate in the Employment Practices Group in the New York City office of a national law firm.