What's happening
This bill allows employees in New York to file liens against employers' property for unpaid wages, expanding legal remedies for wage theft.
Why it matters
Statewide reach, with limits. Workers covered by the specified state or federal wage laws could use the lien process across New York, but governmental employers would be excluded. Liens could include liquidated damages, but could not reach deposit accounts or goods.
Earlier asset protection. Wage claims would become a separate ground for court-ordered attachment, with the worker’s required security capped at $500 or waived. Employee lien notices could be filed up to three years after employment ends, and the new procedures could also be used for liabilities arising before the bill takes effect.
Fewer barriers to owner liability. The bill would remove advance-notice and unsuccessful-collection prerequisites for pursuing the ten largest shareholders of covered non-publicly traded corporations and the ten largest LLC owners. It would also expand covered corporate shareholder liability to include liquidated damages, penalties, interest, attorney’s fees and costs.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Workers with unpaid wage claims
They would gain access to ownership records that could help identify shareholders or LLC members personally liable for their wages.
Corporate shareholders and LLC members
The ten largest owners covered by the liability provisions could face wage claims without the existing advance-notice and unsuccessful-collection prerequisites.
New York State Department of Labor and Attorney General
They could obtain employee liens for workers whose wage claims are under investigation or involved in their enforcement actions.
Mortgage lenders and other creditors
Employee liens would receive priority over certain later-recorded claims and preference over other claimants under the amended lien provisions.
Headline styles
Protect Workers' Unpaid Wages
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to codes
- Delivered to assembly
- Passed senateVote 40–20
- Ordered to third reading cal.816
- Reported and committed to rules
- Reported and committed to rules
- Referred to judiciary
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Let Workers Claim Unpaid Wages
In Assembly Committee · Codes · Sponsor Linda Rosenthal
Full text
19 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7256
IN SENATE
January 14, 2020
Introduced by Sens. RAMOS, BAILEY, BIAGGI, GIANARIS, GOUNARDES, HOYLMAN, JACKSON, KRUEGER, LIU, RIVERA, SALAZAR, SANDERS, STAVISKY -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary
AN ACT to amend the lien law, in relation to employee liens; to amend the labor law, in relation to employee complaints; to amend the civil practice law and rules, in relation to grounds for attachment; to amend the business corporation law, in relation to… Show allHide
AN ACT to amend the lien law, in relation to employee liens; to amend the labor law, in relation to employee complaints; to amend the civil practice law and rules, in relation to grounds for attachment; to amend the business corporation law, in relation to streamlining procedures where employees may hold shareholders of non-publicly traded corporations personally liable for wage theft; and to amend the limited liability company law, in relation to creating a right for victims of wage theft to hold the ten members with the largest ownership interests in a company personally liable for wage theft
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 2 of the lien law is amended by adding three new subdivisions 21, 22 and 23 to read as follows:
21. Employee. The term "employee", when used in this chapter, shall have the same meaning as "employee" pursuant to articles one, six, nineteen and nineteen-A of the labor law, as applicable, or the Fair Labor Standards Act, 29 U.S.C. § 201 et. seq., as applicable.
22. Employer. The term "employer", when used in this chapter, shall have the same meaning as "employer" pursuant to articles one, six, nineteen and nineteen-A of the labor law, as applicable, or the Fair Labor Standards Act, 29 U.S.C. § 201 et. seq., as applicable, except that the term "employer" shall not include a governmental agency.
23. Wage claim. The term "wage claim", when used in this chapter, means a claim that an employee has suffered a violation of sections one hundred seventy, one hundred ninety-three, one hundred ninety-six-d, six hundred fifty-two or six hundred seventy-three of the labor law or the related regulations and wage orders promulgated by the commissioner, a claim for wages due to an employee pursuant to an employment contract that were unpaid in violation of that contract, or a claim that an employee has suffered a violation of 29 U.S.C. § 206 or 207.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00946-07-0
S. 7256 2
§ 2. Section 3 of the lien law, as amended by chapter 137 of the laws of 1985, is amended to read as follows:
§ 3. Mechanic's lien and employee's lien on [real] property. 1. Mechanic's lien. A contractor, subcontractor, laborer, materialman, landscape gardener, nurseryman or person or corporation selling fruit or ornamental trees, roses, shrubbery, vines and small fruits, who performs labor or furnishes materials for the improvement of real property with the consent or at the request of the owner thereof, or of his agent, contractor or subcontractor, and any trust fund to which benefits and wage supplements are due or payable for the benefit of such laborers, shall have a lien for the principal and interest, of the value, or the agreed price, of such labor, including benefits and wage supplements due or payable for the benefit of any laborer, or materials upon the real property improved or to be improved and upon such improvement, from the time of filing a notice of such lien as prescribed in this chapter. Where the contract for an improvement is made with a husband or wife and the property belongs to the other or both, the husband or wife contracting shall also be presumed to be the agent of the other, unless such other having knowledge of the improvement shall, within ten days after learning of the contract give the contractor written notice of his or her refusal to consent to the improvement. Within the meaning of the provisions of this chapter, materials actually manufactured for but not delivered to the real property, shall also be deemed to be materials furnished.
2. Employee's lien. An employee who has a wage claim as that term is defined in subdivision twenty-three of section two of this chapter shall have a lien on his or her employer's interest in property for the value of that employee's wage claim arising out of the employment, including liquidated damages pursuant to subdivision one-a of section one hundred ninety-eight, section six hundred sixty-three or section six hundred eighty-one of the labor law, or 29 U.S.C. § 216 (b), from the time of filing a notice of such lien as prescribed in this chapter. An employee's lien based on a wage claim may be had against the employer's interest in real property and against the employer's interest in personal property that can be sufficiently described within the meaning of section 9-108 of the uniform commercial code, except that an employee's lien shall not extend to deposit accounts or goods as those terms are defined in section 9-102 of the uniform commercial code. The department of labor and the attorney general may obtain an employee's lien for the value of wage claims of the employees who are the subject of their investigations, court actions or administrative agency actions.
3. As used in this article and unless otherwise specified, a lien shall mean an employee's lien or a mechanic's lien.
§ 3. Subdivisions 1 and 2 of section 4 of the lien law, subdivision 1 as amended by chapter 515 of the laws of 1929 and subdivision 2 as added by chapter 704 of the laws of 1985, are amended to read as follows:
(1) [Such] A mechanic's or employee's lien and employee's lien against real property shall extend to the owner's right, title or interest in the real property and improvements, existing at the time of filing the notice of lien, or thereafter acquired, except as hereinafter in this article provided. If an owner assigns his interest in such real property by a general assignment for the benefit of creditors, within thirty days prior to such filing, the lien shall extend to the interest thus assigned. If any part of the real property subjected to such lien be removed by the owner or by any other person, at any time before the discharge thereof, such removal shall not affect the rights of the
S. 7256 3
lienor, either in respect to the remaining real property, or the part so removed. If labor is performed for, or materials furnished to, a contractor or subcontractor for an improvement, the mechanic's lien shall not be for a sum greater than the sum earned and unpaid on the contract at the time of filing the notice of lien, and any sum subsequently earned thereon. In no case shall the owner be liable to pay by reason of all mechanic's liens created pursuant to this article a sum greater than the value or agreed price of the labor and materials remaining unpaid, at the time of filing notices of such liens, except as hereinafter provided.
(2) [Such] A mechanic's or employee's lien shall not extend to the owner's right, title or interest in real property and improvements, existing at the time of filing the notice of lien if such lien arises from the failure of a lessee of the right to explore, develop or produce natural gas or oil, to pay for, compensate or render value for improvements made with the consent or at the request of such lessee by a contractor, subcontractor, materialman, equipment operator or owner, landscaper, nurseryman, or person or corporation who performs labor or furnishes materials for the exploration, development, or production of oil or natural gas or otherwise improves such leased property. Such mechanic's or employee's lien shall extend to the improvements made for the exploration, development and production of oil and natural gas, and the working interest held by a lessee of the right to explore, develop or produce oil and natural gas.
§ 4. The opening paragraph of section 4-a of the lien law, as amended by chapter 696 of the laws of 1959, is amended to read as follows:
The proceeds of any insurance which by the terms of the policy are payable to the owner of real property improved, and actually received or to be received by him because of the destruction or removal by fire or other casualty of an improvement on which lienors have performed labor or services or for which they have furnished materials, or upon which an employee has established an employee's lien, shall after the owner has been reimbursed therefrom for premiums paid by him, if any, for such insurance, be subject to liens provided by this act to the same extent and in the same order of priority as the real property would have been had such improvement not been so destroyed or removed.
§ 5. Subdivisions 1, 2 and 5 of section 9 of the lien law, as amended by chapter 515 of the laws of 1929, are amended to read as follows:
1. The name of the lienor, and either the residence of the lienor or the name and business address of the lienor's attorney, if any; and if the lienor is a partnership or a corporation, the business address of such firm, or corporation, the names of partners and principal place of business, and if a foreign corporation, its principal place of business within the state.
2. The name of the owner of the [real] property against whose interest therein a lien is claimed, and the interest of the owner as far as known to the lienor.
5. The amount unpaid to the lienor for such labor or materials, or the amount of the wage claim if a wage claim is the basis for establishment of the lien, the items of the wage claim and the value thereof which make up the amount for which the lienor claims a lien.
§ 6. Subdivision 1 of section 10 of the lien law, as amended by chapter 367 of the laws of 2011, is amended to read as follows:
1. (a) Notice of mechanic's lien may be filed at any time during the progress of the work and the furnishing of the materials, or, within eight months after the completion of the contract, or the final perform-
S. 7256 4
ance of the work, or the final furnishing of the materials, dating from the last item of work performed or materials furnished; provided, however, that where the improvement is related to real property improved or to be improved with a single family dwelling, the notice of mechanic's lien may be filed at any time during the progress of the work and the furnishing of the materials, or, within four months after the completion of the contract, or the final performance of the work, or the final furnishing of the materials, dating from the last item of work performed or materials furnished; and provided further where the notice of mechanic's lien is for retainage, the notice of mechanic's lien may be filed within ninety days after the date the retainage was due to be released; except that in the case of a mechanic's lien by a real estate broker, the notice of mechanic's lien may be filed only after the performance of the brokerage services and execution of lease by both lessor and lessee and only if a copy of the alleged written agreement of employment or compensation is annexed to the notice of lien, provided that where the payment pursuant to the written agreement of employment or compensation is to be made in installments, then a notice of lien may be filed within eight months after the final payment is due, but in no event later than a date five years after the first payment was made. For purposes of this section, the term "single family dwelling" shall not include a dwelling unit which is a part of a subdivision that has been filed with a municipality in which the subdivision is located when at the time the lien is filed, such property in the subdivision is owned by the developer for purposes other than his personal residence. For purposes of this section, "developer" shall mean and include any private individual, partnership, trust or corporation which improves two or more parcels of real property with single family dwellings pursuant to a common scheme or plan. [The]
(b) Notice of employee's lien may be filed at any time not later than three years following the end of the employment giving rise to the wage claim.
(c) A notice of lien, other than for a lien on personal property, must be filed in the clerk's office of the county where the property is situated. If such property is situated in two or more counties, the notice of lien shall be filed in the office of the clerk of each of such counties. The county clerk of each county shall provide and keep a book to be called the "lien docket," which shall be suitably ruled in columns headed "owners," "lienors," "lienor's attorney," "property," "amount," "time of filing," "proceedings had," in each of which he shall enter the particulars of the notice, properly belonging therein. The date, hour and minute of the filing of each notice of lien shall be entered in the proper column. Except where the county clerk maintains a block index, the names of the owners shall be arranged in such book in alphabetical order. The validity of the lien and the right to file a notice thereof shall not be affected by the death of the owner before notice of the lien is filed. A notice of employee's lien on personal property must be filed, together with a financing statement, in the filing office as set forth in section 9-501 of the uniform commercial code.
§ 7. Section 11 of the lien law, as amended by chapter 147 of the laws of 1996, is amended to read as follows:
§ 11. Service of copy of notice of lien. 1. Within five days before or thirty days after filing the notice of a mechanic's lien, the lienor shall serve a copy of such notice upon the owner, if a natural person, (a) by delivering the same to him personally, or if the owner cannot be found, to his agent or attorney, or (b) by leaving it at his last known
S. 7256 5
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the lien law, in relation to employee liens; to amend the labor law, in relation to employee complaints; to amend the civil practice law and rules, in relation to grounds for attachment; to amend the business corporation law, in relation to streamlining procedures where employees may hold shareholders of non-publicly traded corpo- rations personally liable for wage theft; and to amend the limited liability company law, in relation to creating a right for victims of wage theft to hold the ten members with the largest ownership interests in a company personally liable for wage theft
Purpose
This bill amends five sections of the law (Lien Law; Labor Law; Attach- ment under the Civil Practice Law and Rules; the Business Corporations Law; and the Limited Liability Company Law) to strengthen current laws to increase the likelihood that victims of "wage theft" will be able to secure payment of unpaid wages for work already performed from their employers.
Summary of provisions
Sections one through twenty-four amend the lien law to expand the mechanics' lien provisions and create an "employee's lien," that would provide a lien remedy for all employees, not just home improvement work- ers currently protected under the mechanics' lien provision. Sections twenty-five and twenty-six amend the labor law to ensure procedures used by the Department of Labor are consistent with procedures in the employ- ee's lien process. Sections twenty-seven through thirty-one amend the civil practice law and rules to create a new ground for attachment, allowing victims of wage theft to seek attachment of the employers' assets during the pendency of a court action. Sections thirty-two and thirty-three amend the business corporation law to streamline the proce- dures pursuant to which employees can hold the largest shareholders of non-publicly traded corporations personally liable for wage theft.
Sections thirty-four and thirty-five amend the limited liability company law to streamline the procedures pursuant to which employees can hold the ten members with the largest ownership interest in the company personally liable for wage theft.
Section thirty-six sets forth the effective date.
Justification
This bill is needed to increase the likelihood that victims of wage theft will be able to secure payment of wages due and owing from their employers. In too many instances, exploitative employers dissipate their assets or dissolve their business to avoid paying wages they owe to their employees. By the time workers have filed a lawsuit and are awarded a judgment, there are few, if any, assets to be found. By increasing the ability for workers to secure and collect the wages for work already performed, this bill strengthens the existing labor law provisions and the enforcement of such laws.
Prior legislative history
2018: S.579-Referred to Judiciary 2017: S.569-Referred to Judiciary
2016: S.2332-F-Amended and Commit to Judiciary
2015: S.2232-C Amend and Commit to Judiciary
2014: S.6658-Referred to Judiciary
Effective date
This act shall take effect on the thirtieth day after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.