Liens Against Companies and Executives for Unpaid Employee Wages?

Employment and Labor Law Tip of the Month

The New York State Legislature has passed a bill that, if signed into law, would allow current and former employees to obtain a lien against an employer’s real or personal property based merely on an allegation of underpayment of wages. Such an “employee lien” – which could be imposed not only against corporate entities, but personally against individuals, including managers, human resources personnel, and supervisors – would be in the amount of the perceived value of the employee’s wage claim, plus liquidated damages. The bill broadly defines what constitutes a “wage claim” for purposes of obtaining a lien, and encompasses, among other claims, any alleged violation of New York Labor Law §§ 652 or 673 (minimum wage), § 193 (improper deductions), and § 196-d (gratuities), as well as claims under §§ 206 and 207 of the Fair Labor Standards Act (minimum wage and overtime) and claims for breach of an employment contract where wages were allegedly unpaid under the contract. This potential new legislation dramatically increases the already-high stakes of wage and hour violations and emphasizes the importance of strict compliance with applicable wage and hour laws.

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