The General Assembly passed a law this session to help victims of fly-by-night or just plain crooked employers. The law (HB 1130/SB758) establishes a procedure for employees to place a wage lien on property of their employer for unpaid wages. Existing law permits an employee to file suit for unpaid wages and, if there is no bona fide dispute that the wages are owed, the court may award treble damages and attorneys’ fees to the employee. This system does not work efficiently for employers which simply withhold an employee’s last paycheck, or for employers who refuse to pay wages and then fold up shop, opening up under another name. In those cases, the stakes are too small to get legal representation, or the time necessary to get a judgment allows the dissipation of assets available to enforce it.
The new law allows an employee to provide written notice of a lien for unpaid wages, and the property, real or personal, sought to be encumbered. If the employer does not dispute the notice by filing in court in 30 days, or if the court orders the establishment of the lien, the employee can file the lien in a manner similar to a financing statement. The lien can then be enforced using judgment enforcement procedures.
This law is designed to make small wage claims easier to enforce; ideally, it will dissuade employers from refusing to turn over an employee’s last paycheck. It does not apply to commission claims. This exception must be the result of some political compromise, perhaps based on the idea that commissions are more hotly contested than wages for hours worked.