The new New York State bill would allow employees making claims against their employer to obtain a lien against their employer‘s property. The bill would allow plaintiffs to seek an order of prejudgment attachment on employer‘s assets pursuant to Section 6210 of the New York CPLR and would require that the court hearing be within ten (10) days of the employer‘s opposition. The employees (or their agents) will have access to the minutes of a shareholder meeting and records of shareholders as related to their claims. Further, the potential personal liability would be expanded to include liquidated damages, penalties, interest, attorney‘s fees and costs as it is currently limited to the amount of unpaid wages.  If Governor Cuomo choses to sign the bill, it would go into effect thirty (30) days after becoming law.

The bill will apply specifically to claims involving non-payment of wages under federal Fair Labor Standards Act and New York Labor Law. These claims include minimum wage, overtime, spread of hours, call-in pay, uniform maintenance pay, withheld gratuities, unlawful deductions from wages, or improperly taken meal and tip credits. These claims may also include unpaid compensation pursuant to an employment contract.

If an employee were to make these claims, they would have the option to obtain an “employer‘s lien” against the employer‘s interest in any real property or personal property. This property does not include deposit accounts or goods as defined in Section 9-102 of the Uniform Commercial Code. The NYS Department of Labor or the State Attorney general will also have the ability to obtain these liens against an employer.

The notice of a lien may be filed at a maximum of three years following the end of the employment leading to the claim. If the employee were to obtain the lien, notice would need to be given five (5) days before or thirty (30) days after filing the lien notice. The notice would need to be served on the employer and also affixed to any real property identified in the lien. The lien would extend for up to one year following the notice filing unless an extension up to one year is timely filed or action is taken to enforce the lien.  The employer would have the ability to purchase a bond to discharge the lien at any point during this time.

If an action is not commenced to obtain judgment with regards to the claim or to foreclose the lien, the lien would be extinguished unless extended by a court order. Further, if the court should find that the employee intentionally exaggerated the amount of the lien, the lien would be discharged and the employee would be banned from obtaining another lien for the same claim.

Please do not hesitate to call our office to discuss how this may affect you.