New York Legislature Recently Passed a New Wage Theft Bill Designed to Increase Likelihood That Workers Can Secure Payment of Unpaid Wages for Work Already Performed
Senate Bill S2844B, which has been passed by both the Senate and the Assembly, amends several New York laws, including the Lien Law; Labor Law; Attachment under the Civil Practice Law and Rules; the Business Corporations Law; and the Limited Liability Law. A brief summary of its key provisions is provided below.
Employee Lien
Senate Bill S2844B amends New York’s lien law to expand the mechanics’ lien provisions and create an “employee’s lien” that would provide a lien remedy for all employees pursuing wage claims, not just home improvement workers currently protected under the existing law. The legislation defines a “wage claim” as any claim constituting a violation of New York Labor Law § 170 (overtime wage), § 193 (deductions from wages), § 196-d (gratuities), or § 652 and § 673 (minimum wage). Wage claims also include claims arising from employment contract breaches, as well as federal minimum wage claims under 29 U.S.C. § 206 and § 207.
Under the bill, workers alleging wage theft would be able to seek attachment of their employers’ assets during the pendency of a court action for the value of the employee’s wage claim, including liquidated damages. Employees may pursue a lien against the employer’s real property or personal that can be sufficiently described pursuant to Section 9-108 of the Uniform Commercial Code (UCC). The bill contains an exception for an employer’s deposit accounts and goods.
The Securing Wages Earned Against Theft Bill provides that the Department of Labor and the Attorney General may obtain an employee’s lien for the value of the wage claims of employees who are the subjects of their investigations, court actions or administrative agency actions.
The bill imposes a number of procedural requirements. Notice of an employee’s lien must be filed no later than three years following the end of the employment giving rise to the wage claim. With regard to real property, notice must be filed in the clerk’s office of the county where the property is located. When seeking to attach personal property, notice must be filed with a financing statement pursuant to section 9-501 of the UCC. Absent an extension, all liens would last for one year.
Personal Liability for Unpaid Wages
New York law already provides that the ten largest members of a limited liability company (LLC) and shareholders of an unlisted corporation can be held personally liable, jointly and severally, for all debts, wages, and salaries due and owing to a business’s employees.
The Securing Wages Earned Against Theft Bill streamlines the procedures for employees to pursue personal liability for alleged wage theft. The legislation would give the employees of a corporation the right to inspect its books and records to obtain the names, addresses, and value of shareholders’ interests in the corporation. Senate Bill S2844B would similarly amend New York’s limited liability company law to create a similar right to inspect an LLC’s records.
What’s Next?
The bill now heads to Governor Andrew Cuomo’s desk. If the Governor signs the bill into law, it will take effect 30 days later. The procedures and rights created in the law may be used in connection with claims for liabilities that arose prior to the effective date.
If you have any questions or if you would like to discuss the matter further, please contact me, Scott Heck, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
Eviction Is Not Always the End: Understanding Post-Possession Rent Claims in New Jersey and New York
No. An eviction does not automatically end a tenant’s obligation to pay rent. Post-eviction rent claims are common because recovering possession resolves who has the right to occupy the premises, but it does not extinguish the tenant’s contractual obligations under the lease. Whether unpaid or future rent remains owed depends on three factors: the lease’s […]
Company Dissolved? Legal and Financial Consequences to Expect
A company is dissolved; legally, it ceases to exist. Accordingly, dissolution results in significant legal and financial consequences. It is a process that must be properly managed to avoid continuing liability. The Corporate Dissolution Process Corporate dissolution is the legal process of formally closing a corporation, paying its debts and distributing the remaining assets. Most […]
The Legal Implications of Signing a Triple Net Lease
A triple net lease is a commercial lease in which the tenant pays the property’s real estate taxes, insurance, and maintenance costs, known as the three nets, in addition to base rent. They are most often used in freestanding retail and office buildings and in large single-tenant industrial properties, with terms that typically run 10 […]
When to Settle and When to Fight: A Litigator's Framework
Every lawsuit comes with a cost, and knowing when to settle a lawsuit is one of the most consequential decisions a business owner will face. Experienced litigators understand how to minimize cost and obtain certainty for their clients. For many business owners, the decision is viewed almost entirely through a financial lens: What will it cost […]
A corporate attorney advises businesses on formation, ownership, governance, contracts, transactions, compliance, disputes, and the legal risks that arise as a company grows. The role is not limited to filing documents or reviewing agreements. A corporate attorney helps a business understand when a commercial decision has legal consequences, how to structure that decision properly, and […]
A Whistleblower Just Filed a Complaint Against Your Company: Here's What to Do Now
Few situations create more uncertainty than learning that an employee has filed a whistleblower complaint. Questions arise immediately: Is the allegation legitimate? Should the employee be placed on leave? Do we need to notify our insurance carrier? Are we now prevented from disciplining the employee if there are unrelated ongoing work related issues? There is […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
