Bill Text: IL HB2351 | 2017-2018 | 100th General Assembly | Introduced


Bill Title: Creates the Wage Lien Act. Provides that a lien exists on an employer's property for the amount of unpaid wages owed to an employee. Defines terms and includes provisions concerning creation of the lien; exemptions; notice; limitations; recording of the lien; enforcement; other claims on the employer's property; successor obligations; and construction.

Spectrum: Partisan Bill (Democrat 18-0)

Status: (Introduced) 2017-04-25 - State Mandates Fiscal Note Filed [HB2351 Detail]

Download: Illinois-2017-HB2351-Introduced.html


100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB2351

Introduced , by Rep. Barbara Flynn Currie

SYNOPSIS AS INTRODUCED:
New Act

Creates the Wage Lien Act. Provides that a lien exists on an employer's property for the amount of unpaid wages owed to an employee. Defines terms and includes provisions concerning creation of the lien; exemptions; notice; limitations; recording of the lien; enforcement; other claims on the employer's property; successor obligations; and construction.
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FISCAL NOTE ACT MAY APPLY

A BILL FOR

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1 AN ACT concerning employment.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the Wage
5Lien Act.
6 Section 5. Definitions. As used in this Act:
7 "Claimant" means an individual attempting to establish a
8wage lien.
9 "Department" means the Illinois Department of Labor.
10 "Director" means the Director of the Illinois Department of
11Labor.
12 "Employee" includes any individual permitted to work by an
13employer in an occupation, but does not include any individual:
14 (1) who has been and will continue to be free from
15 control and direction over the performance of his or her
16 work, both under his or her contract of service with his or
17 her employer and in fact; and
18 (2) who performs work which is either outside the usual
19 course of business or is performed outside all of the
20 places of business or is performed outside all of the
21 places of business of the employer unless the employer is
22 in the business of contracting with third parties for the
23 placement of employees; and

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1 (3) who is in an independently established trade,
2 occupation, profession, or business.
3 "Employer" includes any individual, partnership,
4association, corporation, limited liability company, business
5trust, and employment and labor placement agency where wage
6payments are made directly or indirectly by the agency or
7business for work undertaken by employees under hire to a third
8party, or any person or group of persons acting directly or
9indirectly in the interest of an employer in relation to an
10employee, for which one or more persons is gainfully employed.
11 "Employer payments" means all earned wages by direct
12employees or employees working under hire of a third party
13working for the employer.
14 "Wage claim" means an employee's claim with the Illinois
15Department of Labor against an employer for wages, penalties,
16or damages provided by law to employees with a claim for unpaid
17wages.
18 "Wages" means any compensation owed an employee by an
19employer for:
20 (I) labor and services rendered by an employee; and
21 (II) vacation pay, holiday pay, sick leave pay,
22 parental leave pay, or severance pay pursuant to an
23 employment contract or agreement.
24 Section 10. Wage lien.
25 (a) An employee has a lien on all property of the employer

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1in this State, including after-acquired property, for the full
2amount of any wages, penalties, and interest owed to the
3employee.
4 (b) If the employer is a natural person, a lien under this
5Section applies to the employer's principal residence.
6 (c) The amount of the lien under this Section includes
7unpaid wages and other compensation required by law, penalties
8available under law, including liquidated damages, interest at
9the same rate as for prejudgment interest in this State, and
10the costs of filing and service of the lien. The amount of
11compensation that may be claimed as a lien under this Section
12includes all wages due to the employee either by agreement or
13as required by law, including wages and compensation required
14to be paid by an employer to third persons or entities that
15would qualify as employer payments.
16 (d) An employee's lien upon personal property is limited to
17property subject to a security interest under the Uniform
18Commercial Code pursuant to the filing of a financing statement
19with the Secretary of State.
20 (e) Any action authorized or required by this Act with
21regard to an employee may also be undertaken by any person or
22entity, including any governmental agency, to which a portion
23of an employer's compensation is payable, that has standing
24under applicable law to maintain a direct legal action on
25behalf of the employee to collect any portion of compensation
26owed to the employee, or that is authorized by the employee to

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1act on the employee's behalf.
2 (f) No lien described in this Section is defeated because
3of an error or overcharging on the part of any person claiming
4a lien under this Act.
5 (g) A lien pursuant to this Section is in addition to any
6other lien rights held by the employee and shall not be
7construed to limit those rights.
8 Section 15. Surety. The lien described in this Act shall
9not attach if the employer has obtained a surety bond or
10insurance that provides for payment of the wages and other
11compensation, penalties, and interest claimed by the employee
12and is in an amount that is adequate to fully satisfy the
13employee's claim. If the surety bond or insurance contract is
14inadequate to cover the entire amount of the employee's claim,
15the lien is limited to the amount of the claim that exceeds the
16bond or insurance coverage. Within 30 days of being provided
17with proof of a valid surety bond or insurance contract that
18applies to the claim, the employee shall file a release of any
19lien recorded or a notice reducing the lien to the amount that
20exceeds the bond or insurance coverage.
21 Section 20. Notice.
22 (a) At least 5 days prior to recording a notice of lien
23with a county recorder pursuant to Section 30 or filing a
24notice of lien with the Secretary of State pursuant to Section

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135, the employee shall provide the owner or reputed owner of
2the property against which the lien is to be recorded
3preliminary written notice of the intent to record a notice of
4lien.
5 (b) Notice under this Section includes the following:
6 (1) All of the information required by subsection (b)
7 of Section 30 in the case of a lien on real property or
8 subsection (b) of Section 35 in the case of a lien on
9 personal property, to the extent known to the person giving
10 notice.
11 (2) The following statement in boldface type: "NOTICE
12 TO THE EMPLOYER. If the claimant is not paid in full for
13 work performed in your employ, a lien may be placed on your
14 property after a period of 5 calendar days after this
15 notice was served. Foreclosure of the lien may lead to loss
16 of all or part of your property. You may wish to protect
17 yourself against this loss by either: (i) ensuring that the
18 claimant is paid in full for work performed in your employ;
19 or (ii) taking any other appropriate actions to resolve the
20 matter under the circumstances. This notice is required by
21 law to be served by the undersigned as a statement of your
22 legal rights."
23 (c) Notice is not invalid by reason of any variance from
24the requirements of this Section if the notice is sufficient to
25substantially inform the person given notice of the information
26required by this Section and other information required in the

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1notice.
2 (d) Service of the notice required by this Section shall be
3by the means described in subsection (c) of Section 30 in the
4case of a lien on real property or subsection (c) of Section 35
5in the case of a lien on personal property and shall be deemed
6to have been given 3 business days after the mailing of the
7notice.
8 Section 25. Limitations.
9 (a) A lien described in this Act shall be permanently
10extinguished unless a notice of lien in accordance with Section
1130 or 35 is recorded or filed and is served upon the employer
12within 3 years of the date that the employee ceased working for
13the employer or the violation occurred. A lien described in
14this Act shall also be permanently extinguished as to property
15that is transferred or sold by the employer, unless a notice of
16lien was recorded or filed before the transfer or sale in
17accordance with Section 30 or 35.
18 (b) The employee shall commence an action to enforce the
19lien and prove the amount owed within 180 days of the date of
20filing or recording of the notice of lien. If the employee does
21not commence an action to enforce the lien within that time,
22the lien shall be permanently extinguished and is
23unenforceable. The employee and the owner of the property
24subject to the lien may agree to extend the time for enforcing
25the lien in writing. An extension and its terms must be

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1recorded prior to the expiration of the time for commencing an
2action to enforce the lien. If the employee does not commence
3an action to enforce the lien within the extended time period,
4the lien shall be permanently extinguished and is
5unenforceable.
6 (c) If the lien has been extinguished pursuant to
7subsection (a) or (b), upon demand and 15 days' notice by the
8employer or any affected party, the employee shall record or
9file a release of the lien. If an employee fails to file a
10release of the lien after the proper notice has been mailed to
11the employee's address as indicated on the notice of the lien,
12the employer or affected party may petition the court for an
13order releasing the lien.
14 Section 30. Real property.
15 (a) With regard to a lien on real property under this Act,
16the employee or the Department shall record a notice of lien
17with the county recorder in the county where the real property
18is located. The employee or the Department is responsible for
19paying any fees associated with the recording of a notice of
20lien. The cost of recording a notice of lien shall be added to
21the amount of the lien.
22 (b) The notice of lien shall be certified as provided in
23Section 1-109 of the Code of Civil Procedure and include all of
24the following:
25 (1) A statement of the employee's demand for payment of

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1 the wages and other compensation, penalties, and interest.
2 The statement shall specify the amount owed to the
3 employee, and if the amount is estimated, shall provide an
4 explanation for the basis of the estimate.
5 (2) A general statement of the kind of work furnished
6 by the employee and the dates of employment.
7 (3) The name of the person or entity by whom the
8 employee was employed.
9 (4) The employee's mailing address.
10 (c) The employee or Department shall serve the notice of
11lien on the employer owner of the real property subject to the
12lien by registered mail, certified mail, or first-class mail,
13evidenced by a certificate of mailing, postage prepaid,
14addressed to the employer at the employer's residence or place
15of business.
16 (d) The lien attaches to all real property owned by the
17employer at the time of the filing of the notice of lien, or
18that is subsequently acquired by the employer, that is located
19in any county in which the notice is recorded, regardless of
20whether the property is identified in the notice of lien.
21 Section 35. Personal property.
22 (a) With regard to a lien on personal property under this
23Act, the employee or the Department shall file a notice of lien
24with the Secretary of State. Except as otherwise provided in
25this Act, the manner, form, and place of filing shall be as

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1described in the Uniform Commercial Code. The notice of the
2lien shall be placed in the same file as financing statements
3pursuant to Section 9-522 of the Uniform Commercial Code. The
4employee or the Department is responsible for paying any fees
5associated with the recording of a notice of lien. The cost of
6recording a notice of lien shall be added to the amount of the
7lien.
8 (b) This notice shall be certified as provided in Section
91-109 of the Code of Civil Procedure and shall state the
10following:
11 (1) A statement of the employee's demand for payment of
12 the wages and other compensation, penalties, and interest.
13 The statement shall specify the amount owed to the
14 employee, and if the amount is estimated, shall provide an
15 explanation for the basis of the estimate.
16 (2) A general statement of the kind of work furnished
17 by the employee and the dates of employment.
18 (3) The name of the person by whom the employee was
19 employed.
20 (4) The employee's mailing address.
21 (5) To the extent known, a description of the property
22 on which the lien exists.
23 (c) The employee or Department shall serve the notice of
24lien on the employer of the property subject to the lien by
25registered mail, certified mail or first-class mail, as
26evidenced by a certificate of mailing, postage prepaid,

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1addressed to the employer at the employer's residence or place
2of business.
3 (d) Regardless of whether the property is specifically
4described in the notice, the lien attaches to all personal
5property that is owned by the employer at the time of the
6filing of the notice of lien, or that is subsequently acquired
7by the employer, that can be made subject to a security
8interest under the Uniform Commercial Code.
9 Section 40. Enforcement of lien.
10 (a) In order to enforce a lien under this Act, the employee
11shall demonstrate in a civil action, in an administrative
12proceeding under Section 12 of the Minimum Wage Law, Section 11
13of the Illinois Wage Payment and Collection Act, Section 11 of
14the Prevailing Wage Act, Section 55 of the Day and Temporary
15Labor Services Act, or Section 25 of the Employee
16Classification Act, or as otherwise provided by law, that he or
17she is owed wages or other compensation and any related
18penalties and interest.
19 (b) If the employee chooses to pursue the wage claim in a
20civil action, if a notice of lien is recorded or filed under
21Section 30 or 35 prior to an administrative hearing, the action
22shall also be deemed an action to enforce the lien and
23foreclose upon any property subject to the recorded lien. The
24employee is entitled to court costs and reasonable attorney's
25fees for filing a successful action to enforce a lien pursuant

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1to this Section. In the judgment resulting from the action, the
2court may order the sale at a sheriff's auction or the transfer
3to the plaintiff of title or possession of any property subject
4to the lien. Regardless of whether the court makes an order as
5part of the judgment, any property subject to the lien may be
6foreclosed upon at any point after a judgment for wages is
7issued.
8 (c) If the employee chooses to pursue the wage claim in an
9administrative proceeding before the Department of Labor
10pursuant to Section 12 of the Minimum Wage Law, Section 11 of
11the Illinois Wage Payment and Collection Act, Section 11 of the
12Prevailing Wage Act, Section 55 of the Day and Temporary Labor
13Services Act, or Section 25 of the Employee Classification Act,
14if no lien has been recorded at the time the administrative
15claim is filed, the Director may provide the notice and record
16the lien on behalf of the employee. If a notice of lien is
17recorded or filed under Section 30 or 35 prior to an
18administrative hearing, the action shall also be deemed an
19action to enforce the lien.
20 (d) An administrative decision under Section 12 of the
21Minimum Wage Law, Section 11 of the Illinois Wage Payment and
22Collection Act, Section 11 of the Prevailing Wage Act, Section
2355 of the Day and Temporary Labor Services Act, or Section 25
24of the Employee Classification Act is a binding and final
25decision as to the underlying wage claim. The decision is also
26binding and final as to the enforcement of the lien and any

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1property subject to the lien may be foreclosed upon in court,
2either by the employee or the Director, at any point after an
3administrative decision for wages is issued.
4 (e) If judgment is entered against the employee in the
5action to enforce the lien or if the case is dismissed with
6prejudice, the lien shall be extinguished. The judgment shall
7include the date the notice of lien was recorded and, to the
8extent applicable, the county in which it was recorded, the
9book and page or series number of the place in the legal
10records in which the lien was recorded, and a legal description
11of the property to which the lien is attached. The judgment may
12be appealed by filing a notice of appeal on or before 30 days
13after the entry of judgment. If an appeal is filed, the lien
14shall continue in force until all issues on the appeal have
15been decided. If the period for appeal runs without an appeal
16having being filed, or if the appeal fails, the judgment
17entered under this Section shall be equivalent to cancellation
18of the lien and its removal from the record. A judgment entered
19pursuant to this subsection is a recordable instrument. Upon
20recordation of a certified copy of the judgment, the property
21described in the judgment is released from the lien.
22Alternatively, if the lien is extinguished, upon demand and 15
23days' notice by the property owner, the employee shall file a
24release of the lien. If an employee refuses to file a release
25of the lien after proper notice, an employer or property owner
26may petition the court for an order to file a release of the

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1lien.
2 (g) Any number of claims to enforce employee liens against
3the same employer may be joined in a single proceeding. If the
4proceeds of the sale of the property subject to the lien are
5insufficient to pay all the claimants, regardless of whether
6the claims have been joined together, the court shall order the
7claimants to be paid in proportion to the amount due each
8claimant.
9 Section 45. Other claims; exceptions.
10 (a) After an employee has filed a civil action, the
11employee shall have a lien upon all property of the employer,
12real or personal, including after-acquired property, located
13in this State for the full amount of any wage claim. The
14employee also has a lien upon the real property of the
15individual employer or employers.
16 (b) After an employee has filed a wage claim with the
17Department, the employee or the Department shall have a lien
18upon all property of the employer, real or personal, including
19after-acquired property, located in this State for the full
20amount of any wage claim. The employee or the Department shall
21also have a lien upon the real property of the individual
22employer.
23 Section 50. Other claims. A lien under this Act takes
24precedence over all other debts, judgments, decrees, liens, or

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1mortgages against the employer, regardless of whether those
2other debts, judgments, decrees, liens, or mortgages originate
3before or after the lien under takes effect.
4 Section 55. Successor obligations. Whenever any employer
5quits, sells, exchanges, or otherwise disposes of the
6employer's business or stock of goods, any person who becomes a
7successor to the business becomes liable for the full amount of
8any of any recorded or filed notice of lien under this Act if,
9at the time of the conveyance of the business, the successor
10has: (1) actual knowledge of the fact and amount of the
11recorded or filed notice of lien, or (2) a prompt, reasonable,
12and effective means of accessing and verifying the fact and
13amount of the recorded or filed notice of lien. If the amount
14of the recorded or filed notice of lien is not paid in full by
15the employer within 10 days of the date of the sale, exchange,
16or disposal, the successor is liable for the payment of the
17full amount of the lien.
18 Section 60. Construction. This Act is and shall be
19liberally construed as a remedial Act.
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