Bill Text: IL HB4324 | 2017-2018 | 100th General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
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 53-0)
Status: (Failed) 2019-01-08 - Session Sine Die [HB4324 Detail]
Download: Illinois-2017-HB4324-Introduced.html
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 53-0)
Status: (Failed) 2019-01-08 - Session Sine Die [HB4324 Detail]
Download: Illinois-2017-HB4324-Introduced.html
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1 | AN ACT concerning employment.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the Wage | ||||||||||||||||||||||||
5 | Lien Act.
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6 | Section 5. Definitions. As used in this Act: | ||||||||||||||||||||||||
7 | "Claimant" means an individual attempting to establish a | ||||||||||||||||||||||||
8 | wage lien. | ||||||||||||||||||||||||
9 | "Department" means the Illinois Department of Labor. | ||||||||||||||||||||||||
10 | "Director" means the Director of the Illinois Department of | ||||||||||||||||||||||||
11 | Labor.
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12 | "Employee" includes any individual permitted to work by an | ||||||||||||||||||||||||
13 | employer 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.
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3 | "Employer" includes any individual, partnership, | ||||||
4 | association, corporation, limited liability company, business | ||||||
5 | trust, and employment and labor placement agency where wage | ||||||
6 | payments are made directly or indirectly by the agency or | ||||||
7 | business for work undertaken by employees under hire to a third | ||||||
8 | party, or any person or group of persons acting directly or | ||||||
9 | indirectly in the interest of an employer in relation to an | ||||||
10 | employee, for which one or more persons is gainfully employed. | ||||||
11 | "Employer payments" means all earned wages by direct | ||||||
12 | employees or employees working under hire of a third party | ||||||
13 | working for the employer.
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14 | "Wage claim" means an employee's claim with the Illinois | ||||||
15 | Department of Labor against an employer for wages, penalties, | ||||||
16 | or damages provided by law to employees with a claim for unpaid | ||||||
17 | wages. | ||||||
18 | "Wages" means any compensation owed an employee by an | ||||||
19 | employer for: | ||||||
20 | (1) labor and services rendered by an employee; and | ||||||
21 | (2) vacation pay, holiday pay, sick leave pay, parental | ||||||
22 | leave pay, or severance pay pursuant to an employment | ||||||
23 | contract or agreement.
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24 | Section 10. Wage lien. | ||||||
25 | (a) An employee has a lien on all property of the employer |
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1 | in this State, including after-acquired property, for the full | ||||||
2 | amount of any wages, penalties, and interest owed to the | ||||||
3 | employee.
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4 | (b) If the employer is a natural person, a lien under this | ||||||
5 | Section applies to the employer's principal residence. | ||||||
6 | (c) The amount of the lien under this Section includes | ||||||
7 | unpaid wages and other compensation required by law, penalties | ||||||
8 | available under law, including liquidated damages, interest at | ||||||
9 | the same rate as for prejudgment interest in this State, and | ||||||
10 | the costs of filing and service of the lien. The amount of | ||||||
11 | compensation that may be claimed as a lien under this Section | ||||||
12 | includes all wages due to the employee either by agreement or | ||||||
13 | as required by law, including wages and compensation required | ||||||
14 | to be paid by an employer to third persons or entities that | ||||||
15 | would qualify as employer payments. | ||||||
16 | (d) An employee's lien upon personal property is limited to | ||||||
17 | property subject to a security interest under the Uniform | ||||||
18 | Commercial Code pursuant to the filing of a financing statement | ||||||
19 | with the Secretary of State. | ||||||
20 | (e) Any action authorized or required by this Act with | ||||||
21 | regard to an employee may also be undertaken by any person or | ||||||
22 | entity, including any governmental agency, to which a portion | ||||||
23 | of an employer's compensation is payable, that has standing | ||||||
24 | under applicable law to maintain a direct legal action on | ||||||
25 | behalf of the employee to collect any portion of compensation | ||||||
26 | owed to the employee, or that is authorized by the employee to |
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1 | act on the employee's behalf. | ||||||
2 | (f) No lien described in this Section is defeated because | ||||||
3 | of an error or overcharging on the part of any person claiming | ||||||
4 | a lien under this Act. | ||||||
5 | (g) A lien pursuant to this Section is in addition to any | ||||||
6 | other lien rights held by the employee and shall not be | ||||||
7 | construed to limit those rights.
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8 | Section 15. Surety. The lien described in this Act shall | ||||||
9 | not attach if the employer has obtained a surety bond or | ||||||
10 | insurance that provides for payment of the wages and other | ||||||
11 | compensation, penalties, and interest claimed by the employee | ||||||
12 | and is in an amount that is adequate to fully satisfy the | ||||||
13 | employee's claim. If the surety bond or insurance contract is | ||||||
14 | inadequate to cover the entire amount of the employee's claim, | ||||||
15 | the lien is limited to the amount of the claim that exceeds the | ||||||
16 | bond or insurance coverage. Within 30 days of being provided | ||||||
17 | with proof of a valid surety bond or insurance contract that | ||||||
18 | applies to the claim, the employee shall file a release of any | ||||||
19 | lien recorded or a notice reducing the lien to the amount that | ||||||
20 | exceeds the bond or insurance coverage.
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21 | Section 20. Notice. | ||||||
22 | (a) At least 5 days prior to recording a notice of lien | ||||||
23 | with a county recorder pursuant to Section 30 or filing a | ||||||
24 | notice of lien with the Secretary of State pursuant to Section |
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1 | 35, the employee shall provide the owner or reputed owner of | ||||||
2 | the property against which the lien is to be recorded | ||||||
3 | preliminary written notice of the intent to record a notice of | ||||||
4 | lien. | ||||||
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 | ||||||
24 | the requirements of this Section if the notice is sufficient to | ||||||
25 | substantially inform the person given notice of the information | ||||||
26 | required by this Section and other information required in the |
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1 | notice. | ||||||
2 | (d) Service of the notice required by this Section shall be | ||||||
3 | by the means described in subsection (c) of Section 30 in the | ||||||
4 | case of a lien on real property or subsection (c) of Section 35 | ||||||
5 | in the case of a lien on personal property and shall be deemed | ||||||
6 | to have been given 3 business days after the mailing of the | ||||||
7 | notice.
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8 | Section 25. Limitations. | ||||||
9 | (a) A lien described in this Act shall be permanently | ||||||
10 | extinguished unless a notice of lien in accordance with Section | ||||||
11 | 30 or 35 is recorded or filed and is served upon the employer | ||||||
12 | within 3 years of the date that the employee ceased working for | ||||||
13 | the employer or the violation occurred. A lien described in | ||||||
14 | this Act shall also be permanently extinguished as to property | ||||||
15 | that is transferred or sold by the employer, unless a notice of | ||||||
16 | lien was recorded or filed before the transfer or sale in | ||||||
17 | accordance with Section 30 or 35.
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18 | (b) The employee shall commence an action to enforce the | ||||||
19 | lien and prove the amount owed within 180 days of the date of | ||||||
20 | filing or recording of the notice of lien. If the employee does | ||||||
21 | not commence an action to enforce the lien within that time, | ||||||
22 | the lien shall be permanently extinguished and is | ||||||
23 | unenforceable. The employee and the owner of the property | ||||||
24 | subject to the lien may agree to extend the time for enforcing | ||||||
25 | the lien in writing. An extension and its terms must be |
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1 | recorded prior to the expiration of the time for commencing an | ||||||
2 | action to enforce the lien. If the employee does not commence | ||||||
3 | an action to enforce the lien within the extended time period, | ||||||
4 | the lien shall be permanently extinguished and is | ||||||
5 | unenforceable.
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6 | (c) If the lien has been extinguished pursuant to | ||||||
7 | subsection (a) or (b), upon demand and 15 days' notice by the | ||||||
8 | employer or any affected party, the employee shall record or | ||||||
9 | file a release of the lien. If an employee fails to file a | ||||||
10 | release of the lien after the proper notice has been mailed to | ||||||
11 | the employee's address as indicated on the notice of the lien, | ||||||
12 | the employer or affected party may petition the court for an | ||||||
13 | order releasing the lien.
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14 | Section 30. Real property. | ||||||
15 | (a) With regard to a lien on real property under this Act, | ||||||
16 | the employee or the Department shall record a notice of lien | ||||||
17 | with the county recorder in the county where the real property | ||||||
18 | is located. The employee or the Department is responsible for | ||||||
19 | paying any fees associated with the recording of a notice of | ||||||
20 | lien. The cost of recording a notice of lien shall be added to | ||||||
21 | the amount of the lien.
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22 | (b) The notice of lien shall be certified as provided in | ||||||
23 | Section 1-109 of the Code of Civil Procedure and include all of | ||||||
24 | the following:
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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.
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5 | (2) A general statement of the kind of work furnished | ||||||
6 | by the employee and the dates of employment.
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7 | (3) The name of the person or entity by whom the | ||||||
8 | employee was employed.
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9 | (4) The employee's mailing address.
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10 | (c) The employee or Department shall serve the notice of | ||||||
11 | lien on the employer owner of the real property subject to the | ||||||
12 | lien by registered mail, certified mail, or first-class mail, | ||||||
13 | evidenced by a certificate of mailing, postage prepaid, | ||||||
14 | addressed to the employer at the employer's residence or place | ||||||
15 | of business. | ||||||
16 | (d) The lien attaches to all real property owned by the | ||||||
17 | employer at the time of the filing of the notice of lien, or | ||||||
18 | that is subsequently acquired by the employer, that is located | ||||||
19 | in any county in which the notice is recorded, regardless of | ||||||
20 | whether the property is identified in the notice of lien.
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21 | Section 35. Personal property. | ||||||
22 | (a) With regard to a lien on personal property under this | ||||||
23 | Act, the employee or the Department shall file a notice of lien | ||||||
24 | with the Secretary of State. Except as otherwise provided in | ||||||
25 | this Act, the manner, form, and place of filing shall be as |
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1 | described in the Uniform Commercial Code. The notice of the | ||||||
2 | lien shall be placed in the same file as financing statements | ||||||
3 | pursuant to Section 9-522 of the Uniform Commercial Code. The | ||||||
4 | employee or the Department is responsible for paying any fees | ||||||
5 | associated with the recording of a notice of lien. The cost of | ||||||
6 | recording a notice of lien shall be added to the amount of the | ||||||
7 | lien. | ||||||
8 | (b) This notice shall be certified as provided in Section | ||||||
9 | 1-109 of the Code of Civil Procedure and shall state the | ||||||
10 | following: | ||||||
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 | ||||||
24 | lien on the employer of the property subject to the lien by | ||||||
25 | registered mail, certified mail or first-class mail, as | ||||||
26 | evidenced by a certificate of mailing, postage prepaid, |
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1 | addressed to the employer at the employer's residence or place | ||||||
2 | of business. | ||||||
3 | (d) Regardless of whether the property is specifically | ||||||
4 | described in the notice, the lien attaches to all personal | ||||||
5 | property that is owned by the employer at the time of the | ||||||
6 | filing of the notice of lien, or that is subsequently acquired | ||||||
7 | by the employer, that can be made subject to a security | ||||||
8 | interest under the Uniform Commercial Code.
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9 | Section 40. Enforcement of lien. | ||||||
10 | (a) In order to enforce a lien under this Act, the employee | ||||||
11 | shall demonstrate in a civil action, in an administrative | ||||||
12 | proceeding under Section 12 of the Minimum Wage Law, Section 11 | ||||||
13 | of the Illinois Wage Payment and Collection Act, Section 11 of | ||||||
14 | the Prevailing Wage Act, Section 55 of the Day and Temporary | ||||||
15 | Labor Services Act, or Section 25 of the Employee | ||||||
16 | Classification Act, or as otherwise provided by law, that he or | ||||||
17 | she is owed wages or other compensation and any related | ||||||
18 | penalties and interest. | ||||||
19 | (b) If the employee chooses to pursue the wage claim in a | ||||||
20 | civil action, if a notice of lien is recorded or filed under | ||||||
21 | Section 30 or 35 prior to an administrative hearing, the action | ||||||
22 | shall also be deemed an action to enforce the lien and | ||||||
23 | foreclose upon any property subject to the recorded lien. The | ||||||
24 | employee is entitled to court costs and reasonable attorney's | ||||||
25 | fees for filing a successful action to enforce a lien pursuant |
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1 | to this Section. In the judgment resulting from the action, the | ||||||
2 | court may order the sale at a sheriff's auction or the transfer | ||||||
3 | to the plaintiff of title or possession of any property subject | ||||||
4 | to the lien. Regardless of whether the court makes an order as | ||||||
5 | part of the judgment, any property subject to the lien may be | ||||||
6 | foreclosed upon at any point after a judgment for wages is | ||||||
7 | issued. | ||||||
8 | (c) If the employee chooses to pursue the wage claim in an | ||||||
9 | administrative proceeding before the Department of Labor | ||||||
10 | pursuant to Section 12 of the Minimum Wage Law, Section 11 of | ||||||
11 | the Illinois Wage Payment and Collection Act, Section 11 of the | ||||||
12 | Prevailing Wage Act, Section 55 of the Day and Temporary Labor | ||||||
13 | Services Act, or Section 25 of the Employee Classification Act, | ||||||
14 | if no lien has been recorded at the time the administrative | ||||||
15 | claim is filed, the Director may provide the notice and record | ||||||
16 | the lien on behalf of the employee. If a notice of lien is | ||||||
17 | recorded or filed under Section 30 or 35 prior to an | ||||||
18 | administrative hearing, the action shall also be deemed an | ||||||
19 | action to enforce the lien. | ||||||
20 | (d) An administrative decision under Section 12 of the | ||||||
21 | Minimum Wage Law, Section 11 of the Illinois Wage Payment and | ||||||
22 | Collection Act, Section 11 of the Prevailing Wage Act, Section | ||||||
23 | 55 of the Day and Temporary Labor Services Act, or Section 25 | ||||||
24 | of the Employee Classification Act is a binding and final | ||||||
25 | decision as to the underlying wage claim. The decision is also | ||||||
26 | binding and final as to the enforcement of the lien and any |
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1 | property subject to the lien may be foreclosed upon in court, | ||||||
2 | either by the employee or the Director, at any point after an | ||||||
3 | administrative decision for wages is issued. | ||||||
4 | (e) If judgment is entered against the employee in the | ||||||
5 | action to enforce the lien or if the case is dismissed with | ||||||
6 | prejudice, the lien shall be extinguished. The judgment shall | ||||||
7 | include the date the notice of lien was recorded and, to the | ||||||
8 | extent applicable, the county in which it was recorded, the | ||||||
9 | book and page or series number of the place in the legal | ||||||
10 | records in which the lien was recorded, and a legal description | ||||||
11 | of the property to which the lien is attached. The judgment may | ||||||
12 | be appealed by filing a notice of appeal on or before 30 days | ||||||
13 | after the entry of judgment. If an appeal is filed, the lien | ||||||
14 | shall continue in force until all issues on the appeal have | ||||||
15 | been decided. If the period for appeal runs without an appeal | ||||||
16 | having being filed, or if the appeal fails, the judgment | ||||||
17 | entered under this Section shall be equivalent to cancellation | ||||||
18 | of the lien and its removal from the record. A judgment entered | ||||||
19 | pursuant to this subsection is a recordable instrument. Upon | ||||||
20 | recordation of a certified copy of the judgment, the property | ||||||
21 | described in the judgment is released from the lien. | ||||||
22 | Alternatively, if the lien is extinguished, upon demand and 15 | ||||||
23 | days' notice by the property owner, the employee shall file a | ||||||
24 | release of the lien. If an employee refuses to file a release | ||||||
25 | of the lien after proper notice, an employer or property owner | ||||||
26 | may petition the court for an order to file a release of the |
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1 | lien. | ||||||
2 | (g) Any number of claims to enforce employee liens against | ||||||
3 | the same employer may be joined in a single proceeding. If the | ||||||
4 | proceeds of the sale of the property subject to the lien are | ||||||
5 | insufficient to pay all the claimants, regardless of whether | ||||||
6 | the claims have been joined together, the court shall order the | ||||||
7 | claimants to be paid in proportion to the amount due each | ||||||
8 | claimant.
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9 | Section 45. Other claims; exceptions. | ||||||
10 | (a) After an employee has filed a civil action, the | ||||||
11 | employee shall have a lien upon all property of the employer, | ||||||
12 | real or personal, including after-acquired property, located | ||||||
13 | in this State for the full amount of any wage claim. The | ||||||
14 | employee also has a lien upon the real property of the | ||||||
15 | individual employer or employers. | ||||||
16 | (b) After an employee has filed a wage claim with the | ||||||
17 | Department, the employee or the Department shall have a lien | ||||||
18 | upon all property of the employer, real or personal, including | ||||||
19 | after-acquired property, located in this State for the full | ||||||
20 | amount of any wage claim. The employee or the Department shall | ||||||
21 | also have a lien upon the real property of the individual | ||||||
22 | employer.
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23 | Section 50. Other claims. A lien under this Act as to the | ||||||
24 | first $30,000 of unpaid wages covered under the lien takes |
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1 | precedence over all other debts, judgments, decrees, liens, or | ||||||
2 | mortgages against the employer, regardless of whether those | ||||||
3 | other debts, judgments, decrees, liens, or mortgages originate | ||||||
4 | before or after the lien under takes effect.
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5 | Section 55. Successor obligations. Whenever any employer | ||||||
6 | quits, sells, exchanges, or otherwise disposes of the | ||||||
7 | employer's business or stock of goods, any person who becomes a | ||||||
8 | successor to the business becomes liable for the full amount of | ||||||
9 | any recorded or filed notice of lien under this Act if, at the | ||||||
10 | time of the conveyance of the business, the successor has: (1) | ||||||
11 | actual knowledge of the fact and amount of the recorded or | ||||||
12 | filed notice of lien, or (2) a prompt, reasonable, and | ||||||
13 | effective means of accessing and verifying the fact and amount | ||||||
14 | of the recorded or filed notice of lien. If the amount of the | ||||||
15 | recorded or filed notice of lien is not paid in full by the | ||||||
16 | employer within 10 days of the date of the sale, exchange, or | ||||||
17 | disposal, the successor is liable for the payment of the full | ||||||
18 | amount of the lien.
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19 | Section 60. Exemptions. No employer may by special contract | ||||||
20 | with employees or by any other means secure exemption from this | ||||||
21 | Section. Each employee shall have a right of action against any | ||||||
22 | employer for the full amount of the employee's wages due in any | ||||||
23 | court of competent jurisdiction.
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1 | Section 65. Construction. This Act is and shall be | ||||||
2 | liberally construed as a remedial Act.
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