Full Text of HB4324 100th General Assembly
HB4324 100TH GENERAL ASSEMBLY |
| | 100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018 HB4324 Introduced , by Rep. Emanuel Chris Welch SYNOPSIS AS INTRODUCED: |
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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,
| 3 | | represented in the General Assembly:
| 4 | | Section 1. Short title. This Act may be cited as the Wage | 5 | | Lien Act. | 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.
| 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.
| 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.
| 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.
| 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.
| 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. | 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. | 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. | 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.
| 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.
| 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.
| 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.
| 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:
| 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 | 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. | 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. | 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.
| 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. | 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. | 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. | 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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