Stephen E. Tisman
In July, we reported that the New York State Legislature had passed a bill that could substantially alter the legal landscape of wage disputes by allowing employees with wage claims to file liens against their employers’ assets in the amount of the claim. The lien could be filed without any court order or determination of probable liability. The bill further permitted attachments of the employer’s property and would have expanded the personal liability of the 10 largest shareholders of non-public companies by making them liable not only for wages, but also for interest, penalties, liquidated damages, attorneys’ fees, and costs.
On January 1, 2020, anxious employers got a reprieve—albeit a temporary one—when Governor Cuomo vetoed the legislation.
While expressing strong support for the purpose of the bill—to ensure that assets are available so that workers can collect the wages they are owed—Governor Cuomo noted that the failure of the bill to require notice or judicial review before a lien is filed raised due process concerns; and the broad definition of “employer” included business entities, owners, and lower-level managers and subordinates who work for the business.
So, while disapproving this bill, Governor Cuomo pledged to introduce legislation with this year’s Executive Budget that would “follow constitutional minimums for due process” and “effectuate [the] intent…to have any victim of wage theft utilize any and all assets, even personal assets, of the bad actor to ensure satisfaction of judgments for victims.”
We will continue to follow this story as it unfolds in 2020. Employers are not out of the woods, yet!