The below article appeared in the Maryland Association of Justice https://www.marylandassociationforjustice.com, Trial Reporter, Special Issue 2014, pp. 55-56, and authored by Lebau & Neuworth attoney Gregg H. Mosson*
Maryland’s Lien for Unpaid Wages Law, effective October 1, 2013, offers employees a new tool to obtain owed wages. The law enables employees to file liens for unpaid wages against employers’ property, by first sending notice of intent to do so. If the employer fails to respond within 30 days of service of that notice, the lien becomes established automatically. An unpaid wages lien, like any lien on real or personal property, asserts a right of payment, in the event of an asset sale, before a seller gets paid. Importantly, the law provides a new procedural mechanism to assert a claim for unpaid wages, compared to filing a complaint in court, with an administrative agency, or through sending a demand letter. Codified at Md. Lab. & Empl. Code Ann. §§ 3-1101 through 3-1110 (2013), the Law requires an employee to send, first, a notice to their employer alleging owed wages, with the intent to file a lien on real or personal property if the matter is not contested or resolved. Id. §3–1102. This lien notice provides an employer with a 30-day window to settle, or challenge the notice by filing a complaint in Maryland Circuit Court. Id. §3–1103. If the employer remains silent, the employee can record a lien against real or personal property any time after the 30-day notice period, and within the following 180 days. Id. §§3–1104(b), (d)(1), 1105. The employee becomes a secured creditor in the property under Maryland law, id. §3–1105(e)-(f), with all rights pertaining thereto. Id. §3–1106. Recording the lien is required to make it effective and secure a right of payment on an employer’s assets. See id. The Lien for Unpaid Wages Law combines the mechanism of a demand letter, with onus placed on employers to file rebuttals in court. In this manner, it shifts the burden of filing in court from claimant to employer. This mechanism may turn out to be more appealing to pro se workers than attorneys. Compared to the Maryland Wage and Hour Law and Maryland Wage Payment and Collection Law, the Lien for Unpaid Wages Law lacks statutory damages and a broad attorney’s fees provision. Attorney’s fees under the lien law only are awarded if, first, an employer contests the lien in court, and second, the employee prevails there. Id. §3–1103(e)(1). (On the other hand, an employer can obtain attorney’s fees and costs if dragged into court on frivolous allegations, id. (e)(2)). In addition, if an employer challenges a lien notice, the law creates an expedited process in Circuit Court for consideration of evidence within 45 days of the employer’s filing. Id. §3–1103(d)(1). The Law also excludes disputes over commissions from being the basis for any unpaid wages lien. Id. §3–1101(c)-(d). The Maryland Department of Labor, Licensing and Regulation (“DLLR”) has published template forms online for (1) the lien notice; (2) lien statement to be filed; and (3) employer response complaint, as of January 2014. You can find these forms at the DLLR Web page titled, “Maryland Lien for Unpaid Wages.” The new law borrows its legal structure from Maryland’s existing wage laws, and from Maryland’s common law and statutory liens, according to the bill’s Maryland Senate sponsor and other supporters. Hearing on Senate Bill 0758 Before the Senate Judicial Proceedings Comm., 2013 Leg., 433rd Sess.(Mar.13, 2013, at 1p.m.), available here (an audio recording). For instance, the Maryland Contract Lien Act has authorized contractual liens, for decades now, if a contract among parties expressly provides for such a lien right. Md. Real Prop. Code Ann. § 14-201 et seq. (2013) (see § 14-202). The Lien for Unpaid Wages Law, using the same language as the Maryland Wage and Hour Law (“MWHL”), authorizes action against a managing supervisor of the employee claiming owed wages as well as against the business for whom the employee works. Compare Md. Lab. & Empl. Code Ann. §3–1101(b) (2013), with id. § 3-401(b); see, e.g., Smith v. ABC Training Ctr. of Md., Inc., 2013 U.S. Dist. LEXIS 108088, 2013 WL 3984630 (D. Md. Aug. 1, 2013) (on MWHL and FLSA individual liability); Hurd v. NDL, Inc., 2012 U.S. Dist. LEXIS 26147, at *13-15, 2012 WL 642425 (D. Md. Feb. 27, 2012) (providing examples). In contrast, the Maryland Wage Payment and Collection Law (“MWPCL”) offers a definition of employer that does not permit supervisory liability, unless the supervisor has an equity stake in the business involved, or directly pays employees. Id. § 3-501(b); Campusano v. Lusitano Constr. LLC, 208 Md. App. 29, 41 (Md. Ct. Spec. App. 2012). The Lien for Unpaid Wages Law also responds to the rise of claims over unpaid wages in our prolonged recessionary economy. According to one national survey, overtime and minimum wage lawsuits under the U.S. Fair Labor Standards Act (“FLSA”) are up about 300% over the last decade, as of 2012. Yvonne Wenger, Wage Theft Prevails in Post-Recession Economy, Balt. Sun (Feb. 2, 2013) (available online). Low-wage workers, immigrant workers, and domestic workers are especially vulnerable to being so short-changed. Hearing on Senate Bill 0758, supra; accord Casa de Maryland, Wage Theft: How Maryland Fails to Protect the Rights of Low-Wage Workers (Jan. 2007) (Casa de Maryland, 2224 E. Fayette St., Balt., Md. 21231). The Law is designed to create a quicker process for employees seeking owed wages, whether through recording an established lien after a thirty-day notice period, or through an expedited court challenge if filed by the involved employer. The Public Justice Center located in Baltimore, Maryland will be conducting a series of trainings in 2014 on how to use the lien law for both attorneys and pro se workers, and is currently drafting educational materials on it. Other important facts: An employee’s right to pursue an unpaid wages lien cannot be waived through private contract. Md. Lab. & Empl. Code Ann.§3–1107 (2013). Lastly, while the Law requires the lien notice to be served within a three-year statute of limitations period, it is silent on whether the lien itself can assert a claim for all unpaid wages regardless of any limitation. See id. §3–1102(1) (incorporating Maryland’s general statute of limitations at Md. Cts. & Jud. Proc. Code Ann. §5-101). Conceivably, the lien notice may assert a right to all unpaid wages, but if the employer brings an action in court, the wage claim falls under applicable statutes of limitation from statutory and common law. Eventually, courts will let us know. The DLLR states on its Web site that it intends to issue further regulations. Cf. Md. Lab. & Empl. Code Ann. §3–1110 (2013) (authorizing regulatory authority). As a practical matter, the DLLR has implemented the law’s proper name, for the statute lacks a defined title, though the statute defines the lien’s name. Id. § 3-1101 et seq.; SB 0758, 433rd Sess., at 2 (Apr. 2, 2013) (naming the lien and Code of Maryland subtitle). Stay tuned. *Gregg H. Mosson, Esq., is an associate attorney at the law firm of Lebau & Neuworth, LLC, in Towson, and works on employment discrimination, wage and hour, and disability law matters for employees and Social Security claimants. He is a 2012 Summa Cum Laude graduate of the University of Baltimore Law School, where he was also an associate editor of the Law Review. Prior to law school, he worked as a professional writer and teacher in secondary and higher education. **@*****ws.net.
