The filing of a wage claim or the bringing of a wage claim action by a collective bargaining representative on behalf of an employee and the priority of a wage claim lien over a prior lien of a commercial lending institution and over the rights of a purchaser of any property of the employer

This bill increases that $3,000 cap to $4,500, eliminates that six-month time limit, and applies that cap to the aggregate of all prior liens of commercial lending institutions so that under the bill the first $4,500 of unpaid wages covered under a wage claim lien that are earned at any time takes precedence over the aggregate of all prior liens of commercial lending institutions.

The bill also requires the secretary of workforce development (secretary), at least once every five years or more frequently if DWD finds reasonable cause to believe that the cap should be adjusted, to appoint a wage claim lien review committee (committee) for the purpose of studying the need for an adjustment to the cap and making recommendations to the legislature for any adjustments to the cap.

In conducting that study and making those recommendations, the committee may consider any changes in the consumer price index and the effect that an adjustment to the cap might have on the economy of the state. The committee must submit a report of its recommendations, together with an explanation for those recommendations and any proposed legislation that may be necessary to implement those recommendations, to the secretary, the governor, the speaker of the assembly, the senate majority leader, and the minority leaders of each house of the legislature and to the standing committees of each house of the legislature that are concerned with labor issues and issues affecting financial institutions. Those standing committees must then review and conduct public hearings on those recommendations.

In addition, the bill provides that a wage claim lien takes precedence over the rights of any person that purchases any property of the employer after the lien is created, including any bona fide purchaser. This change reverses In Re Globe Building Materials, Inc., 463 F. 3d 631 (7th Cir. 2006), which held that the trustee in bankruptcy could avoid a wage claim lien because under the current wage claim lien law a wage claim does not expressly take precedence over the rights of a bona fide purchaser under the federal bankruptcy law.

Finally, the bill permits a recognized or certified collective bargaining representative of an employee to file a wage claim with DWD, or to bring a wage claim action in court, on behalf of an employee and grants a wage claim lien to a collective bargaining representative that brings a wage claim action.