LRB-1413/1
GMM:kjf:jf
2009 - 2010 LEGISLATURE
February 12, 2009 - Introduced by Representatives Garthwaite, Sinicki, Berceau,
Black, Cullen, Grigsby, Hilgenberg, Jorgensen, Kessler, Mason, Parisi,
Richards, Soletski, Staskunas, Steinbrink, Toles, Turner, Van Akkeren,
Zepnick
and Bernard Schaber, cosponsored by Senators Lehman, Robson,
Hansen, Carpenter, Coggs, Decker, Erpenbach, Holperin, Kreitlow, Miller,
Plale, Taylor
and Wirch. Referred to Committee on Labor.
AB40,1,8 1An Act to repeal 109.09 (2) (c) 1., 109.09 (2) (c) 2. and 109.09 (2) (c) 3.; to
2renumber and amend
109.09 (2) (c) 1m.; and to amend 109.03 (5), 109.03 (6),
3109.09 (1), 109.09 (2) (a), 109.09 (2) (b) 1., 109.09 (2) (b) 2., 109.09 (2) (b) 3. and
4109.11 (2) (a) of the statutes; relating to: the filing of a wage claim or the
5bringing of a wage claim action by a collective bargaining representative on
6behalf of an employee and the priority of a wage claim lien over a prior lien of
7a commercial lending institution and over the rights of a purchaser of any
8property of the employer.
Analysis by the Legislative Reference Bureau
Under current law, the Department of Workforce Development (DWD) must
investigate and attempt to adjust any claim by an employee that his or her employer
has not paid the employee any wages that are owed to the employee (wage claim).
Currently, DWD or an employee who brings a wage claim action has a lien upon all
property of the employer, real and personal, located in this state for the full amount
of any wages owed to the employee (wage claim lien). Currently, a wage claim lien
takes precedence over all other debts, judgments, decrees, liens, or mortgages
against an employer, except for a lien of a commercial lending institution that
originates before the wage claim lien takes effect (prior lien), regardless of whether

those other debts, judgments, decrees, liens, or mortgages originated before or after
the wage claim lien takes effect. Current law provides, however, that a wage claim
lien takes precedence over a prior lien of a commercial lending institution as to the
first $3,000 of unpaid wages covered under the wage claim lien that are earned
within the six months preceding the filing of the wage claim with DWD or the
commencement of an action by the employee to recover the wages due.
This bill eliminates that $3,000 cap and six-month time limit so that under the
bill a wage claim lien covering any amount of wages earned at any time takes
precedence over a lien of a commercial lending institution, regardless of whether the
lien of the commercial lending institution originated before or after the wage claim
lien takes effect.
The bill also provides that a wage claim lien takes precedence over the rights
of any purchaser of any property of the employer, including any bona fide purchaser
that purchases the property of the employer at the time of commencement of a
bankruptcy proceeding, that is, the trustee in bankruptcy. 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.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB40, s. 1 1Section 1. 109.03 (5) of the statutes is amended to read:
AB40,3,72 109.03 (5) Enforcement. Except as provided in sub. (1), no employer may by
3special contract with employees or by any other means secure exemption from this
4section. Each employee shall have a right of action against any employer for the full
5amount of the employee's wages due on each regular pay day as provided in this
6section and for increased wages as provided in s. 109.11 (2), in any court of competent
7jurisdiction. An employee may bring a wage claim under this subsection on his or
8her own behalf or the recognized or certified collective bargaining representative of

1the employee may bring an action against an employer under this subsection on
2behalf of the employee.
An employee or collective bargaining representative may
3bring an action against an employer under this subsection without first filing a wage
4claim with the department under s. 109.09 (1). An employee who or collective
5bargaining representative that
brings an action against an employer under this
6subsection shall have a lien upon all property of the employer, real or personal,
7located in this state as described in s. 109.09 (2).
AB40, s. 2 8Section 2. 109.03 (6) of the statutes is amended to read:
AB40,3,149 109.03 (6) Wage claim. In an action by an employee, a collective bargaining
10representative,
or the department against the employer on a wage claim, no security
11for payment of costs is required. In any such proceeding the court may allow the
12prevailing party, in addition to all other costs, a reasonable sum for expenses. No
13person other than an employee, a collective bargaining representative, or the
14department shall be benefited or otherwise affected by this subsection.
AB40, s. 3 15Section 3. 109.09 (1) of the statutes is amended to read:
AB40,4,1416 109.09 (1) The department shall investigate and attempt equitably to adjust
17controversies between employers and employees as to alleged wage claims. An
18employee may file a wage claim under this subsection on his or her own behalf or the
19recognized or certified collective bargaining representative of the employee may file
20a wage claim under this subsection on behalf of the employee.
The department may
21receive and investigate any wage claim which is filed with the department, or
22received by the department under s. 109.10 (4), no later than 2 years after the date
23the wages are due. The department may, after receiving a wage claim, investigate
24any wages due from the employer against whom the claim is filed to any employee
25during the period commencing 2 years before the date the claim is filed. The

1department shall enforce this chapter and ss. 66.0903, 103.02, 103.49, 103.82, 104.12
2and 229.8275. In pursuance of this duty, the department may sue the employer on
3behalf of the employee to collect any wage claim or wage deficiency and ss. 109.03 (6)
4and 109.11 (2) and (3) shall apply to such actions. Except for actions under s. 109.10,
5the department may refer such an action to the district attorney of the county in
6which the violation occurs for prosecution and collection and the district attorney
7shall commence an action in the circuit court having appropriate jurisdiction. Any
8number of wage claims or wage deficiencies against the same employer may be joined
9in a single proceeding, but the court may order separate trials or hearings. In actions
10that are referred to a district attorney under this subsection, any taxable costs
11recovered by the district attorney shall be paid into the general fund of the county
12in which the violation occurs and used by that county to meet its financial
13responsibility under s. 978.13 (2) (b) for the operation of the office of the district
14attorney who prosecuted the action.
AB40, s. 4 15Section 4. 109.09 (2) (a) of the statutes is amended to read:
AB40,4,2216 109.09 (2) (a) The department of workforce development, under its authority
17under sub. (1) to maintain actions for the benefit of employees, or an employee who
18brings an action under s. 109.03 (5), or the recognized or certified collective
19bargaining representative of an employee, under its authority under s. 109.03 (5) to
20maintain actions for the benefit of employees,
shall have a lien upon all property of
21the employer, real or personal, located in this state for the full amount of any wage
22claim or wage deficiency.
AB40, s. 5 23Section 5. 109.09 (2) (b) 1. of the statutes is amended to read:
AB40,5,724 109.09 (2) (b) 1. A lien under par. (a) upon real property takes effect when the
25department of workforce development or, employee, or collective bargaining

1representative
files a notice of the lien with the clerk of the circuit court of the county
2in which the services or some part of the services were performed, pays the fee
3specified in s. 814.61 (5) to that clerk of circuit court, and serves a copy of that petition
4on the employer by personal service in the same manner as a summons is served
5under s. 801.11 or by certified mail with a return receipt requested. The clerk of
6circuit court shall enter the notice of the lien on the judgment and lien docket kept
7under s. 779.07.
AB40, s. 6 8Section 6. 109.09 (2) (b) 2. of the statutes is amended to read:
AB40,5,189 109.09 (2) (b) 2. A lien under par. (a) upon personal property takes effect when
10the department of workforce development or, employee, or collective bargaining
11representative
files notice of the lien in the same manner, form, and place as
12financing statements are filed under subch. V of ch. 409 regarding debtors who are
13located in this state, pays the same fee provided in s. 409.525 for filing financing
14statements, and serves a copy of the notice on the employer by personal service in the
15same manner as a summons is served under s. 801.11 or by certified mail with a
16return receipt requested. The department of financial institutions shall place the
17notice of the lien in the same file as financing statements are filed under subch. V
18of ch. 409.
AB40, s. 7 19Section 7. 109.09 (2) (b) 3. of the statutes is amended to read:
AB40,5,2520 109.09 (2) (b) 3. The department of workforce development or, employee, or
21collective bargaining representative
must file the notice under subd. 1. or 2. within
222 years after the date on which the wages were due. The notice shall specify the
23nature of the claim and the amount claimed, describe the property upon which the
24claim is made, and state that the person filing the notice claims a lien on that
25property.
AB40, s. 8
1Section 8. 109.09 (2) (c) 1. of the statutes is repealed.
AB40, s. 9 2Section 9. 109.09 (2) (c) 1m. of the statutes is renumbered 109.09 (2) (c) and
3amended to read:
AB40,6,154 109.09 (2) (c) A lien under par. (a) takes precedence over the rights of any
5purchaser of any property of the employer, including any bona fide purchaser under
611 USC 545 (2), and over
all other debts, judgments, decrees, liens, or mortgages
7against the employer, except a lien of a commercial lending institution as provided
8in subd. 2. and 3. or
a lien under s. 292.31 (8) (i) or 292.81, regardless of whether those
9other debts, judgments, decrees, liens, or mortgages originate before or after the lien
10under par. (a) takes effect. A lien under par. (a) may be enforced in the manner
11provided in ss. 779.09 to 779.12, 779.20, and 779.21, insofar as those provisions are
12applicable. The lien ceases to exist if the department of workforce development or
13the
, employee, or collective bargaining representative does not bring an action to
14enforce the lien within the period prescribed in s. 893.44 for the underlying wage
15claim.
AB40, s. 10 16Section 10. 109.09 (2) (c) 2. of the statutes is repealed.
AB40, s. 11 17Section 11. 109.09 (2) (c) 3. of the statutes is repealed.
AB40, s. 12 18Section 12. 109.11 (2) (a) of the statutes is amended to read:
AB40,6,2419 109.11 (2) (a) In a wage claim action that is commenced by an employee before
20the department has completed its investigation under s. 109.09 (1) and its attempts
21to compromise and settle the wage claim under sub. (1), a circuit court may order the
22employer to pay to the employee, in addition to the amount of wages due and unpaid
23and in addition to or in lieu of the criminal penalties specified in sub. (3), increased
24wages of not more than 50% of the amount of wages due and unpaid.
AB40, s. 13 25Section 13. Nonstatutory provisions.
AB40,7,5
1(1) Wage claim liens. Notwithstanding section 109.09 (2) (c), 2007 stats., a lien
2that exists under section 109.09 (2) (a) of the statutes on the day before the effective
3date of this subsection takes precedence over a lien of a commercial lending
4institution, as defined in section 109.09 (2) (c) 1., 2007 stats., that originated before
5the lien under section 109.09 (2) (a) of the statutes took effect.
AB40,7,66 (End)
Loading...
Loading...