Lien for Unpaid Wages Act Effective Soon in Maryland
Author: Rena Pirsos, XpertHR Legal Editor
September 25, 2013
Effective October 1, 2013, the Lien for Unpaid Wages Act (S.B. 758) permits employees to file a lien against a Maryland employer's real or personal property to recover unpaid wages before filing a lawsuit in court. Because the new law gives employers only 30 days in which to respond in their defense, employers that are served with notice of this type of lien should immediately seek the guidance of their employment counsel.
Under an expedited process, an employer served with a notice of lien will be required to file a complaint within 30 days in the circuit court for the county where the employer's property is located to dispute the employee's wage claim. The employer's complaint must include an affidavit stating facts in the employer's defense and requesting a hearing for the court to review all the evidence. If the employer fails to file the complaint within 30 days after being served with the notice of lien, the lien becomes formally established against the employer.
The circuit court is required to set a hearing to review evidence within 45 days after the employer files the complaint. An employee who proves his or her case is entitled to court costs and reasonable attorney fees in addition to the unpaid wages.
While the new law does not define the term "wages," it excludes "commissions" from the employee's potential recovery of unpaid amounts. This is probably because whether commissions have actually been "earned" by an employee depends on the particular facts involved. However, a prevailing employee will likely be able to recover from the employer bonuses, fringe benefits, overtime pay or any other compensation promised for services performed since these payments are all included in the definition of "wages" under the Maryland Wage Payment and Collection Law.
The state Department of Labor, Licensing and Regulation is authorized to issue regulations establishing additional details under the new law.