Legal Tools You Can Use to Make Sure You Collect Owed Wages
Once you've filed your wage claim:
Once you have a judgment:
MECHANIC'S LIEN Back to top
A mechanic's lien is a legal tool that protects a person's right to be paid for work performed on real property by claiming part of the value of that property. In essence, the worker "grabs on to" the property through a special legal process to make sure he or she is paid. It is available for laborers, but only if they do construction, demolition, alteration, painting, or landscaping work and other works of improvement.
The lien is created by a legal document that is recorded with the County Recorder's office in the county where the work was performed. The lien states the identity of the worker and the contractor, the dates the work was performed, the type of work performed, the location and description of the property where the work was performed, the name of the property owner, and the amount claimed to be owed to the worker. When the County Recorder's office records the lien, it legally puts the world on notice that the worker is claiming a part of the value of the property on which he or she performed the work.
A lien is an incredibly valuable tool because it affects the property owner's ability to resell or refinance the property, or even purchase or finance other properties. A valid lien also gives the claimant the right to sell the property and collect the amount claimed on the lien from the proceeds of the sale.
When can a mechanic's lien be filed?
Mechanic's lien must be filed at the very beginning of a case. The law requires workers to file 90 days from either, the last day the laborer performed work on the property or the day work on the property stopped altogether.
Workers do not need to win (or even file) a labor commissioner case or a court case before filing a mechanic's lien. A worker does not need an ODA, citation, or judgment to file a mechanics' lien.
Instead, they sign document (the mechanic's lien) swearing that they are owed wages, file that with the County Recorder and then serve it on the employer and the property owner. Eventually, the claim would need to be proven up (in court) if the parties disagree about the facts or amount owed.
Who can file a mechanic's lien?
- You can file a mechanic's lien if you performed a permanent work of improvement on real property
- A "work of permanent improvement" means anything that changes the look, structure or value of a piece of property for a long time. This includes construction, demolition, framing, electrical, plumbing, masonry, tiling, planting, remodeling, installing fixtures, painting, grading land and other site improvements, and more.
- AND you are owed wages
- This can include: minimum wages, overtime, contract wages, rest and meal break premiums, and vacation wages.
Mechanics's Liens can be complicated and you may want to consider consulting and/or hiring an attorney to work on this for you.
PRE-JUDGMENT LIEN Back to top
- Liens allow us to place a hold on the defendant's property currently owned, or later acquired, in the amount of any wages owed to any employee.
- They provide help for new victims by allowing the Labor Commissioner to lock down the defendants' property while the case is pending.
- They do not necessarily provide help for past victims of wage theft with unpaid judgments.
- Labor Code 238.2 and 238.3 liens. Pre-judgment (even possibly pre-citation) liens against employers that have previous unpaid judgment for wages. In order to apply these liens the employer must have an outstanding judgment for wages.
- Lien on Real Property – Labor Code 238.2
- Real Estate
- Lien on Personal Property – Labor Code 238.3
- Equipment and inventory
- Because the Labor Commissioner has the authority to create these liens, it is important that you share as much information about your employer's assets and property as possible with our Office.
WRIT OF ATTACHMENT Back to top
- A writ of attachment is a prejudgment remedy that allows a creditor to have a lien recorded against the defendant's property and/or have assets seized and held pending adjudication of the claim. Assistance from an attorney is needed for a Writ of Attachment.
- Property Subject to Attachment. Varies somewhat for business entity defendants and natural person defendants. Generally includes: real property, accounts receivable, general intangibles arising out of the conduct by the defendant of a trade/business/profession, inventory, equipment, farm products, securities, and money judgments.
ASK YOUR EMPLOYER TO PAY Back to top
You can write a "demand letter" to your employer to request payment of the amount owed and to notify them of your intent to use legal collection tools. You may consider sending your demand letter after you file a lien on your employer's property to prevent your employer from selling property that could be used to collect your judgment. In your letter, you may want to demand the amount your employer owes you and also state:
- Whether you are willing to accept payment in installments.
- The amount owed will increase daily, since the judgment accumulates interest at the rate of 10% per year.
- You will seek reimbursement from your employer of any reasonable and necessary costs of collection.
- The debt may appear on your employer's credit report and lower its credit score.
- You will collect the judgment through legal processes, such as the seizure of any assets by the Sheriff, without further notice to your employer.
BONDS Back to top
- Employers may be required by law to obtain a bond in order to conduct business.
- You can file a claim on your employer's bond for wages owed, in the following industries:
- You have (3) years from the date you earned the wages to make a claim, (6) months for construction bond claims.
- Definition of a Surety Bond:
- A surety bond is an agreement between an employer, who is required by the Labor Commissioner to obtain a bond, and a surety company that sells the bond. The bond guarantees the employer will act in accordance with labor laws. If the employer has an unsatisfied wage judgment, the bond may cover the wages owed.
- Bond Amounts:
- Bonds have a monetary limit. You can only claim on the maximum amount of the bond.
- Statute of Limitations:
- Bond claims are subject to a statute of limitations. You have three (3) years from the date the wage debt was incurred to make a claim.
- For construction contractors bonds, you only have six months to make the claim on the bond. However, once the claim is filed, you have two (2) years to bring a legal action to enforce the claim, if that becomes necessary.
TOOLS FOR ONCE YOU HAVE A JUDGMENT:
FILE A LIEN ON YOUR EMPLOYER'S PROPERTY Back to top
What is a lien?
A lien places a hold on your employer's property so that your employer and potential buyers are notified that you have a right to collect payment of your judgment from the debtor. A judgment lien may become an issue when a debtor sells property because many buyers will not buy property with lien(s).
- Recording a real property lien.If you received your decision after January 1, 2014 and your employer owns real property (buildings and land), the Labor Commissioner mays have filed a lien on your employer's real property on your behalf in the same county where the judgment was entered. A notice stating that a lien has been filed should have been included with the ODA.
- If you received your judgment before January 1, 2014, you will may want to file a lien yourself. Many creditors record liens in the county where the employer is located.
- If you think your employer owns buildings and land in another county, you may want to file a lien in that county as well. If your employer does not own buildings or land, you can file a lien on other types of property belonging to your employer, such as inventory, equipment, and valuables.
- You may want to file a lien on your employer's real and personal property, particularly if you worry that your employer will file for bankruptcy, sell, or transfer their property before you collect.
How do I file a lien?
Filing a lien involves two legal forms that you may complete on your own.
- Complete and file at the court that mailed you the judgment a form called Abstract of Judgment (Form EJ-001), available on the internet at http://www.courts.ca.gov/documents/ej001.pdf. The Abstract of Judgment is an official court summary of the judgment that was originally entered by the court.
- Record (file) the Abstract of Judgment with all the County Recorder's Offices in counties where you know the employer has real property. The County Recorder's Office can give you instructions on how to have this document recorded. Liens on all other property, such as inventory, equipment, and valuables, last for 5 years and attach to all such property in the state. In order to file a lien on property that is not real property, you will need to:
- Complete and file with the Secretary of State a form called Notice of Judgment Lien (Form JL1), available on the internet at http://www.sos.ca.gov/business-programs/ucc/judgment-lien/.
- Provide a copy of this Notice of Judgment Lien to your employer following the special legal procedures called service of process, using instructions available at your local court, or from the internet at http://www.courts.ca.gov/selfhelp-serving.htm.
What happens after I file a lien?
- Your employer may contact you after receiving notice of the lien or when attempting to sell the property. Your employer or the new buyer of the property may pay you first before the sale is completed.
- If your employer ignores the lien, you can have the Sheriff levy the property or hire a lawyer to help you force a sale of the property at a public auction to collect your unpaid wages.
- Liens on real property last for 10 years and attach to all your employer's buildings and land located in the county where you file the lien.
USING A LEVY, HAVE THE SHERIFF SEIZE YOUR EMPLOYER'S PROPERTY Back to top
Using a levy, you can take possession of your employer's property with the assistance of the County Sheriff. First, you must obtain a Writ of Execution, which is a court document that instructs the County Sheriff to take action to collect the judgment. The Writ of Execution gives you 180 days to request that the Sheriff seize property and collect your judgment amount. If you fail to recover your full judgment on the first try, you can obtain a writ of execution multiple times.
- Complete the Writ of Execution (Form EJ-130), available at your local courthouse and on the internet at http://www.courts.ca.gov/documents/ej130.pdf.
- Along with your Writ of Execution, complete and file a form called Memorandum of Costs after Judgment (Form MC-012), available at your local courthouse and on the internet at http://www.courts.ca.gov/documents/mc012.pdf. The Memorandum of Costs is a summary of interest that has accrued on the judgment amount and the various fees that you have paid to collect the judgment. You are not required to submit this form to collect your judgment, only to collect the interest, fees and costs.
- Get Writs of Execution in all the counties where your employer has assets.
- Provide the Sheriff their fees, an original Writ of Execution, and instructions. Since each Sheriff operates differently, contact them for detailed instructions.
- If you wait longer than 180 days after you obtain the Writ of Execution before you request that the Sheriff perform the levy, you will need to file and get a new Writ of Execution following the same procedure outlined above.
TOOLS FOR GARMENT, CAR WASH, AND FARM WORKERS Back to top
Special restitution funds compensate workers in the garment, car wash, and agricultural industries when their employers do not pay wages they owe. Ask the Deputy Labor Commissioner assigned to your claim whether you may be compensated through these special funds.