AB721,1,7 1An Act to amend 109.03 (5), 109.03 (6), 109.09 (1), 109.09 (2) (a), 109.09 (2) (b)
21., 109.09 (2) (b) 2., 109.09 (2) (b) 3., 109.09 (2) (c) 1m., 109.09 (2) (c) 2., 109.09
3(2) (c) 3. and 109.11 (2) (a); and to create 109.09 (2) (c) 1r. and 109.09 (2) (d) of
4the statutes; relating to: the filing of a wage claim or the bringing of a wage
5claim action by a collective bargaining representative on behalf of an employee
6and the priority of a wage claim lien over a prior lien of a commercial lending
7institution and over the rights of a purchaser of any property 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 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.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB721,1 1Section 1. 109.03 (5) of the statutes is amended to read:
AB721,3,122 109.03 (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

1section. Each employee shall have a right of action against any employer for the full
2amount of the employee's wages due on each regular pay day as provided in this
3section and for increased wages as provided in s. 109.11 (2), in any court of competent
4jurisdiction. An employee may bring an action under this subsection on his or her
5own behalf or the recognized or certified collective bargaining representative of the
6employee may bring an action against an employer under this subsection on behalf
7of the employee.
An employee or collective bargaining representative may bring an
8action against an employer under this subsection without first filing a wage claim
9with the department under s. 109.09 (1). An employee who or collective bargaining
10representative that
brings an action against an employer under this subsection shall
11have a lien upon all property of the employer, real or personal, located in this state
12as described in s. 109.09 (2).
AB721,2 13Section 2. 109.03 (6) of the statutes is amended to read:
AB721,3,1914 109.03 (6) Wage claim. In an action by an employee, a collective bargaining
15representative,
or the department against the employer on a wage claim, no security
16for payment of costs is required. In any such proceeding the court may allow the
17prevailing party, in addition to all other costs, a reasonable sum for expenses. No
18person other than an employee, a collective bargaining representative, or the
19department shall be benefited or otherwise affected by this subsection.
AB721,3 20Section 3. 109.09 (1) of the statutes is amended to read:
AB721,4,1921 109.09 (1) The department shall investigate and attempt equitably to adjust
22controversies between employers and employees as to alleged wage claims. An
23employee may file a wage claim under this subsection on his or her own behalf or the
24recognized or certified collective bargaining representative of the employee may file
25a wage claim under this subsection on behalf of the employee.
The department may

1receive and investigate any wage claim which is filed with the department, or
2received by the department under s. 109.10 (4), no later than 2 years after the date
3the wages are due. The department may, after receiving a wage claim, investigate
4any wages due from the employer against whom the claim is filed to any employee
5during the period commencing 2 years before the date the claim is filed. The
6department shall enforce this chapter and ss. 66.0903, 103.02, 103.49, 103.82,
7104.12, and 229.8275. In pursuance of this duty, the department may sue the
8employer on behalf of the employee to collect any wage claim or wage deficiency and
9ss. 109.03 (6) and 109.11 (2) and (3) shall apply to such actions. Except for actions
10under s. 109.10, the department may refer such an action to the district attorney of
11the county in which the violation occurs for prosecution and collection and the
12district attorney shall commence an action in the circuit court having appropriate
13jurisdiction. Any number of wage claims or wage deficiencies against the same
14employer may be joined in a single proceeding, but the court may order separate
15trials or hearings. In actions that are referred to a district attorney under this
16subsection, any taxable costs recovered by the district attorney shall be paid into the
17general fund of the county in which the violation occurs and used by that county to
18meet its financial responsibility under s. 978.13 (2) (b) for the operation of the office
19of the district attorney who prosecuted the action.
AB721,4 20Section 4. 109.09 (2) (a) of the statutes is amended to read:
AB721,5,221 109.09 (2) (a) The department of workforce development, under its authority
22under sub. (1) to maintain actions for the benefit of employees, or an employee who
23brings an action under s. 109.03 (5), or the recognized or certified collective
24bargaining representative of an employee that brings an action under s. 109.03 (5),

25shall have a lien upon all property of the employer, real or personal, located in this

1state for the full amount of any wage claim or wage deficiency. A lien under this
2paragraph is created when the services for which the wages are due are performed.
AB721,5 3Section 5. 109.09 (2) (b) 1. of the statutes is amended to read:
AB721,5,124 109.09 (2) (b) 1. A lien under par. (a) upon real property takes effect is perfected
5when the department of workforce development or, employee, or collective
6bargaining representative
files a notice of the lien with the clerk of the circuit court
7of the county in which the services or some part of the services were performed, pays
8the fee specified in s. 814.61 (5) to that clerk of circuit court, and serves a copy of that
9petition
the notice on the employer by personal service in the same manner as a
10summons is served under s. 801.11 or by certified mail with a return receipt
11requested. The clerk of circuit court shall enter the notice of the lien on the judgment
12and lien docket kept under s. 779.07.
AB721,6 13Section 6. 109.09 (2) (b) 2. of the statutes is amended to read:
AB721,5,2314 109.09 (2) (b) 2. A lien under par. (a) upon personal property takes effect is
15perfected
when the department of workforce development or, employee, or collective
16bargaining representative
files a notice of the lien with the department of financial
17institutions
in the same manner, and form, and place as financing statements are
18filed under subch. V of ch. 409 regarding debtors who are located in this state, pays
19the same fee provided in s. 409.525 for filing financing statements, and serves a copy
20of the notice on the employer by personal service in the same manner as a summons
21is served under s. 801.11 or by certified mail with a return receipt requested. The
22department of financial institutions shall place the notice of the lien in the same file
23as financing statements are filed under subch. V of ch. 409.
AB721,7 24Section 7. 109.09 (2) (b) 3. of the statutes is amended to read:
AB721,6,6
1109.09 (2) (b) 3. The department of workforce development or, employee, or
2collective bargaining representative
must file the notice under subd. 1. or 2. within
32 years after the date on which the wages were due. The notice shall specify the
4nature of the claim and the amount claimed, describe the property upon which the
5claim is made, and state that the person filing the notice claims a lien on that
6property.
AB721,8 7Section 8. 109.09 (2) (c) 1m. of the statutes is amended to read:
AB721,6,218 109.09 (2) (c) 1m. A lien under par. (a) takes precedence over all other debts,
9judgments, decrees, liens, interests, or mortgages against the employer, except a lien
10of a commercial lending institution as provided in subd. subds. 1r. and 2. and 3., a
11lien of a financial institution as provided in subd. 3.,
or a lien under s. 292.31 (8) (i)
12or 292.81, regardless of whether those other debts, judgments, decrees, liens,
13interests, or mortgages originate are created before or after the lien under par. (a)
14takes effect is perfected. A lien under par. (a) also takes precedence over the rights
15of any person that purchases any property of the employer after the lien is created,
16including any bona fide purchaser
. A lien under par. (a) may be enforced in the
17manner provided in ss. 779.09 to 779.12, 779.20, and 779.21, insofar as those
18provisions are applicable. The lien ceases to exist if the department of workforce
19development or the, employee, or collective bargaining representative does not bring
20an action to enforce the lien within the period prescribed in s. 893.44 for the
21underlying wage claim.
AB721,9 22Section 9. 109.09 (2) (c) 1r. of the statutes is created to read:
AB721,7,423 109.09 (2) (c) 1r. Except as provided in this subdivision, a lien under par. (a)
24does not take precedence over a lien of a commercial lending institution against the
25employer that is perfected before the lien under par. (a) is perfected. Subject to subds.

12. and 3., a lien under par. (a) takes precedence over the aggregate of all liens of
2commercial lending institutions against the employer that are perfected before the
3lien under par. (a) is perfected only as to the first $4,500 of unpaid wages covered
4under the lien.
AB721,10 5Section 10. 109.09 (2) (c) 2. of the statutes is amended to read:
AB721,8,26 109.09 (2) (c) 2. Except as provided in this subdivision, a lien under par. (a) does
7not take precedence over a lien of a commercial lending institution against the
8employer that is perfected as of the day before the effective date of this subdivision
9.... [LRB inserts date], and
that originates is perfected before the lien under par. (a)
10takes effect is perfected or over a lien of a commercial lending institution against the
11employer for any amount advanced by the commercial lending institution after a lien
12under par. (a) is perfected under a contract entered into before the effective date of
13this subdivision .... [LRB inserts date], including any renewal or time extension of
14such a contract
. Subject to subd. 3., a lien under par. (a) takes precedence over a lien
15of a
the aggregate of all liens of commercial lending institution institutions against
16the employer that are perfected as of the day before the effective date of this
17subdivision .... [LRB inserts date], and
that originates are perfected before the lien
18under par. (a) takes effect is perfected, or over the aggregate of all liens of commercial
19lending institutions against the employer for any amount advanced by the
20commercial lending institutions after a lien under par. (a) is perfected under
21contracts entered into before the effective date of this subdivision .... [LRB inserts
22date], including any renewal or time extension of such contracts,
only as to the first
23$3,000 of unpaid wages covered under the lien that are earned by an employee within
24the 6 months preceding the date on which the employee or collective bargaining
25representative
files the wage claim under sub. (1) or brings the action under s. 109.03

1(5) or the date on which the department receives the wage claim under s. 109.10 (4)
2(a), whichever is applicable.
AB721,11 3Section 11. 109.09 (2) (c) 3. of the statutes is amended to read:
AB721,8,154 109.09 (2) (c) 3. Notwithstanding subd. subds. 1r. and 2., a lien of a financial
5institution that exists on is perfected as of November 30, 2003, and that originates
6is perfected before a lien under par. (a) takes effect is perfected takes precedence over
7the lien under par. (a), and a lien of a financial institution for any amount advanced
8by the financial institution after a lien under par. (a) takes effect is perfected under
9a contract entered into before December 1, 2003, including any extension or renewal
10or time extension of such a contract, takes precedence over the lien under par. (a).
11Notwithstanding subd. subds. 1r. and 2., a lien under par. (a) that exists on is
12perfected as of
November 30, 2003, takes precedence over a lien of a commercial
13lending institution that is not a financial institution, regardless of whether the lien
14of the commercial lending institution originates is perfected before or after the lien
15under par. (a) takes effect is perfected.
AB721,12 16Section 12. 109.09 (2) (d) of the statutes is created to read:
AB721,8,2017 109.09 (2) (d) 1. In this paragraph, "consumer price index" means the average
18of the consumer price index over each 12-month period for all urban consumers, U.S.
19city average, as determined by the bureau of labor statistics of the U.S. department
20of labor.
AB721,9,221 2. At least once every 5 years, or more frequently if upon investigation the
22department finds that there is reasonable cause to believe that the amount specified
23in par. (c) 1r. should be adjusted, the secretary of workforce development shall
24appoint a wage claim lien review committee under s. 15.04 (1) (c), selected so as fairly
25to represent employers, employees, commercial lending institutions, and the public,

1for the purpose of studying the need for an adjustment to that amount and making
2recommendations to the legislature for any adjustments to that amount.
AB721,9,43 3. In conducting the study and making the recommendations under subd. 2.,
4the wage claim lien review committee may consider any of the following:
AB721,9,85 a. The percentage difference between the consumer price index for the
612-month period ending on the last day of the month in which the amount specified
7in par. (c) 1r. was last adjusted and the consumer price index for the 12-month period
8ending on the last day of the month in which the committee is appointed.
AB721,9,129 b. The effect that an adjustment to the amount specified in par. (c) 1r. might
10have on the economy of the state, including the effect of such an adjustment on job
11creation, retention, and expansion; on the availability of entry-level jobs; and on
12regional economic conditions within the state.
AB721,9,2113 4. The wage claim lien review committee shall submit a report of its
14recommendations, together with an explanation for those recommendations and any
15proposed legislation that may be necessary to implement those recommendations, to
16the secretary of workforce development, the governor, the speaker of the assembly,
17the senate majority leader, and the minority leaders of each house of the legislature
18and to the standing committees of each house of the the legislature that are
19concerned with labor issues and issues affecting financial institutions under s.
2013.172 (3). Those standing committees shall review and conduct public hearings on
21those recommendations.
AB721,13 22Section 13. 109.11 (2) (a) of the statutes is amended to read:
AB721,9,2523 109.11 (2) (a) In a wage claim action that is commenced by an employee before
24the department has completed its investigation under s. 109.09 (1) and its attempts
25to compromise and settle the wage claim under sub. (1), a circuit court may order the

1employer to pay to the employee, in addition to the amount of wages due and unpaid
2and in addition to or in lieu of the criminal penalties specified in sub. (3), increased
3wages of not more than 50% of the amount of wages due and unpaid.
AB721,14 4Section 14. Initial applicability.
AB721,10,7 5(1) Wage claim lien priority. The treatment of section 109.09 (2) (c) 1m. of the
6statutes first applies to a lien under section 109.09 (2) (a) of the statutes that is
7created on the effective date of this subsection.
AB721,15 8Section 15. Effective dates. This act takes effect on the first day of the 4th
9month beginning after publication, except as follows:
AB721,10,1210 (1) Wage claim lien review committee. The treatment of section 109.09 (2) (d)
11of the statutes takes effect on the first day of the 24th month beginning after
12publication.
AB721,10,1313 (End)
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