Employee's Lien Law and Legal Definition

Employee’s lien is a lien available to the employee on the earnings of the employer and on all property of the employer used in the operation of the employer's business for the payments due to him/her. The employee’s lien arises when an employer agrees with an employee or group of employees to make payment to a medical, health, hospital, welfare, or pension fund or such other fund for the benefit of the employees and makes default in that payment to the fund. If the employer fails to make payment on the basis of a collective bargaining agreement providing for the payments then also employee’s lien arises on the employer’s property.

The lien will be to the extent of the money due in addition to the penalties due to be paid on the employee's behalf to qualify the employee for participation in the fund and for expenses incurred by the employee for which the employee would have been entitled to reimbursement under the fund if the required payments had been made. The claimant of the lien must file a notice of claim within stipulated time, if any, giving all relevant details regarding the lien. It should include names of the parties, terms and conditions of the payments, the amount due, a demand of the payment and other related details.

The notice of claim of employee’s lien is served on the employer similar to a summons and complaint in civil actions or mailed to the employer by registered mail. It is enforceable by the court.

The employee’s lien is preferred and superior to an encumbrance that attaches after the employer's payments became due.