SENATE AMENDED
PRIOR PRINTER'S NO. 309 PRINTER'S NO. 2713
No. 302 Session of 1999
INTRODUCED BY BELFANTI, LEH, EACHUS, DRUCE, TIGUE, BUXTON,
DeWEESE, DEMPSEY, M. COHEN, YOUNGBLOOD, ROONEY, SAINATO,
YEWCIC, CORRIGAN, CURRY, ROSS, BELARDI, GRUITZA, MELIO,
WOJNAROSKI, WALKO, CALTAGIRONE, TRICH, SHANER, HALUSKA,
PLATTS, SURRA, STERN, KELLER, JOSEPHS, WILLIAMS, PETRARCA,
HORSEY, PISTELLA, MANDERINO, DeLUCA, RAMOS, BEBKO-JONES,
PESCI, STURLA, ROHRER, MARSICO, BROWNE, GEORGE, GORDNER,
HERSHEY, SANTONI, MUNDY, THOMAS, SAYLOR, READSHAW, TRELLO,
STABACK, PRESTON, DALEY, GIGLIOTTI, COLAFELLA, YUDICHAK,
WASHINGTON, STEELMAN, SERAFINI, MANN, SOLOBAY AND SCHULER,
FEBRUARY 3, 1999
SENATOR ARMSTRONG, LABOR AND INDUSTRY, IN SENATE, AS AMENDED,
NOVEMBER 30, 1999
AN ACT
1 Amending the act of July 14, 1961 (P.L.637, No.329), entitled
2 "An act relating to the payment of wages or compensation for
3 labor or services; providing for regular pay days; conferring
4 powers and duties upon the Department of Labor and Industry,
5 including powers and duties with respect to the civil
6 collection of wages; providing civil and criminal penalties
7 for violations of the act; providing for their collection and
8 disposition and providing for additional civil damages,"
9 providing for duty of successor employer to pay back wages.
10 and further providing for enforcement. <--
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. The act of July 14, 1961 (P.L.637, No.329), known
14 as the Wage Payment and Collection Law, is amended by adding a
15 section to read:
16 Section 6.1. Duty to Pay Back Wages at the Sale of a
1 Business.--(a) Any employer who transfers the title of his
2 business or sells, in bulk, fifty-one percent (51%) or more A <--
3 MAJORITY of the assets of his business is obligated to pay in
4 full all wages due and owing to any employes affected by the
5 transfer of the title or the sale of said assets as of the date
6 of transfer of the title or the sale of said assets of the
7 business on or before the date of the transfer or sale. This
8 obligation shall be discharged by one or all of the following as
9 may be required:
10 (1) full payment by certified check to an employe to whom
11 back pay is owed; OR <--
12 (2) the placement of the amount of required moneys in an <--
13 escrow account held by an attorney or certified public
14 accountant approved by the department; or
15 (3) a legally binding agreement for the assumption of the
16 liability by the purchaser or transferee. The discharge of this
17 obligation shall be evidenced by a certificate issued by the
18 department or a certified agent thereof. The certificate shall
19 be recorded with the sales or transfer transaction, as well as
20 any set-offs or counter-claims against wages covered by this
21 section claimed by the employer. The employer shall give the
22 department ten days' written notice of the transfer or sale
23 prior to the completion of the transfer or sale of the property.
24 (2) A LEGALLY BINDING AGREEMENT, AS PART OF THE AGREEMENT OF <--
25 SALE OR OTHER TRANSFER DOCUMENT, FOR THE ASSUMPTION BY THE
26 PURCHASER OR TRANSFEREE OF FULL LIABILITY FOR ALL WAGES DUE AND
27 OWING. A COPY OF THE AGREEMENT OF SALE OR OTHER TRANSFER
28 DOCUMENT SHALL BE SUBMITTED TO THE DEPARTMENT AS A MATTER OF
29 RECORD. ALL PARTIES TO THE SALE OR OTHER TRANSFER SHALL MAINTAIN
30 A RECORD OF ANY WAGES DUE AND OWING AT THE TIME OF THE SALE OR
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1 TRANSFER AND RELATED SUPPORTING DOCUMENTATION.
2 (b) Any wages not paid as required by subsection (a) shall
3 be a statutory lien upon the title and assets of the business
4 transferred or sold, and an enforceable claim under this act.
5 The lien in the amount of any wages not paid as required by
6 subsection (a) shall attach to the title and assets of the
7 business prior to its transfer or sale and shall transfer with
8 the title and assets of the business and become the liability of
9 a successor purchaser or transferee, unless discharged as
10 required in subsection (a).
11 (c) As used in this section, the term "certified agent" <--
12 means an attorney, a certified public accountant or other
13 individual approved by the department in accordance with
14 regulation.
15 (C) A STATUTORY LIEN DESCRIBED IN SUBSECTION (B) SHALL <--
16 ATTACH AS OF THE DATE THE WAGES BECOME DUE AND PAYABLE. A
17 STATUTORY LIEN THAT IS RECORDED WITHIN TEN DAYS AFTER THE
18 TRANSFER OF TITLE AND ASSETS SHALL TAKE PRIORITY OVER ALL LIENS
19 OTHER THAN PURCHASE MONEY MORTGAGES, AS SET FORTH IN 42 PA.C.S.
20 § 8141 (RELATING TO TIME FROM WHICH LIENS HAVE PRIORITY). A
21 STATUTORY LIEN SHALL BE RECORDED AND ENFORCED IN ACCORDANCE WITH
22 AND BE SUBJECT TO PROVISIONS OF 42 PA.C.S. CH. 81 SUBCH. C
23 (RELATING TO PRIORITY OF LIENS) AND TO ANY OTHER APPLICABLE
24 PROVISIONS OF 42 PA.C.S. (RELATING TO JUDICIARY AND JUDICIAL
25 PROCEDURE).
26 Section 2. Section 8 of the act, amended July 14, 1977 <--
27 (P.L.82, No.30), is amended to read:
28 SECTION 2. SECTIONS 8 AND 9.1 OF THE ACT, AMENDED OR ADDED <--
29 JULY 14, 1977 (P.L.82, NO.30), ARE AMENDED TO READ:
30 Section 8. Enforcement.--(a) The Secretary of Labor and
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1 Industry shall have the duty, but not the exclusive right, to
2 enforce and administer the provisions of this act, to
3 investigate any alleged violations of this act and to institute
4 prosecutions and actions as provided hereunder. Nothing in this
5 act shall authorize the secretary to initiate a civil action for
6 unpaid wages which are subject to disposition under grievance
7 and arbitration procedures of a collective bargaining agreement.
8 (b) The Department of Labor and Industry shall have the
9 power to make rules and regulations for the administration of
10 this act.
11 (c) Every employer shall keep open to inspection by the
12 secretary or his authorized representative, all payroll records
13 or other records or documents relative to the enforcement of
14 this act. Such inspection may be made by the secretary or his
15 authorized representative at any reasonable time. Every employer
16 shall permit the secretary or any authorized representative to
17 interrogate any employe in the place of employment and during
18 work hours with respect to such records or documents. Where such
19 records are maintained at a central record keeping office
20 outside of the Commonwealth, such records shall be made
21 available for inspection at the place of employment within seven
22 calendar days following verbal or written notice from the
23 secretary or his authorized representative. Where a microfilm or
24 any other method is authorized for record keeping purposes, the
25 employer shall make available to the secretary or his authorized
26 representative, the equipment which is necessary to facilitate
27 review of the records.
28 (d) If a company files a bankruptcy petition under 11 U.S.C.
29 Ch. 11 (relating to reorganization), the company shall file with
30 the court a bond or other assurance prescribed under 11 U.S.C.
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1 (relating to bankruptcy) relating to the payment of wages of
2 salaried and nonsalaried employes of the company. The department
3 shall monitor payments or wages by a company which has filed a
4 petition under 11 U.S.C. Ch. 11.
5 SECTION 9.1. CIVIL REMEDIES AND PENALTIES.--(A) ANY EMPLOYE <--
6 OR GROUP OF EMPLOYES, LABOR ORGANIZATION OR PARTY TO WHOM ANY
7 TYPE OF WAGES IS PAYABLE MAY INSTITUTE ACTIONS PROVIDED UNDER
8 THIS ACT.
9 (B) ACTIONS BY AN EMPLOYE, LABOR ORGANIZATION, OR PARTY TO
10 WHOM ANY TYPE OF WAGES IS PAYABLE TO RECOVER UNPAID WAGES AND
11 LIQUIDATED DAMAGES MAY BE MAINTAINED IN ANY COURT OF COMPETENT
12 JURISDICTION, BY SUCH LABOR ORGANIZATION, PARTY TO WHOM ANY TYPE
13 OF WAGES IS PAYABLE OR ANY ONE OR MORE EMPLOYES FOR AND IN
14 BEHALF OF HIMSELF OR THEMSELVES AND OTHER EMPLOYES SIMILARLY
15 SITUATED, OR SUCH EMPLOYE OR EMPLOYES MAY DESIGNATE AN AGENT OR
16 REPRESENTATIVE TO MAINTAIN SUCH ACTION OR ON BEHALF OF ALL
17 EMPLOYES SIMILARLY SITUATED. ANY SUCH EMPLOYE, LABOR
18 ORGANIZATION, PARTY, OR HIS REPRESENTATIVE SHALL HAVE THE POWER
19 TO SETTLE OR ADJUST HIS CLAIM FOR UNPAID WAGES.
20 (C) THE EMPLOYE OR GROUP OF EMPLOYES, LABOR ORGANIZATION OR
21 PARTY TO WHOM ANY TYPE OF WAGES IS PAYABLE MAY, IN THE
22 ALTERNATIVE, INFORM THE SECRETARY OF THE WAGE CLAIM AGAINST AN
23 EMPLOYER OR FORMER EMPLOYER, AND THE SECRETARY SHALL, UNLESS THE
24 CLAIM APPEARS TO BE FRIVOLOUS, IMMEDIATELY NOTIFY THE EMPLOYER
25 OR FORMER EMPLOYER OF SUCH CLAIM BY CERTIFIED MAIL. IF THE
26 EMPLOYER OR FORMER EMPLOYER FAILS TO PAY THE CLAIM OR MAKE
27 SATISFACTORY EXPLANATION TO THE SECRETARY OF HIS FAILURE TO DO
28 SO WITHIN TEN DAYS AFTER RECEIPT OF SUCH CERTIFIED NOTIFICATION,
29 THEREAFTER, THE EMPLOYER OR FORMER EMPLOYER SHALL BE LIABLE FOR
30 A PENALTY OF TEN PERCENT (10%) OF THAT PORTION OF THE CLAIM
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1 FOUND TO BE JUSTLY DUE. A GOOD FAITH DISPUTE OR CONTEST AS TO
2 THE AMOUNT OF WAGES DUE OR THE GOOD FAITH ASSERTION OF A RIGHT
3 OF SET-OFF OR COUNTER-CLAIM SHALL BE DEEMED A SATISFACTORY
4 EXPLANATION FOR NONPAYMENT OF SUCH AMOUNT IN DISPUTE OR CLAIMED
5 AS A SET-OFF OR COUNTER-CLAIM. THE SECRETARY SHALL HAVE A CAUSE
6 OF ACTION AGAINST THE EMPLOYER OR FORMER EMPLOYER FOR RECOVERY
7 OF SUCH PENALTY AND THE SAME MAY BE INCLUDED IN ANY SUBSEQUENT
8 ACTION BY THE SECRETARY ON SAID WAGE CLAIM OR MAY BE EXERCISED
9 SEPARATELY AFTER ADJUSTMENT OF SUCH WAGE CLAIM WITHOUT COURT
10 ACTION.
11 (D) IN ANY CIVIL ACTION BROUGHT UNDER THE PROVISIONS OF THIS
12 ACT, THE [SECRETARY OF LABOR AND INDUSTRY] COURT MAY REQUIRE THE
13 EMPLOYER TO POST BOND OR SECURITY TO SECURE PAYMENT OF THE
14 ENTIRE CLAIM OF THE EMPLOYE WITH CREDIT IN THE AMOUNT OF ANY
15 GOOD FAITH ASSERTION OF A RIGHT OF SET-OFF OR COUNTER-CLAIM.
16 SUCH BOND OR SECURITY SHALL BE POSTED IN THE COURT WHERE THE
17 CIVIL ACTION IS BROUGHT. THE [REQUEST] REQUIREMENT FOR BOND OR
18 SECURITY SHALL BE SIGNED BY THE [SECRETARY] COURT AND SHALL
19 PROVIDE THAT SUCH BOND OR SECURITY IN THE AMOUNT STATED SHALL BE
20 POSTED WITHIN 30 DAYS OF SERVICE THEREOF ON THE EMPLOYER. IF
21 SUCH BOND OR SECURITY IS NOT POSTED WITHIN THE 30-DAY PERIOD,
22 THE EMPLOYER WILL BE DEEMED TO HAVE ADMITTED HIS LIABILITY,
23 JUDGMENT MAY BE ENTERED BASED ON THIS DEEMED ADMISSION AND
24 EXECUTION MAY IMMEDIATELY ENSUE. BEFORE ORDERING BOND OR
25 SECURITY UNDER THIS SUBSECTION, THE COURT SHALL AFFORD ALL
26 PARTIES THE OPPORTUNITY TO BE HEARD, AND SHALL CONSIDER THE
27 EXIGENCY OF THE NEED FOR BOND OR SECURITY, THE LIKELIHOOD OF
28 SUCCESS ON THE MERITS AND THE EMPLOYER'S ABILITY TO SATISFY THE
29 JUDGMENT REQUESTED BY THE EMPLOYE.
30 (E) IF THE SECRETARY DETERMINES THAT WAGES DUE HAVE NOT BEEN
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1 PAID AND THAT SUCH UNPAID WAGES CONSTITUTE AN ENFORCEABLE CLAIM,
2 THE SECRETARY SHALL, UPON THE REQUEST OF THE EMPLOYE, LABOR
3 ORGANIZATION OR PARTY TO WHOM ANY TYPE OF WAGES IS PAYABLE, TAKE
4 AN ASSIGNMENT IN TRUST, FROM THE REQUESTING PARTY OF SUCH CLAIM
5 FOR WAGES WITHOUT BEING BOUND BY ANY OF THE TECHNICAL RULES
6 RESPECTING THE VALIDITY OF ANY SUCH ASSIGNMENTS AND MAY BRING
7 ANY LEGAL ACTION NECESSARY TO COLLECT SUCH CLAIM, SUBJECT TO THE
8 RIGHT BY THE EMPLOYER TO SET-OFF OR COUNTER-CLAIM AGAINST THE
9 ASSIGNING PARTY. UPON ANY SUCH ASSIGNMENT, THE SECRETARY SHALL
10 HAVE THE POWER TO SETTLE AND ADJUST ANY SUCH CLAIM TO THE SAME
11 EXTENT AS MIGHT THE ASSIGNING PARTY.
12 (F) THE COURT IN ANY ACTION BROUGHT UNDER THIS SECTION
13 SHALL, IN ADDITION TO ANY JUDGMENT AWARDED TO THE PLAINTIFF OR
14 PLAINTIFFS, ALLOW COSTS FOR REASONABLE ATTORNEYS' FEES OF ANY
15 NATURE TO BE PAID BY THE DEFENDANT.
16 (G) NO ADMINISTRATIVE PROCEEDINGS OR LEGAL ACTION SHALL BE
17 INSTITUTED UNDER THE PROVISIONS OF THIS ACT FOR THE COLLECTION
18 OF UNPAID WAGES OR LIQUIDATED DAMAGES MORE THAN THREE YEARS
19 AFTER THE DAY ON WHICH SUCH WAGES WERE DUE AND PAYABLE AS
20 PROVIDED IN SECTIONS 3 AND 5.
21 (H) THE SECRETARY MAY ENTER INTO RECIPROCAL AGREEMENTS WITH
22 THE DEPARTMENT OR CORRESPONDING AUTHORITY OF ANY STATE OR
23 TERRITORY FOR THE COLLECTION IN SUCH OTHER STATES OF CLAIMS AND
24 JUDGMENTS FOR WAGES BASED UPON CLAIMS ASSIGNED TO THE SECRETARY.
25 (I) THE SECRETARY MAY COMMENCE ACTIONS IN THE COURTS OF
26 ANOTHER STATE OR TERRITORY, OR ASSIGN SUCH ACTIONS TO THE
27 DEPARTMENT OR CORRESPONDING AUTHORITY OF ANOTHER STATE OR
28 TERRITORY, FOR THE COLLECTION OF CLAIMS AND JUDGMENTS ASSIGNED
29 TO THE SECRETARY UNDER THIS SECTION: PROVIDED, HOWEVER, THAT
30 SUCH ACTIONS ARE CONDUCTED PURSUANT TO A RECIPROCAL AGREEMENT
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1 WITH THAT STATE OR TERRITORY.
2 (J) THE SECRETARY MAY COMMENCE ACTIONS IN A COURT OF THIS
3 COMMONWEALTH FOR THE COLLECTION OF CLAIMS ASSIGNED FROM THE
4 DEPARTMENT OR OTHER CORRESPONDING AUTHORITY OF ANOTHER STATE OR
5 TERRITORY, TO THE EXTENT AUTHORIZED BY THIS ACT FOR SUCH CLAIMS
6 ARISING IN THIS COMMONWEALTH: PROVIDED, HOWEVER, THAT SUCH STATE
7 OR JURISDICTION ACCORDS SIMILAR PRIVILEGES TO THE SECRETARY BY
8 STATUTE OR RECIPROCAL AGREEMENT.
9 Section 3. This act shall take effect in 180 days.
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