Combatting Wage Theft: Establishing Employees as Secured Creditors Under the Maryland Unpaid Wage Lien Law

Rebecca Lineberry

Wage theft is not a new concept in Maryland or the United States. Although scholars and policymakers have not shied away from suggesting innovative solutions to combat wage theft, policymakers face a multitude of obstacles when attempting to pass effective legislation to combat wage theft. First, it is very difficult to precisely measure the pervasiveness of wage theft. Second, individuals who consider themselves to be “probusiness” are fearful that these measures will harm business owners and ultimately the economy by creating barriers that make it more difficult for employers to hire employees and discourage entrepreneurs from creating new businesses.

Recognizing the need for a simple mechanism that would allow workers like Ms. Orellana and Mr. Sloat to collect owed wages without the need for costly and time-consuming litigation, Maryland became one of the first states to enact an unpaid wage lien law. Simply put, the Maryland Unpaid Wage Lien Law (“MUWLL”) allows employees to place a lien on an employer’s property to collect the wages their employer owes them. Though the statute was intended to be a simple and effective tool for employees, the phrasing of the statute and the lack of legislative history have left an open question as to what priority employees with liens on their employers’ property are afforded in relation to other claims on the employers’ property. Indeed, the law empowers employees by providing them with a simple mechanism to collect unpaid wages without the need for counsel or a formal complaint. Additionally, if used on a large scale, the MUWLL will relieve some of the overwhelmed state agencies by reducing the number of investigations and subsequent litigation these agencies must complete.

This Comment analyzes the MUWLL to determine what priority employees’ liens are afforded under the statute. This Comment argues that employees with liens under the MUWLL have perfected security interests. Though there is no smoking gun that indicates the statute affords employees this status, this Comment uses a holistic approach to analyze the text of the statute, the procedure that the law mandates, the little legislative history of the law, and other states’ lien laws to show that employees are considered to be secured creditors with priority under the MUWLL.