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Super Liens of the Texas Workforce Commission

by Paul Myers
Barrett Burke Wilson Castle Daffin & Frappier, L.L.P. — USFN Member (TX)

Nearly five years ago, the Texas legislature gave “super” status to Texas Workforce Commission Administrative Liens established under Chapter 61 of the Texas Labor Code. Texas Labor Code § 61.0825 provides: “a lien established under this subchapter is superior to any other lien on the same property, with the exception of a lien for ad valorem taxes.”

This statute is specific to liens filed under “this subchapter.” Section 61.0825 falls in the subchapter that provides for administrative liens for wages under Chapter 61 of the Texas Labor Code. Chapter 61 of the Texas Labor Code deals exclusively with payment of wages. In particular, § 61.051 provides that an employee who is not paid in accordance with law may file a claim with the Texas Workforce Commission for the enforcement of the wage claim.

Additionally, § 61.053 of the Texas Labor Code allows for the Commission to assess penalties against the employer or employee who files a claim in “bad faith.” Section 61.081(a) of the Texas Labor Code states that “a final order of the commission against an employer indebted to the state for penalties or wages, unless timely appealed to a court, is a lien on all the property belonging to the employer.”

The liens given the “super” status are liens for wages and penalties due from employers. Furthermore, in the Historical and Statutory Notes, the comments say “this Act takes effect September 1, 2001, and applies to a lien imposed by the Texas Workforce Commission under Chapter 61, Labor Code, without regard to whether the lien was imposed before, on, or after that date.”

Therefore, mortgage companies should be aware that they will be called upon to pay off Texas Workforce Commission Liens that are filed before or after their deed of trust, when those liens are for wages and/or penalties imposed under Chapter 61 of the Texas Labor Code. These liens are distinguishable from other liens filed by the Texas Workforce Commission, such as state tax liens filed under Chapter 201 of the Texas Labor Code. Chapter 201 liens for unemployment compensation taxes are typical state tax liens and would generally be wiped out by the foreclosure of a deed of trust.

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January e-Update