Perspectives

Current through June 1, 2025

Whether you’re a subcontractor, supplier, or equipment rental provider working on commercial or public projects in Wisconsin, understanding your lien and bond rights is essential for protecting your bottom line. While Wisconsin has not introduced substantive statutory changes in the past year, the state’s lien and bond laws include some of the strictest—and most technical—notice rules in the region. Missing even one deadline can eliminate your right to recover payment.

This guide breaks down the current Wisconsin lien, bond, and “lien against funds” laws in a straightforward way so you can stay compliant and get paid.

Private (Commercial) Projects: Mechanic’s Liens in Wisconsin

Who Has Lien Rights?

You may assert a mechanic’s lien if you contract with:

• The owner

• The prime contractor

• A subcontractor

Wisconsin statutes also strongly suggest that claimants contracting with sub-subcontractors may preserve lien rights.

No Preliminary Notice Required

Thanks to the 2006 statutory updates, Wisconsin eliminated the 10-day and 60-day preliminary notice requirements for commercial projects.

That means:

• No early notice to owners or prime contractors is required.

• Your lien rights remain intact without any preliminary notice—with one exception involving private payment bonds (more on that below).

Mechanic’s Lien Filing Deadlines

Wisconsin has a two-step process:

 Serve Notice of Intent to File a Lien

• Must be sent to the owner by certified mail

• Must be served at least 30 days before filing your lien

• Must be served no later than 5 months after your last furnishing date

 File the Mechanic’s Lien

• Must be filed within 6 months after your last furnishing date

• After filing, you must serve a copy of the lien on the owner via certified mail within 30 days

Because the Notice of Intent requires specific title information and strict timelines, claimants should start this process shortly after month four.

Foreclosing Your Lien

Once your mechanic’s lien is filed:

• You have two years from the filing date to commence a foreclosure lawsuit.

This is longer than many states, but delays can complicate recovery efforts—starting earlier is always safer.

Wisconsin’s “Double Jeopardy” Lien Rule

Wisconsin is extremely claimant-friendly here:

Your lien remains valid even if the owner already paid the prime contractor in full before you filed.

This protects subcontractors and suppliers from upstream payment issues.

Private Payment Bonds: Special Rules Every Claimant Should Know

Payment bonds on private projects are not mandatory—but when a bond is issued, Wisconsin law becomes more complex.

Why? Because the bond terms control.

Even though Wisconsin statutes don’t require notice, the bond itself may require a 90-day notice. Courts have enforced this—even when the claimant never received or saw the bond.

Key Action: Determine early if a bond exists

You have the right to request a copy of the bond from:

• The owner, and

• The prime contractor

Use certified mail and request the bond within 90 days of your first furnishing date.

If a Valid Payment Bond Is Furnished

The bond may:

• Eliminate mechanic’s lien rights, and

• Replace them with rights against the bond instead

But only if:

• The bond includes the statutory language

• It is approved by the owner

• It is approved by the mortgage lender

If any of these elements are missing, you still retain your mechanic’s lien rights.

Preliminary Notice Requirement for Private Bonds

If a proper private payment bond exists, you must:

• Serve a 60-day preliminary notice

• On the prime contractor via certified mail

• Within 60 days after your first furnishing date

If the notice is late, the law says it is invalid—but you should still send it, as it may protect you if other statutory exemptions apply.

Lawsuit Deadline for Private Bond Claims

A lawsuit must be started within one year after the project’s completion.
Because completion dates are often unclear, best practice is:

Use a conservative deadline of one year from your last furnishing date.

“Lien Against Funds” Claims on Private Projects

If a valid private payment bond exists, Wisconsin allows claimants to assert a “lien against funds” claim, which attaches to any money the owner still owes the prime contractor.

Key rules:

• Available only if you contracted with the prime contractor or a first-tier subcontractor

• Not available for claimants working under a sub-subcontractor

• No formal deadline—but the claim is only effective if the owner still holds funds

• Early service increases the likelihood of success

If the prime contractor or subcontractor disputes your claim within 30 days, you must start a lawsuit within three months.

Public Projects: Payment Bonds and Claims in Wisconsin

Wisconsin requires payment bonds on public projects when:

• The contract exceeds $148,000

This applies to most public construction—but with unique exceptions for highway improvement projects.

Who Has Bond Rights?

For non-highway public projects:

• Claimants contracting with the prime contractor or subcontractor have bond rights

• Sub-subcontractors likely do not

For highway improvement projects:

• Only claimants contracting directly with the prime contractor have rights

• No bond rights exist for claimants contracting with subcontractors

• Some county-executed highway projects may not require bonds at all

If you’re unsure whether your project qualifies as a highway improvement, have the bond documents reviewed early.

60-Day Preliminary Notice Required

To preserve bond rights, you must:

• Serve a 60-day preliminary notice

• On the prime contractor by certified mail

• Within 60 days after your first furnishing date

This applies whether you contract with the prime contractor or a subcontractor.

If you miss the deadline, still serve the notice—there are narrow exceptions.

Final Bond Claim Notice

Wisconsin does not require a final notice, but sending one is often beneficial to involve the surety early.

Lawsuit Deadline

You must file suit:

• Within one year after project completion

As with private bond claims, because completion dates are often unclear:

Use a conservative deadline of one year from your last furnishing date.

“Lien Against Funds” Claims on Public Projects

Wisconsin allows claimants contracting directly with the prime contractor to assert a lien on unpaid public funds still held by the public owner.

Key points:

• Sub-subcontractors cannot use this remedy

• No strict deadline, but it only works if funds remain unpaid

• A lawsuit to enforce the lien must be filed within three months after serving the claim

Additional Wisconsin Construction Law Notes

Trust Fund Claims

Wisconsin’s trust fund statute provides powerful protection:

• Funds paid or due to the prime contractor or subcontractor become trust funds

• Misuse of funds can create civil or criminal liability

• Particularly useful in bankruptcy or insolvency situations

Equipment Rental

Wisconsin permits lien claims for equipment rental.

Attorney Fees

Wisconsin does not allow attorney’s fees in mechanic’s lien foreclosure actions.

Pay-If-Paid Clauses

These clauses are not enforceable in Wisconsin.
However, “pay-when-paid” timing provisions are allowed.

Wisconsin’s lien and bond laws offer strong protections—but only if you understand and comply with their technical requirements. From 60-day notices to multi-step lien filings, the timing and accuracy of each step has a direct impact on your ability to recover payment. The construction law team at Wagner, Falconer & Judd is here to help you navigate these rules with confidence. If you have questions about a specific project, notice requirements, payment bond concerns, or enforcing a private or public claim, reach out to WFJ. We’re here to protect your rights and ensure you get paid for the work you perform.

Big changes are coming for Minnesota Employers in 2026. Are you ready?

Beginning January 1, 2026, Minnesota’s Paid Family and Medical Leave (Paid Leave) program goes into effect. This state-mandated benefit will provide partial wage replacement for employees who need time away from work due to qualifying life events-like bonding with a new child, caring for a loved one, or managing a serious health condition.

What Employers Need to Know

Covered Employers and Employees

All private and public employers are covered under MN Paid Leave, except for the federal government. Most employees, full-time, part-time, temporary and seasonal, will qualify if they’ve earned at least $3,900 in the previous year and have performed at least 50% of their work in Minnesota.

When It Starts

Payroll deductions and benefits begin January 1, 2026.

First premium payments are due April 30, 2026.

Premiums and Contributions

The 2026 premium rate is 0.88% of wages, split even between employer and employee. Small employers (30 or fewer employees with average wages under 150% of the state average) will receive a reduced rate of 0.66%.

Qualifying Reasons for Paid Leave

• Employee’s own serious health condition
• Bonding with a new child after birth, adoption, or foster placement
• Caring for a family member with a serious health condition
• Family member’s active military duty
• Safety leave related to domestic abuse, sexual assault, or stalking

Employee can take up to 20 weeks of combined family and medical leave per year.

Action Steps for Employers

1. Set up your accounts: Create your UI/Paid Leave and Paid Leave Administrator accounts.
2. Notify Employees by December 1, 2025: Post the MN Paid Leave poster and issue written notices.
3. Decide on premium sharing: Determine your employer/employee split (default is 50/50).
4. Consider supplemental benefits: Decide whether to offer PTO or disability coverage to supplement paid leave.
5. Plan for intermittent leave: Employers must allow at least 480 hours per year.

Private Plans

Employers may opt out of the state program by offering an equivalent private plan-applications must be submitted by November 15, 2025 for coverage beginning January 2026.

Key Deadlines

• November 15, 2025: Private plan submissions due
• December 1, 2025: Employee notice and poster requirement
• January 1, 2026: Program goes live; payroll deductions begin
• April 30, 2026: First premium payments due

Need Help Getting Ready?

WFJ offers compliance support, HR consulting, and best-practice guidance to help employers prepare for MN Paid Leave.

Conducting background checks is one of the most effective ways employers can protect their business, employees, and customers-but doing so incorrectly can create costly legal risk. Between overlaping state laws, federal regulations, and applicant rights, it’s critical for employers to know how to navigate this process the right way.

At Wagner, Falconer & Judd, we help employers build compliant hiring practices that support safety and fairness while minimizing exposure to litigation. Below is a practical overview of what you need to know before your next background check.

Why Conduct Background Checks?

A well-executed background check helps employers:

• Ensure workplace safety and protect customers and employees
• Safeguard company assets from theft, fraud, or reputational damages
• Verify applicant information to confirm experience and integrity
• Reduce exposure to negligent hiring claims that can arise when an employee’s history should have raised red flags

Example: Hiring a shuttle van driver without verifying driving or criminal history can expose a company to a negligent hiring claim if that driver later causes harm while intoxicated on the job.

Key Legal Frameworkds

Minnesota Law

Minnesota’s background check requirements are detailed and unique:

Consumer Reports

• If a written employment application is used, a consumer report disclosure must accompany it.
• Employers must provide a checkbox for applicants to request a copy of the report
• If requested, the employer is required to obtain and share that copy with the applicant

“Ban the Box”

Employers cannot inquire about criminal history until:

• The applicant is selected for an interview or
• A conditional offer of employment has been made (if no interview occurs)

Appicants don’t have a private right to sue under this law, but they can file complaints with the Minnesota Department of Human Rights or under administrative procedure.

Federal Law- The Fair Credit Reporting Act (FCRA)

The FCRA governs how employers use background and consumer reports for hiring, promotion, or retention.

Key employer requirements include:

• Clear disclosure and written consent before obtaining a report
• Pre-adverse action notice if the report could lead to a negative employment decision
• Final adverse action notice after a decision is made, including the applicant’s right to dispute the report’s accuracy.

Violations can be costly-up to $1,000 per violation, plus attorney’s fees, punitive damages, and potential federal enforcement actions. 

Applicant Rights Under the Law

Applicants have the right to:

• Consent before a report is obtained
• Be informed if the report influences an employment decision
• Dispute inaccurate information with the consumer reporting agency

While having a criminal record is not a protected class under Title VII, employers can face liability if their background check policies result in disparate treatment or impact against a protected group.

Avoiding Discrimination: Title VII and EEOC Guidance

To comply with EEOC guidance, employers should:

• Conduct individualized assessments rather than automatic rejections.
• Consider:
  • The nature and gravity of the offense
  • The time elapsed since the offense or sentence
  • The relevance to the specific job
• Give applicants the chance to explain or provide context for their record
• Maintain documentation of how hiring decisions are made and train hiring staff on compliance

Best Practices for Employers

• Use a stand-alone disclosure form for FCRA compliance
• Wait at least five business days after a pre-adverse action notice before issuing a final decision
• Work only with certified consumer reporting agencies that require FCRA compliance verification
• Avoid illegal application questions, such as:
  • “Have you ever been arrested or convicted?”
  • “Have you been convicted of a felony?”
  • “Have you had any driving violations?”
• Document your decision-making process and ensure policies are job-related and consistent with business necessity.

Common Employer Mistakes

• Combining state disclosures with federal FCRA notices
• Rejecting candidates automatically due to any criminal record
• Failing to provide copies of reports when requested
• Overlooking the need for individualized assessment or applicant discussion

Even well-intentioned hiring decisions can lead to exposure if procedures aren’t compliant. 

Final Takeaway

Background checks are essential for protecting your business-but they must be handled with precision. Employers who understand the interplay between Minnesota law, the FCRA, and EEOC guidance are better positioned to hire confidently and defensibly.

At Wagner, Falconer & Judd, our Employment Law team works closely with employers to create compliant background check procedures and hiring policies that stand up to scrutiny.

Need a compliance check up? 

WFJ can help review your forms, update your policies, and train your HR staff to avoid costly missteps.

California has finally delivered the clarity trade creditors have been waiting for. With Governor Newsom’s signing of AB 1521 on October 1, 2025, California law now formally defines “trade credit” and makes clear that it is not a “covered commercial debt” under SB 1286.

What This Means for Trade Creditors

For the past year, SB 1286 created significant confusion in the credit community. The law, which took effect July 1, 2025, expanded California’s Rosenthal Fair Debt Collection Practices Act-a statute designed for consumer debt-to include certain small-business debts.

The issue? It wasn’t clear whether open-account trade credits-the type of commonly used by material suppliers, distributors, and contractors-was also included. This lack of clarity created compliance concerns and unnecessary costs for businesses whose focus is selling goods and services, not acting as lenders.

AB 1521 resolves that uncertainty by recognizing what credit professionals have long understood: trade credit is different.

Key Fixes Under AB 1521

AB 1521 amends California Civil Code and does two important things:

1. Expressly excludes trade credit from the definition of “covered commercial debt.”
2. Defines trade credit for the first time in California law as:
   • Credit extended by a business primarily engaged in providing goods, materials, equipment, or services; and
   • Credit extended in connection with those goods or services (unless structured as lease financing under the Financial Code).

This change formally separates trade credit from loans, commercial financing, and debt buying-recognizing it as its own category of credit essential to B2B commerce.

Key Dates to Know

• SB 1286 applies to covered commercial debts entered into, renewed, sold, or assigned on or after July 1, 2025.
• AB 1521 takes effect January 1, 2026, officially defining and excluding trade credit from SB 1286.

What You Should Do Now

While AB 1521 doesn’t take effect until January 1, 2026, its legislative history makes one point clear: trade credit was never intended to fall under SB 1286.

That gives trade creditors a defensible position to treat open-account credit as excluded even during the interim period between July 1, 2025, and January 1, 2026.

Still, every business is different. Now is the time to:

• Review your credit policies and agreements to ensure they align with the updated definitions.
• Confirm that your collection practices remain compliant and clearly distinguish trade credit from financing activities.
• Consult with experienced legal counsel to determine how these changes impact your specific credit operations.

Why This is a Win for Suppliers and Distributors

This legislation isn’t just a fix-it’s a recognition. AB 1521 affirms that trade credit is a vital part of doing business. By clearly defining and excluding it from SB 1286, California law now better reflects how suppliers, contractors, and distributors operate in the real world.

You can continue extending credit terms with confidence, without the concern of being subject to consumer-style debt collection rules that were never designed for B2B transactions.

How We Can Help

WFJ has been closely following SB 1286 and AB 1521 developments from the beginning. Our attorneys regularly assist clients in reviewing credit terms, contracts, and collection practices to ensure compliance while maintaining strong customer relationships.

If you have questions about how these legislative updates impact your business, we’re here to help you interpret the changes and take proactive steps to stay protected.

Compliance Best Practices, Prohibited Conduct, and the High Cost of Getting It Wrong

In Part 1, we explained the key changes brought by California’s SB 1286, including which debts and debtors are now covered, the new notice requirements, how to respond to debtor requests, and how to handle identity theft claims.

In Part 2, we’ll cover the next critical pieces:

• What conduct is now prohibited
• What information you should have at intake
• Practical compliance recommendations
• Legal gray areas
• And the risks of noncompliance under Rosenthal

Let’s get into it.

Prohibited Conduct Under Rosenthal (As Amended by SB 1286)

SB 1286 reinforces and expands the types of conduct debt collectors must avoid when collecting covered debt. Violations-even if unintentional-can lead to serious legal consequences.

Prohibited actions include:

• Threatening or harssing language
• False or misleading statements
• Obscene or profane language
• Calling excessively or at unreasonable times
• Communicating with third parties, including employers
• Adding unauthorized fees or interest
• Collecting time-barred debt without proper disclosures
• Recording phone calls without the debtor’s consent
• Abuse of legal process (e.g., improper lawsuits)
• Failing to provide required disclosures

WFJ Tip: Follow Regulation F guidelines under the FDCPA to remain in compliance:

• “No more than 7 calls in 7 days”
• “No more than 1 live conversation within that timeframe”
• “Contact only between 8 am and 9 pm (debtor’s local time)”
• “Don’t send emails or texts at odd hours-or if the debtor says it’s inconvenient”
• “If the debtor asks you to stop contacting them-stop”

What to Have Ready at Intake

Before starting collection efforts, make sure your file includes:

• A copy of the contract, if one exists
• If no contract, all documents that support the existence of the debt
• For credit accounts, the most recent statement showing the last purchase or payment

Being prepared upfront can help you comply quickly if the debtor makes a written request-and reduce the risk of having to stop collection midstream.

Compliance Recommendations from WFJ

To stay ahead of the July 1, 2025 enforcement date, we recommend making the following updates:

Update Your Process

• Implement a system to track written requests and disputes
• Update phone scripts, letters, and templates with new required language

Review Your Intake and Documentation Procedures

• Require all supporting documents from creditors efore initiating collection
• Confirm that charges like interest, late fees, and penalties are clearly documented.

Educate Your Clients

• Make sure your clietns understand what information is required
• Share the updated procedures and expectations

Train Your Team

• Create or update training programs for staff
• Emphasize communication do’s and don’ts under Rosenthal

Conduct Regular Internal Audits

• Tailor the frequency to your organization’s size, volume, and past audit results
• Use audits to ensure compliance across all active accounts

Legal Gray Areas to Watch

Some parts of SB 1286 leave unanswered questions. Until further legal guidance or case law emerges, WFJ recommends erring on the side of caution.

Are Sole Proprietors Covered?

Likely, yes. Treat them like individual guarantors.

Is Real Estate-Secured Debt Covered?

Probably. Best to treat it as covered unless clearly executed.

Where Can You File Suit?

Even if there is a contractual venue clause, Rosenthal may require you to sue in:

• The ounty where the debtor currently lives
• The county where the debt was incurred
• The county where the debtor lived when the debt was incurred

WFJ Recommendation: Until these gray areas are litigated, assume coverage. Treating a debt as if it’s covered does not make it covered, but failing to do so when it could cost you.

The Cost of Noncompliance

California has an active consumer litigation bar-and SB 1286 is likely to increase enforcement and lawsuits. If you violate Rosenthal (even unintentionally), the consequences can be serious:

• Costly legal defense
• Settlements
• Attorney’s fees awarded to the debtor
• Ongoing litigation exposure

Remember, Rosenthal is a strict liability statute. That means intent doesn’t matter in most cases. The only real defense is the bona fide error defense, which requires proof that your procedures were designed to prevent the mistake.

Final Thoughts from WFJ

The best protection is preparation. Here’s what you can do now:

• Update your processes before the law takes effect
• Train your staff and inform your clients
• Conduct audits and stay ahead of compliance risks
• When in doubt, treat the debt as covered
• Work with experienced counsel to develop compliant systems

A Friendly Legal Reminder from WFJ

This blog is for educational purposes only and does not constitute legal advice. For guidance on how SB 1286 applies to your organization, consult with an attorney experienced in debt collection and Rosenthal compliance.

California’s SB 1286, effective July 1, 2025, expands the Rosenthal Fair Debt Collection Practices Act to include certain commercial debts. For businesses and law firms involved in debt collection, understanding these changes is critical to staying compliant and avoiding costly legal issues.

Which Debts Are Covered?

SB 1286 appies to “Covered Commercial Debt” or “Covered Commercial Credit” entered into, renewed, sold, or assigned on or after July 1, 2025.

A debt is considered covered if:

• It is owed by a natural person (not an LLC or corporation)
• The cummulative debt is $500,000 or less
• The debtor is either the primary obligor or a guarantor of a covered commercial debt

Covered debt can include money owed to:

• Lenders
• Commercial financing providers
• Debt buyers

In short, individual guarantors of commercial debt are now protected under Rosenthal if the debt is $500,000 or less.

Who Must Comply?

SB 1286 applies to:

• Original creditors
• Assigneeds
• Debt buyers
• Collection agencies
• Law firms regularly engaged in debt collection

Notice Requirements

Debt collectors must provide a specific notice in their first written communication with a debtor. This notice must clearly explain the debtor’s right to request records that include:

• Authorization to collect the debt
• The debt balance, including interest and fees
• Dates of delinquency or last payment
• Creditor name and account number
• Debtor’s last known address from the creditor’s records
• Names and addresses of any other parties that debt was assigned to

If the debt arises from an oral contract in a language other than English, the notice must be provided in that language. Additionally, if the collector primarily used a non-English language during the initial contact, the written notice must be delivered in that language within 5 business days.

Responding to Written Requests

If a debtor submits a written request for more information, collectors must provide:

• Proof of authority to collect the debt
• A breakdown of the debt balance, interest, and fees
• Dates of delinquency or last payment
• Creditor name, address, and account number
• Debtor’s last known address
• Names and addresses of any other assignees
• Debt collector’s California license number, if applicable

This information must be provided within 30 calendar days, and if it cannot be produced within that timeframe, all collection activity must stop until it is available.

| WFJ recommends treating any dispute or request for additional information as a formal “written request” to ensure compliance.

Identity Theft Claims

If a debtor claims identity theft, whether orally, in writing, or via police/FTC report, all collection activity must stop until a good faith determination is made that the debtor is responsible for the debt.

If collection continues, the debtor must be notified of the results of the investigation. If reporting to credit bureaus, any account under investigation must be removed if collection ceases.

Up Next: Part 2- Compliance, Conduct, and Consequences. Stay tuned for Part 2, where we will break down the steps you should take now to comply and protect your organization from risk.

Background

Assets:

• Checking and savings accounts (~$5,000)
• A car (fully owned)
• Personal belongings, including a laptop, furniture, and jewelry
• A modest life insurance policy through work

Emily always assumed esate planning was something she could address later in life-after marriage, buying a home, or building significant wealth. Like many young professionals, she believed she simply didn’t have “enough” to justify creating a will.

The Turning Point

After attending a friend’s funeral where no estate plan was in place, Emily witnessed firsthand the confusion and family conflict that followed:

• Family members didn’t agree on who should receive personal belongings
• The bank account was frozen, delaying access to funds for funeral expenses
• Friends were unsure of what Emily’s friend would have wanted for the distribution of items with sentimental value. 

Emily realized that without a will, even a modest estate can cause major complications for love ones.

What Emily Did

Emily worked with an attorney to put the following in place:

• Last Will and Testament: To ensure her assets would go to her younger sister and close friends.
• Healthcare Directive: Appointing her mother to make medical decisions if she was ever incapacitated.
• Power of Attorney: Naming her father to handle financial affairs in an emergency.

The Unexpected

Just two years later, Emily was involved in a serious car accident. While she eventually recovered, she was temporarily unconscious and unable to make medical or financial decisions. Because she had completed her estate plan:

• Her mother could immediately step in to make medical choices
• Her father was able to access her accounts to pay her rent and other bills
• Her wishes regarding her personal property were clearly documented, giving peace of mind to her family

The Takeaway

Emily didn’t have significant wealth-but she had enough to matter.

Without her estate plan:

• Her family would have had to go through the courts to gain decision-making authority
• Her accounts could have been locked
• Her loved ones may have faced conflict and uncertainty about her wishes

Estate planning isn’t just for the wealthy or the elderly-it’s for anyone who wants to protect their voice, their assets, and their family.

Even a simple will and basic documents like a Power of Attorney and Healthcare Directive can make a world of difference in an emergency.

Final Thought

The best time to create a will is before you think you need it. 

Planning ahead gives you control and protects the people you care about from legal headaches during already difficult times.