Perspectives

Liens & Bonds Protect Cash Flow

For many contractors, subcontractors, and suppliers, lien and bonds are often viewed as last-resort tools-something to use only when a project has gone seriously wrong. In reality, liens and bonds are foundational legal protections, designed to preserve cash flow and prevent disputes long before they escalate.

Used correctly and early, liens and bonds are not aggressive. They are practical business tools that protect payment rights, improve leverage, and create clarity for everyone involved in a project.

Why Cash Flow Protection Matters

In construction, cash flow is more than a financial metric-it’s the lifeblood of the business. Delayed or missed payments can ripple through payroll, materials, subcontractors, and future projects.

Liens and bonds exist because the construction industry carries unique payment risk:

• Multiple parties working under layered contracts
• Payment dependent on project programs and owner funding
• Long timelines between work performed and payment received

Legal protections help balance those risks.

Liens and Bonds are Preventative Tools

Contrary to common belief, preserving lien and bond rights does not mean starting a dispute. In fact, these tools often prevent disputes. 

By providing notice and preserving rights:

• Expectations around payment are clarified early
• Issues are identified before they become crises
• Payment discussions remain structured and professional
• Leveral exists without immediate litigation

Many payment issues are resolved simply because lien or bond rights were preserved correctly and on time.

Understanding Lien Rights

A mechanics lien provides security for payment by tying unpaid work or materials to the property itself. It encourages resolution because unresolved liens can affect financing, refinancing, and property transfers.

Key points to understand:

• Lien rights are deadline-driven and unforgiving
• Notices often must be sent early in the project
• Missing a deadline can permanently eliminate rights
• Proper compliance strengthens negotiating leverage

Preserving lien rights is about keeping options available, not creating conflict.

Understanding Bond Claims

On bonded projects, payment bonds serve a similar function-providing an alternative path to payment when direct payment stalls.

Bond Claims:

• Protect subcontractors and suppliers on pubic and private projects
• Shift payment disputes away from property owners
• Often require strict notice and timing compliance
• Can resolve payment issues without litigation

Knowing whether a project is bonded-and how to preserve bond rights-is critical to cash flow protection.

Why Using These Tools Early Matters

Waiting too long to address payment protection increases risk. Once deadlines pass, leverage disappears.

Early use of lien and bond protections:

• Signals professionalism and preparedness
• Keeps projects moving forward
• Reduces the likelihood of litigation
• Protects relationships by addressing issues before emotions escalate

When used as part of a routine process, these tools become normal business practices-not confrontational actions.

Liens and Bonds Support Strong Business Relationships

Clear expectations protect everyone. When lien and bond rights are handled properly:

• Payment obligations are transparent
• Disputes are easier to resolve
• Business relationships are preserved
• Projects are more predictable

Strong legal protections often lead to fewer conflicts-not more.

Practical Guidance Makes the Difference

At Wagner, Falconer & Judd, we work with construction businesses to treat liens and bonds as strategic tools, not emergency measures. Our approach focuses on early planning, clear communication, and practical compliance-so clients protect cash flow while maintaining professional relationships.

Because getting paid shouldn’t require a fight-and the right legal protections help ensure it doesn’t.

Growth is a good thing-but it changes more than revenue, head count, and market reach. As businesses scale, their risk profile evolves, often in ways that aren’t immediately obvious.

Strategies that worked well for a smaller, more agile organization may no longer be sufficient once operations expand, teams grow, and decisions become more complex. Without adjusting legal strategies to match that growth, businesses can unknowingly increase exposure in critical areas.

Understanding how risk shifts-and planning for it-allows growth to happen with confidence instead of uncertainty.

Why Growth Changes Risk

As a business grows, its legal footprint expands. New locations, additional employees, larger contracts, and more sophisticated operations all introduce new variables.

Common growth-related risk shifts include:

• Increase regulatory obligations
• Great exposure to employment-related claims
• Higher contract values and longer-term commitments
• More complex payment and cash flow risks
• Expanded liability tied to customers, vendors, and the public

What once felt manageable can quickly become fragmented if legal strategies don’t keep pace.

Early-Stage Risk: Informal but Limited

In early stages, businesses often operate with:

• Fewer employees
• Shorter contracts
• Limited geographic reach
• More informal processes

Risk exists, but it’s typically narrower in scope. Leadership is closely involved in decisions, and communication is direct. Legal needs often focus on basic contract formation, entity structure, and foundational compliance.

While this approach can work initially, it doesn’t scale well.

Mid-Growth Risk: Complexity Emerges

As businesses expand, risk becomes more layered.

Growth often brings:

• Supervisors and managers making daily decisions
• Multiple contracts negotiated simultaneously
• Inconsistent practices across teams or locations
• Greater reliance on templates and policies

At this stage, gaps being to appear. Outdated contracts, unclear policies, and inconsistent enforcement can create exposure-often without immediate warning signs.

This is where legal strategy becomes essential, not optional.

Mature Growth Risk: Exposure Multiplies

For larger or more established organizations, risk is no longer isolated. One issue can have cascading effects across departments, locations, or projects.

At this stage, businesses must manage:

• Multi-state or multi-jurisdiction compliance
• High-value contracts and payment disputes
• Employment policies under increased disputes
• Public-facing risk, including personal injury exposure
• Greater likelihood of audits, claims and litigation

Without structured legal oversight, small issues can escalate quickly.

Scaling with Confidence

Growth should not mean increased uncertainty. Businesses that adapt their legal strategies as they scale are better positioned to:

• Protect cash flow
• Reduce disputes
• Respond quickly to change
• Support leadership decision-making
• Sustain long-term success

Legal planning doesn’t slow growth-it supports it by removing unnecessary friction and preventing avoidable setbacks.

Legal Insight for Every Stage of Growth

At Wagner, Falconer & Judd, we work with businesses at every stage-from early growth to large, complex operations. Our focus is helping clients understand how risk evolves and building legal strategies that grow alongside their business.

Because growth changes risk-and your legal strategy should change with it.

When managing large construction, equipment, or commercial projects, protecting your company’s cash flow isn’t just a financial necessity-it’s a survival strategy. Delayed payments, disputed invoices, and broken payment chains can quickly disrupt operations and threaten profitability.

That’s where Wagner Business Solutions comes in. Backed by the legal power of Wagner, Falconer & Judd, WBS is uniquely positioned to help businesses proactively manage credit risk and protect receivables before litigation becomes necessary.

Why Pre-Litigation Protection Matters

Most companies don’t think about involving legal support until after a payment problem arises. But by then, you’re already in reactive mode-chasing funds, facing potential defaults, and spending more time and money than necessary.

WBS flips the script. Our team works hand-in-hand with credit and finance departments to help prevent payment issues from escalating through:

• legal-backed due diligence
• early enforcement tools
• lien focused strategies for receivables protection

Three Ways WBS Protects Your Cash Flow

• Mechanic’s Lien and Bond Opinion Letters

WBS offers timely, state-specific legal opinions that determine your eligibility to file a mechanic’s lien or make a bond claim. This step is vital to ensuring your company maintains leverage when a customer fails to pay.

Why it matters:

These tools act as pre-litigation enforcement options-often prompting payment without ever going to court.

• UCC-1 Filings and Security Agreements

We help clients formalize secured interests through UCC-1 filings and properly drafted security agreements. This puts your company in a stronger position to recover goods or funds if a debtor defaults.

Why it matters:

Unsecured creditors often find themselves last in line. Securing your interest increases the odds of full recovery while preserving valuable customer relationships.

• Demand Letters and Legal Escalation

Sometimes, a strongly worded demand letter from legal counsel is all it takes to get results. WBS attorneys are experienced in crafting persuasive letters that communicate your rights and readiness to act-without alienating the customer.

Why it matters:

It demonstrates seriousness while providing an opportunity for the other party to resolve the issue before litigation begins.

Partnering with Your Finance Team

WBS doesn’t replace your internal team-we enhance it. By giving credit and finance professionals the legal tools and insight they need early in the process, we help them:

• Evaluate credit applications for enforceable terms
• Strengthen internal collections procedures
• Protect lien and bond rights before the deadlines pass
• Make strategic decisions about escalation timing

The Bottom Line

Litigation should be your last resort, not your first defense. Wagner Business Solutions helps businesses across the construction, equipment, HVAC and commercial service sectors enforce payment rights early, legally, and effectively-without burning bridges.

To learn more about how WBS can support your finance team and secure your receivables before problems escalate, contact our team.

A new Minnesota law introduces significant changes to the state’s worker’s compensation system. Signed into law in May 2024, the bill enacts recommendations from the Worker’s Compensation Advisory Council and is set to impact employers and contractors across industries, especially construction companies and projects involving multiple subcontractors.

Key Updates You Should Know

Protected Claim Amount Increases from $1,000 to $3,000

One of the most notable changes is the increase in the protected claim amount-the portion of a claim shielded from subrogation or third-party recovery-to $3,000 (up from $1,000). This adjustment recognizes inflation and rising medical costs, ensuring injured workers retain a greater portion of their benefits.

Chanages Specific to the Construction Industry

The law also implements targeted updates affecting construction projects:

• Clarifies Liability in Multi-Contractor Projects: When multiple contractors or subcontractors are on-site, liability for worker injuries must be clearly understood. The new law aims to streamline how responsibility is determined in these shared jobsite scenarios.
• General Contractors Take Note: If you work with multiple subcontractors, this law reinforces the importance of maintaining up-to-date worker’s compensation certificates from all parties. It also reitereates the need for strong indeminity language and contractual risk transfer protections.
• Special Employer Rule Adjustments: The statute refines how “special employers” (like staffing agencies or general contractors using temp labor) are treated under worker’s compensation, potentially shifting liability in some claims.

Other Key Provisions

• Clarifies Timelines for Filing and Appeals: The law updates certain administrative timelines to improve efficiency and reduce disputes.
• Improves Transparency in Dispute Resolution: Employers and insurers may see improved predictability in how the Department of Labor and Industry (DLI) and the Office of Administrative Hearings (OAH) process claims.

What This Means for Construction Businesses

If you’re a construction company owner, general contractor, or a business managing multiple subs, now is the time to:

• Review your contracts to ensure proper worker’s compensation coverage and indeminifaction clauses are in place.
• Confirm that you are tracking active coverage for all subcontractors.
• Work with legal counsel to review whether your agreements adequately address risk transfer, especially in light of the protected claim amount increase.

Even if you’re not in construction, any Minnesota employer may see greater benefit amounts retained by workers and adjusted handling of disputed claims.

Need Help Reviewing Your Contracts or Coverage Strategy?

At WFJ, our team can help ensure you’re protected and compliant under Minnesota’s evolving worker’s compensation laws. Reach out to us to discuss how this law could impact your job sites and subcontractor relationships.

What Every Business Owner Should Know Before Signing

When purchasing or expanding a small business, real estate is often part of the equation-whether it’s a storefront, office, warehouse, or commercial lot. But while real estate can be a valuable asset, the contracts involved can carry major legal and financial risks if not handled properly.

At WFJ, we frequently help small business clients review real estate purchase agreements, leases, and sale-leasebacks tied to business acquisitions. Here’s what you need to know before entering into one of these deals.

Understand What You’re Really Buying

Not all real estate tied to a business is owned by the seller- it could be leased, encumbered, or shared with another entity. Before signing a contract:

• confirm who owns the property
• determine if the business use is allowed under zoning laws
• verify whether any liens, easements, or encroachments exist

Tip: Always request a copy of the title committment and survey during due dilligence.

Review Contingencies Carefully

Purchase agreements should inclue key contingencies to protect your interests, such as:

• Financing Contingency-Gives you the right to cancel if funding falls through
• Inspection Contingency-Lets you walk away if the building has structural or environmental issues
• Zoning/Use Contingency- ensures you can operate the business at that location

Without these clauses, you could be legally bound to complete a bad deal.

Pay Clost Attention to Lease Assignments

If you’re acquiring a business that leases its space, the landlord must usually approve the lease transfer or assignment to you. If the lease doesn’t permit assignments-or if the landlord won’t approve it-you could lose the space entirely.

Best Practice: Have an attorney review the ease terms before the sale and assist with any landlord negotiations.

Be Cautious of Seller Financing and Sale-Leasebacks

Some sellers offer to “carry the paper” (finance the property) or sell the property but lease it back as a tenant. While these can be viable options, they carry risk:

• What happens if the seller stops paying rent or defaults?
• Are the lease terms fair and market-based?
• Is the financing agreement properly secured?

A poorly structured deal could result in unexpected litigation-or leave you holding a property without reliable income.

Protect Yourself with Legal Review

Even the most straightforward real estate deals can involve complex legal language, hidden liabilities, or obligations that follow the property after closing.

Working with an experienced attorney-especially one who understands small business transactions-ensures that:

• the agreement is legally sound
• your liability is limited
• your rights are protected if the deal doesn’t go as planned

The Bottom Line

Real estate can be one of the most valuable assets in a business acquisition-or one of the riskiest. By understanding the key issues and involving legal counsel early in the process, you can move forward with confidence and avoid costly mistakes.

Minnesota employers, change is coming and it’s time to prepare. Beginning in 2026, the State’s new paid family and medical leave program, which is the State is calling MN Paid Leave, will provide workers with paid time off for life events like bonding with a new child, recovering from an illness, or caring for a loved one. If you’re feeling overwhelmed by the details, you’re not alone. At Wagner, Falconer & Judd, we believe in simplifying the complex, so here’s what you need to know.

The Basics: What is MN Paid Leave?

Minnesota passed MN Paid Leave in 2023, and it is a state-run insurance program that provides up to 20 weeks of paid leave per year for qualifying family or medical reasons.

• Contributions Start: January 1, 2026
• Benefits Available to Employees: January 1, 2026
• Administered by: The Minnesota Department of Employment and Economic Development (DEED)

Employer Responsibilities: What You Need to Do

Here’s your action list:

Submit Wage Reports: Starting already on October 31, 2024, you must file quarterly wage detail reports.

Start Payroll Deductions: Contributions being January 1, 2026. Employers and employees share the cost of the total premium rate of 0.88%, with employers and employees each typically paying 0.44% (employees cannot be required to pay more than 0.44%).

Post Notices: You’ll be required to post workplace notices and distribute individual notifications by December 1, 2025.

Maintain Coverage: While an employee is out on MN Paid Leave, you must maintain their health insurance and other benefits coverage.

WFJ Tip: Employers can opt out of the State program if they offer a private plan that meets State standards.

Eligibility: Who Qualifies?

Covered Employers

All private and public employers are covered and must participate in MN Paid Leave (except the federal government).

Covered Employees

To qualify for MN Paid Leave, employees must meet all of the following:

1. Earn at least 5.3% of the statewide average annual wage in the past year (about $3,700 in 2024); and

2(a) Worked at least 50% of their time in MN in a calendar year; or

2(b) If an employee (i) does not work at least 50% of their time in MN or in any other state, and (ii) the employee performs some work in MN and (iii) lives in MN for at least 50% of the calendar year.

Eligible employees includes full-time, part-time, temporary, and most seasonal employees.

Seasonal employees who work less than 150 days during any consecutive 52-week period in hospitality are generally not eligible to MN Paid Leave benefits.

Remote Employees Count Too: Even if your company is based out of state, if you have just one employee working remotely in Minnesota that satisfies the State’s eligibility requirements, then your business must participate in MN Paid Leave.

Independent contractors are not eligible under the employer’s MN Paid Leave contributions, but they may opt into the MN Paid Leave program on their own.

What Leave is Covered?

There are two main types of leave under MN Paid Leave:

• Medical Leave (up to 12 weeks): For the employee’s own serious health condition
• Family Leave (up to 12 weeks): For bonding time with a new child, caring for a family member with a serious condition, addressing a military exigency, or taking safe leave.

Combined Cap: An employee may take up to 20 total weeks of paid leave per benefit year.

Intermittent Leave: Leave can be taken in small blocks (e.g., a few hours or days at a time), with a cap of 480 hours per year for intermittent use.

Reporting and Payroll Deductions: What Goes Where?

Here’s what you’ll need to track and report:

• Quarterly wage detail reports to the State
• Employee payroll deductions (starting in 2026)
• Coordination with PTO/STD: If an employee is also receiving short-term disability (STD) or using PTO, you must report it. Benefits are adjusted to avoid duplication.

How Does MN Paid Leave Work with Other Benefits?

One of the biggest questions we hear from employers is: How does this fit with the FMLA or other leave policies?

• MN Paid Leave and FMLA run concurrently if the reason for leave is a qualifying reason under both MN Paid Leave and FMLA. If an employee qualifies for both, they can’t stack one on top of the other.
• Job protection under MN Paid Leave kicks in once an employee has worked 90 calendar days. 
• Employees can use MN Paid Leave intermittently, but you may limit them to 480 hours of intermittent leave per year.

If you already offer parental leave or short-term disability, MN Paid Leave doesn’t cancel them out, but it will likely require coordination to avoid overpayment or compliance gaps.

Private Plans: Is It Worth Opting Out?

Some employers may choose to offer a private plan instead of participating in the State-run program. To qualify, your plan must:

• Offer benefits at least equal to those provided by the State
• Be approved by DEED
• Be monitored to ensure compliance

Benefits of a private plan may include faster claims processing, better integration with existing policies, and more administrative control.

Penalties and Enforcement

Don’t ignore this law. Employees can sue to enforce rights under MN Paid Leave, and employers can face penalties between $100 and $10,000 per violation. Retaliation against employees who request or take this leave is strictly prohibited.

Your Next Steps

Here’s how to get ready now:

✅ Audit Your Workforce: Identify who may be eligible based on wage and work location.
✅ Evaluate Current Leave Policies: Understand where MN Paid Leave overlaps or conflicts with your current leave policies.
✅ Update Payroll Systems: Prepare for future contributions and reporting.
✅ Plan Your Communications: Clear employee education is critical.
✅ Consider Private Plan Options: If you want more control, explore alternatives.

Need Help Making Sense of MN Paid Leave?

At Wagner, Falconer & Judd, we’re here to help you prepare for changing laws with confidence-not confusion. From policy review to training your HR team, our attorneys can help you navigate the new law while protecting your business.

Contact us today to ensure you’re ready for Minnesota Paid Leave in 2026 and beyond. 

Looking to dive deeper into this subject? Attorney Jordan Cardenas recorded a webinar May 2025 to cover this topic in-depth. You can find that webinar here.

Minnesota employers, change is coming-and it’s time to prepare. Begining in 2026, the state’s new Paid Family and Medical Leave (PFML) program will provide workers with paid time off for life events like bonding with a new child, recovering from illness, or caring for a loved one. If you’re feeling overwhelmed by the details, you’re not alone. At Wagner, Falconer & Judd, we believe in simplifying the complex, so here’s what you need to know.

The Basics: What is PFML?

Minnesota’s PFML law, passed in 2023, is a state-run insurance program that provides up to 20 weeks of paid leave per year for qualifying family or medical reasons.

• Contributions Start: January 1, 2026
• Benefits Available to Employees: January 1, 2026
• Administered by: The Minnesota Department of Employment and Economic Development (DEED)

Employer Responsibilities: What You Need to Do

Here’s your action list:

Submit Wage Reports: Starting October 31, 2024, you must file quarterly wage detail reports.

Start Payroll Deductions: Contributions being January 1, 2026. Employers and employees share the cost-each typically pays 0.44% of wages (for a total of 0.88%).

Post Notices: You’ll be required to post workplace notices and distribute individual notifications by December 1, 2025.

Maintain Coverage: While an employee is out on PFML, you must maintain their health insurance.

WFJ Tip: Employers can opt out of the state program if they offer a private plan that meets state standards.

Eligibility: Who Qualifies?

Covered Employers

If you employ at least one person in Minnesota, even remotely-you’re subject to the PFML law.

Covered Employees

To qualify for benefits under the Minnesota PFML program, employees must meet all of the following:

• Earn at least 5.3% of the state’s average annual wage in the year prior to the leave (about $3,781.23 in 2024)
• Perform at least 50% of their work in Minnesota, or if no single state meets the 50% threshold, the employee must live in Minnesota and perform some work here
• Be a current employee, or in some cases, a former employee separated from employment for less than 26 weeks
• Provide appropariate notice and documentaiton for the leave requested

This includes full-time, part-time, seasonal, and temporary employees.

Remote Employees Count Too: Even if your company is based out of state, if you have just one employee working remotely in Minnesota, that employee is eligible and your business must comply .

Independent contractors are not eligible under the employer’s PFML contributions-but they may opt into the program on their own.

What Leave is Covered?

There are two main types of leave under PFML:

• Medical Leave (up to 12 weeks): For the employee’s own serious health condition
• Family Leave (up to 12 weeks): For bonding with a new child, caring for a family member with a serious condition, addressing a military exigency, or taking safe leave.

Combined Cap: An employee may take up to 20 total weeks of paid leave per benefit year.

Intermittent Leave: Leave can be taken in small blocks (e.g., a few hours or days at a time), with a cap of 480 hours per year for intermittent use.

Reporting and Payroll Deductions: What Goes Where?

Here’s what you’ll need to track and report:

• Quarterly wage detail reports to the state
• Employee payroll deductions (starting in 2026)
• Coordination with PTO/STD: If an employee is also receiving short-term disability (STD) or using PTO, you must report it. Benefits are adjusted to avoid duplication.

Payroll systems must be updated to reflect PFML deductions and payments on employee earning statements.

How Does PFML Work with Other Benefits?

One of the biggest questions we hear from employers is: How odes this fit with the FMLA or other leave policies?

• PFML and FMLA run concurrently when applicable. If an employee qualifies for both, they can’t stack one on top of the other.
• Job protection under PFML kicks in once an employee has worked 90 consecutive days. 
• Employees can use PFML intermittently, but you may limit them to 480 hours of intermittent leave per year.

If you already offer parental leave or short-term disability, PFML doesn’t cancel them out-ut it will likely require coordination to avoid overpayment or compliance gaps.

Private Plans: Is It Worth Opting Out?

Some employers choose to offer a private plan instead of participating in the state-run program. To qualify, your plan must:

• Offer benefits at least equal to those provided by the state
• Be approved by the Minnesota Department of Employment and Economic Development
• Be monitored to ensure compliance

Benefits of a private plan may include faster claims processing, better integration with existing policies, and more administrative control. \

Penalties and Enforcement

Don’t ignore this law. Employees can sue to enforce rights under PFML, and employers can face penalties between $100 and $10,000 per violation. Retaliation against employees who request or take this leave is strictly prohibited.

Your Next Steps

Here’s how to get ready now:

✅ Audit Your Workforce: Identify who may be eligible based on wage and work location
✅ Evaluate Current Leave Policies: Understand where PFML overlaps or conflicts
✅ Update Payroll Systems: Prepare for future contributions and reporting
✅ Plan Your Communications: Clear employee education is critical
✅ Consider Private Plan Options: If you want more control, explore alternatives

Need Help Making Sense of PFML?

At Wagner, Falconer & Judd, we’re here to help you prepare for changing laws with confidence-not confusion. From policy reivew to training your HR team, our attorneys can help you navigate the new law while protecting your business.

Contact us today to ensure you’re ready for Minnesota PFML in 2026-and beyond.