S T A T E   O F   N E W   Y O R K
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                                  8084

                            I N  S E N A T E

                              June 7, 2010
                               ___________

Introduced  by Sen. SQUADRON -- read twice and ordered printed, and when
  printed to be committed to the Committee on Labor

AN ACT to amend the labor law, in relation to independent contractors

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The labor law is amended by adding two new sections 196-b
and 196-c to read as follows:
  S 196-B. DEFINITIONS. FOR PURPOSES OF THIS SECTION THE TERM:
  1. "COMPENSATION" MEANS THE EARNINGS  OF  AN  INDEPENDENT  CONTRACTOR.
THE TERM "COMPENSATION" ALSO INCLUDES REIMBURSEMENT FOR EXPENSES.
  2.  "INDEPENDENT  CONTRACTOR"  MEANS  A  SOLE PROPRIETOR WHO IS NOT AN
EMPLOYEE AND WHO IS HIRED OR RETAINED BY A CLIENT FOR AN AMOUNT EQUAL TO
OR GREATER THAN SIX HUNDRED DOLLARS.
  3. "CLIENT" INCLUDES A PERSON, CORPORATION, LIMITED LIABILITY COMPANY,
ASSOCIATION OR NON-PROFITMAKING ORGANIZATION CONTRACTING WITH  AN  INDE-
PENDENT  CONTRACTOR  IN  ANY  OCCUPATION,  INDUSTRY,  TRADE, BUSINESS OR
SERVICE FOR AN AMOUNT EQUAL TO OR GREATER THAN SIX HUNDRED DOLLARS.  THE
TERM "CLIENT" SHALL NOT INCLUDE A GOVERNMENTAL AGENCY.
  S  196-C.  PAYMENT  OF  INDEPENDENT  CONTRACTORS.  1.  AN  INDEPENDENT
CONTRACTOR  SHALL BE PAID THE COMPENSATION EARNED IN ACCORDANCE WITH THE
AGREED WORK TERMS BUT NOT LATER THAN THE LAST DAY OF THE MONTH FOLLOWING
THE MONTH IN WHICH THE COMPENSATION IS EARNED.  THE  AGREED  WORK  TERMS
SHALL BE REDUCED IN WRITING, SIGNED BY BOTH THE CLIENT AND THE INDEPEND-
ENT CONTRACTOR, KEPT ON FILE BY THE CLIENT FOR A PERIOD OF NOT LESS THAN
SIX  YEARS  AND  MADE  AVAILABLE  TO THE COMMISSIONER UPON REQUEST. SUCH
WRITING SHALL INCLUDE A DESCRIPTION OF HOW COMPENSATION EARNED AND PAYA-
BLE SHALL BE CALCULATED. THE FAILURE OF A CLIENT TO PRODUCE SUCH WRITTEN
WORK TERMS, UPON REQUEST OF THE  COMMISSIONER,  SHALL  GIVE  RISE  TO  A
PRESUMPTION THAT THE TERMS THAT THE INDEPENDENT CONTRACTOR HAS PRESENTED
ARE THE AGREED TERMS.
  2.  THE COMMISSIONER SHALL INVESTIGATE AND ATTEMPT TO ADJUST EQUITABLY
CONTROVERSIES BETWEEN CLIENTS AND INDEPENDENT  CONTRACTORS  RELATING  TO
THIS SECTION.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD17438-03-0
              

S. 8084                             2

  3. THE COMMISSIONER MAY TAKE ASSIGNMENTS OF CLAIMS FOR COMPENSATION AS
DEFINED  IN  SECTION ONE HUNDRED NINETY-SIX-B OF THIS ARTICLE FROM INDE-
PENDENT CONTRACTORS OR THIRD  PARTIES  IN  TRUST  FOR  SUCH  INDEPENDENT
CONTRACTORS  OR  FOR THE VARIOUS FUNDS FOR SUCH INDEPENDENT CONTRACTORS.
ALL  SUCH ASSIGNMENTS SHALL RUN TO THE COMMISSIONER AND HIS SUCCESSOR IN
OFFICE. THE COMMISSIONER MAY SUE COMPANIES ON COMPENSATION  CLAIMS  THUS
ASSIGNED.  HE  MAY  JOIN  IN  A SINGLE ACTION ANY NUMBER OF COMPENSATION
CLAIMS AGAINST THE SAME COMPANY.
  4. ANY  INDEPENDENT  CONTRACTOR  MAY  FILE  WITH  THE  COMMISSIONER  A
COMPLAINT  REGARDING A VIOLATION OF THIS ARTICLE FOR AN INVESTIGATION OF
SUCH COMPLAINT AND STATEMENT SETTING THE  APPROPRIATE  REMEDY,  IF  ANY.
FAILURE  OF A CLIENT TO KEEP ADEQUATE RECORDS SHALL NOT OPERATE AS A BAR
TO FILING OF A COMPLAINT BY AN INDEPENDENT CONTRACTOR.  IN SUCH  A  CASE
THE  CLIENT  IN  VIOLATION  SHALL  BEAR  THE  BURDEN OF PROVING THAT THE
COMPLAINING INDEPENDENT CONTRACTOR WAS PAID COMPENSATION.
  5. ON BEHALF OF ANY INDEPENDENT CONTRACTOR PAID LESS THAN THE  COMPEN-
SATION  TO WHICH HE OR SHE IS ENTITLED UNDER THE AGREED WORK TERMS UNDER
THE PROVISIONS OF THIS ARTICLE, THE COMMISSIONER  MAY  BRING  ANY  LEGAL
ACTION NECESSARY, INCLUDING ADMINISTRATIVE ACTION, TO COLLECT SUCH CLAIM
AND  AS PART OF SUCH LEGAL ACTION, IN ADDITION TO ANY OTHER REMEDIES AND
PENALTIES OTHERWISE AVAILABLE UNDER THIS ARTICLE, THE  COMMISSIONER  MAY
ASSESS  AGAINST  THE  CLIENT  AN ADDITIONAL AMOUNT AS LIQUIDATED DAMAGES
EQUAL TO TWENTY-FIVE PERCENT OF THE TOTAL AMOUNT OF  COMPENSATION  FOUND
TO  BE  DUE,  UNLESS  THE CLIENT PROVES A GOOD FAITH BASIS FOR BELIEVING
THAT ITS UNDERPAYMENT OF COMPENSATION WAS IN COMPLIANCE WITH THE LAW. IN
ANY ACTION  INSTITUTED IN THE COURTS UPON A  COMPENSATION  CLAIM  BY  AN
INDEPENDENT  CONTRACTOR  OR  THE  COMMISSIONER  IN WHICH THE INDEPENDENT
CONTRACTOR PREVAILS, THE COURT SHALL ALLOW SUCH  INDEPENDENT  CONTRACTOR
REASONABLE  ATTORNEY'S  FEES  AND, UNLESS THE CLIENT PROVES A GOOD FAITH
BASIS TO BELIEVE THAT ITS UNDERPAYMENT OF COMPENSATION WAS IN COMPLIANCE
WITH THE LAW, AN ADDITIONAL AMOUNT AS LIQUIDATED DAMAGES EQUAL TO  TWEN-
TY-FIVE PERCENT OF THE TOTAL AMOUNT OF COMPENSATION FOUND TO BE DUE. THE
REMEDIES  PROVIDED  BY  THIS  ARTICLE  MAY BE ENFORCED SIMULTANEOUSLY OR
CONSECUTIVELY SO FAR AS NOT INCONSISTENT WITH EACH OTHER.
  6. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, AN  ACTION  TO  RECOVER
UPON  A  LIABILITY  IMPOSED BY THIS ARTICLE MUST BE COMMENCED WITHIN SIX
YEARS.  ALL INDEPENDENT CONTRACTORS SHALL HAVE THE RIGHT TO RECOVER FULL
COMPENSATION ACCRUED DURING THE SIX YEARS PREVIOUS TO THE COMMENCING  OF
SUCH  ACTION,  WHETHER  SUCH  ACTION  IS  INSTITUTED  BY THE INDEPENDENT
CONTRACTOR OR BY THE COMMISSIONER.
  7. EACH INDEPENDENT CONTRACTOR  WHO  FILES  A  COMPLIANT  REGARDING  A
VIOLATION  OF A PROVISION OF THIS ARTICLE SHALL BE PROVIDED WITH A WRIT-
TEN DESCRIPTION OF THE ANTICIPATED PROCESSING OF THE COMPLAINT,  INCLUD-
ING  INVESTIGATION, CASE CONFERENCE, POTENTIAL CIVIL AND CRIMINAL PENAL-
TIES, AND COLLECTION PROCEDURES.
  8. EACH INDEPENDENT CONTRACTOR AND HIS OR HER REPRESENTATIVE SHALL  BE
NOTIFIED  IN  WRITING OF ANY CASE CONFERENCE BEFORE IT IS HELD AND GIVEN
THE OPPORTUNITY TO ATTEND.
  9. EACH INDEPENDENT CONTRACTOR AND HIS OR HER REPRESENTATIVE SHALL  BE
NOTIFIED IN WRITING OF ANY AWARD AND COLLECTION OF BACK COMPENSATION AND
CIVIL  PENALTIES,  AND  OF ANY INTENT TO SEEK CRIMINAL PENALTIES. IN THE
EVENT THAT CRIMINAL PENALTIES ARE SOUGHT THE INDEPENDENT CONTRACTOR  AND
HIS  OR  HER  REPRESENTATIVE  SHALL BE NOTIFIED OF THE OUTCOME OF PROSE-
CUTION.
  10. IF THE COMMISSIONER  DETERMINES  THAT  A  CLIENT  HAS  VIOLATED  A
PROVISION  OF  THIS  ARTICLE, OR A RULE OR REGULATION PROMULGATED THERE-

S. 8084                             3

UNDER, BY FAILING TO PAY THE COMPENSATION OF THEIR INDEPENDENT  CONTRAC-
TORS,  THE  COMMISSIONER  SHALL  ISSUE  TO THE CLIENT AN ORDER DIRECTING
COMPLIANCE THEREWITH, WHICH SHALL DESCRIBE PARTICULARLY  THE  NATURE  OF
THE  ALLEGED VIOLATION, AND ORDER THE PAYMENT OF INTEREST AT THE RATE OF
INTEREST THEN IN EFFECTED AS PRESCRIBED BY THE SUPERINTENDENT  OF  BANKS
PURSUANT  TO  SECTION  FOURTEEN-A  OF THE BANKING LAW PER ANNUM FROM THE
DATE OF THE UNDERPAYMENT TO THE DATE OF  THE  PAYMENT.  IN  ADDITION  TO
DIRECTING PAYMENT OF COMPENSATION FOUND TO BE DUE, SUCH ORDER, IF ISSUED
TO  A  CLIENT  WHO  PREVIOUSLY  HAS  BEEN  FOUND  IN  VIOLATION OF THOSE
PROVISIONS, RULES OR REGULATIONS, OR TO  A  CLIENT  WHOSE  VIOLATION  IS
WILLFUL  OR  EGREGIOUS,  SHALL  DIRECT PAYMENT TO THE COMMISSIONER OF AN
ADDITIONAL SUM AS A CIVIL PENALTY IN AN AMOUNT EQUAL TO DOUBLE THE TOTAL
AMOUNT FOUND TO BE DUE.
  11. EVERY CLIENT WHO DOES NOT PAY THE COMPENSATION OF ALL OF ITS INDE-
PENDENT CONTRACTORS IN ACCORDANCE WITH THE PROVISIONS OF  THIS  CHAPTER,
AND  THE  OFFICERS  AND  AGENTS  OF  ANY CLIENT WHO KNOWINGLY PERMIT THE
CLIENT TO VIOLATE THIS CHAPTER BY FAILING TO PAY THE COMPENSATION OF ANY
OF ITS INDEPENDENT CONTRACTORS IN ACCORDANCE WITH THE PROVISIONS  THERE-
OF,  SHALL  BE  GUILTY  OF  A MISDEMEANOR FOR THE FIRST OFFENSE AND UPON
CONVICTION THEREFOR SHALL BE FINED NOT LESS THAN FIVE HUNDRED  NOR  MORE
THAN  TWENTY  THOUSAND DOLLARS OR IMPRISONED FOR NOT MORE THAN ONE YEAR,
AND, IN THE EVENT THAT ANY SECOND OR SUBSEQUENT  OFFENSE  OCCURS  WITHIN
SIX YEARS OF THE DATE OF CONVICTION FOR A PRIOR OFFENSE, SHALL BE GUILTY
OF  A  FELONY  FOR THE SECOND OR SUBSEQUENT OFFENSE, AND UPON CONVICTION
THEREFOR, SHALL BE FINED NOT LESS THAN FIVE HUNDRED NOR MORE THAN TWENTY
THOUSAND DOLLARS OR IMPRISONED FOR NOT MORE THAN ONE YEAR PLUS ONE  DAY,
OR PUNISHED BY BOTH SUCH FINE AND IMPRISONMENT, FOR EACH SUCH OFFENSE.
  S 2. This act shall take effect immediately.