S T A T E O F N E W Y O R K
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11649
I N A S S E M B L Y
July 6, 2010
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Introduced by COMMITTEE ON RULES -- (at request of M. of A. Ortiz) --
read once and referred to the Committee on Labor
AN ACT to amend the labor law, in relation to the payment of wages
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivisions 2 and 3 of section 190 of the labor law,
subdivision 2 as added by chapter 548 of the laws of 1966 and subdivi-
sion 3 as amended by chapter 281 of the laws of 2002, are amended and
two new subdivisions 10 and 11 are added to read as follows:
2. "Employee" means [any person employed for hire by an employer in
any employment] A NATURAL PERSON WHO IS EMPLOYED IN THIS STATE BY AN
EMPLOYER, INCLUDING AN INDIVIDUAL WHO IS IN RECEIPT OF OR IS ENTITLED TO
ANY COMPENSATION FOR LABOR PERFORMED FOR ANY EMPLOYER. EMPLOYEE ALSO
INCLUDES A COMMISSION SALESPERSON WHO TAKES ORDERS OR PERFORMS SERVICES
ON BEHALF OF A PRINCIPAL AND WHO IS PAID ON THE BASIS OF COMMISSIONS,
BUT DOES NOT INCLUDE PERSONS WHO PURCHASE FOR THEIR OWN ACCOUNT FOR
RESALE.
3. "Employer" [includes any person, corporation, limited liability
company, or association employing any individual in any occupation,
industry, trade, business or service] MEANS A PERSON, FIRM OR CORPO-
RATION, AGENT, MANAGER, REPRESENTATIVE, CONTRACTOR, SUBCONTRACTOR OR
PRINCIPAL, OR OTHER PERSON ACTING DIRECTLY OR INDIRECTLY IN THE INTEREST
OF AN EMPLOYER TO SUFFER OR PERMIT ANOTHER PERSON TO WORK; WHETHER A
PERSON IS AN INDEPENDENT CONTRACTOR OR AN EMPLOYEE SHALL BE DETERMINED
ACCORDING TO THE STANDARDS OF THE FEDERAL FAIR LABOR STANDARDS ACT, 29
U.S.C. 201 TO 219, BUT THE BURDEN OF PROOF SHALL BE UPON THE PARTY FOR
WHOM THE WORK IS PERFORMED TO SHOW INDEPENDENT CONTRACTOR STATUS BY
CLEAR AND CONVINCING EVIDENCE. The term "employer" shall not include a
governmental agency.
10. "INDEPENDENT CONTRACTOR" MEANS A PERSON WHO:
(A) PERFORMS SERVICES FREE FROM DIRECTION AND CONTROL OVER THE MEANS
AND MANNER OF PROVIDING THE SERVICES, SUBJECT ONLY TO THE RIGHT OF THE
PERSON OR ENTITY FOR WHOM SERVICES ARE PROVIDED TO SPECIFY THE DESIRED
RESULT;
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD17744-01-0
A. 11649 2
(B) FURNISHES THE TOOLS AND EQUIPMENT NECESSARY TO PROVIDE THE
SERVICE;
(C) OPERATES A BUSINESS THAT IS CONSIDERED INSEPARABLE FROM THE INDI-
VIDUAL FOR PURPOSES OF TAXES, PROFITS, AND LIABILITIES:
(I) IN WHICH THE INDIVIDUAL:
(A) OWNS ALL OF THE ASSETS AND PROFITS OF THE BUSINESS; AND
(B) HAS SOLE, UNLIMITED, PERSONAL LIABILITY FOR ALL OF THE DEBTS AND
LIABILITIES OF THE BUSINESS, UNLESS THE BUSINESS IS ORGANIZED AS A
SINGLE-OWNED CORPORATE ENTITY, TO WHICH SOLE, UNLIMITED PERSONAL LIABIL-
ITY DOES NOT APPLY; AND
(II) FOR WHICH:
(A) THE INDIVIDUAL DOES NOT PAY TAXES FOR THE BUSINESS SEPARATELY BUT
REPORTS BUSINESS INCOME AND LOSSES ON THE INDIVIDUAL'S PERSONAL TAX
RETURN; AND
(B) IF THE BUSINESS IS ORGANIZED AS A CORPORATE ENTITY AND THE INDI-
VIDUAL OTHERWISE QUALIFIES AS AN EXEMPT PERSON UNDER THIS ARTICLE, THE
INDIVIDUAL FILES A SEPARATE FEDERAL INFORMATIONAL TAX RETURN FOR THE
ENTITY AS REQUIRED BY LAW;
(D) EXERCISES COMPLETE CONTROL OVER THE MANAGEMENT AND OPERATIONS OF
THE BUSINESS; AND
(E) EXERCISES THE RIGHT AND OPPORTUNITY ON A CONTINUING BASIS TO
PERFORM THE SERVICES OF THE BUSINESS FOR MULTIPLE ENTITIES AT THE INDI-
VIDUAL'S SOLE CHOICE AND DISCRETION.
11. "LIQUIDATED DAMAGES" MEANS THE SUM OF FIVE PERCENT MULTIPLIED BY
THE AMOUNT OF ANY WAGES THAT WERE NOT PAID OR OF ANY AUTHORIZED EXPENSES
THAT WERE NOT REIMBURSED ON A REGULAR PAYDAY OR ON ANOTHER DAY, MULTI-
PLIED BY THE TOTAL NUMBER OF DAYS, EXCLUDING SUNDAYS, LEGAL HOLIDAYS,
AND THE FIRST SEVEN DAYS AFTER THE REGULAR PAYDAY ON WHICH WAGES WERE
NOT PAID OR EXPENSES WERE NOT REIMBURSED. HOWEVER, SUCH SUM SHALL NOT
EXCEED TWICE THE AMOUNT OF THE UNPAID WAGES AND SHALL NOT ACCUMULATE
WHEN AN EMPLOYER IS SUBJECT TO A PETITION FILED IN BANKRUPTCY.
S 2. Section 198-a of the labor law is amended by adding a new subdi-
vision 4 to read as follows:
4. ANY WEEK WHERE AN INDIVIDUAL EMPLOYEE WAS NOT PAID THE LEGALLY
REQUIRED WAGES UNDER THIS ARTICLE, STATE TAXES WERE NOT WITHHELD, OR IN
THE CASE OF RETALIATION AGAINST AN EMPLOYEE, EVERY WEEK AFTER RETALI-
ATION HAS OCCURRED UNTIL COMPENSATION IS FINALLY MADE, SHALL CONSTITUTE
A SEPARATE VIOLATION OF THE PROVISIONS OF THIS ARTICLE.
S 3. Section 195 of the labor law is amended by adding a new subdivi-
sion 7 to read as follows:
7. ON EACH REGULAR PAYDAY, SEND TO EACH EMPLOYEE BY MAIL OR PROVIDE AT
THE EMPLOYEE'S NORMAL PLACE OF EMPLOYMENT DURING NORMAL EMPLOYMENT HOURS
A STATEMENT SHOWING THE HOURS THE EMPLOYEE WORKED, THE WAGES EARNED BY
THE EMPLOYEE, AND DEDUCTIONS MADE FOR THE EMPLOYEE.
S 4. Subdivision 1-a of section 198 of the labor law, as amended by
chapter 372 of the laws of 2009, is amended to read as follows:
1-a. On behalf of any employee paid less than the wage to which he or
she is entitled 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 employer an additional amount as
liquidated damages [equal to twenty-five percent of the total amount of
wages found to be due] AS DEFINED IN SECTION ONE HUNDRED NINETY OF THIS
ARTICLE, unless the employer proves a good faith basis for believing
that its underpayment of wages was in compliance with the law. In any
A. 11649 3
action instituted in the courts upon a wage claim by an employee or the
commissioner in which the employee prevails, the court shall allow such
employee reasonable attorney's fees and, unless the employer proves a
good faith basis to believe that its underpayment of wages was in
compliance with the law, an additional amount as liquidated damages
[equal to twenty-five percent of the total amount of the wages found to
be due] AS DEFINED IN SECTION ONE HUNDRED NINETY OF THIS ARTICLE.
S 5. The labor law is amended by adding a new section 191-d to read as
follows:
S 191-D. PRIVATE RIGHT OF ACTION BY MISCLASSIFIED EMPLOYEES. 1.
NOTWITHSTANDING ANY REMEDY AVAILABLE UNDER THIS ARTICLE, AN INDIVIDUAL
WHO HAS NOT BEEN PROPERLY CLASSIFIED AS AN EMPLOYEE MAY BRING A CIVIL
ACTION FOR DAMAGES AGAINST THE EMPLOYER FOR ANY VIOLATION OF THIS ARTI-
CLE.
2. AN ACTION FILED UNDER THIS SECTION SHALL BE FILED WITHIN THREE
YEARS AFTER THE DATE THE CAUSE OF ACTION ACCRUES.
3. IF THE COURT DETERMINES THAT AN INDIVIDUAL OR CLASS OF INDIVIDUALS
IS ENTITLED TO JUDGMENT IN AN ACTION AGAINST AN EMPLOYER FILED IN
ACCORDANCE WITH THIS SECTION, THE COURT MAY AWARD EACH INDIVIDUAL:
(A) ANY DAMAGES TO WHICH THE INDIVIDUAL MAY BE ENTITLED UNDER THIS
ARTICLE;
(B) AN ADDITIONAL AMOUNT UP TO THREE TIMES THE AMOUNT OF ANY SUCH
DAMAGES, IF THE EMPLOYER KNOWINGLY FAILED TO PROPERLY CLASSIFY THE INDI-
VIDUAL;
(C) REASONABLE COUNSEL FEES AND OTHER COSTS OF THE ACTION; AND
(D) ANY OTHER APPROPRIATE RELIEF.
S 6. Subdivision 2 of section 196 of the labor law, as added by chap-
ter 548 of the laws of 1966, is amended to read as follows:
2. THE COMMISSIONER MAY HOLD HEARINGS AND INVESTIGATE CHARGES OF
VIOLATIONS OF THIS ARTICLE.
3. THE COMMISSIONER MAY, CONSISTENT WITH DUE PROCESS OF LAW, ENTER ANY
PLACE OF EMPLOYMENT TO INSPECT RECORDS CONCERNING WAGES AND PAYROLLS, TO
QUESTION THE EMPLOYER AND EMPLOYEES, AND TO INVESTIGATE SUCH FACTS,
CONDITIONS OR MATTERS AS ARE DEEMED APPROPRIATE IN DETERMINING WHETHER
ANY PERSON HAS VIOLATED THE PROVISIONS OF THIS ARTICLE. THE NAME OF ANY
EMPLOYEE IDENTIFIED IN A COMPLAINT TO THE DEPARTMENT SHALL BE KEPT
CONFIDENTIAL AS LONG AS POSSIBLE. WHERE THE DEPARTMENT DETERMINES THAT
AN EMPLOYEE'S NAME MUST BE DISCLOSED IN ORDER TO INVESTIGATE A COMPLAINT
FURTHER, IT MAY DO SO ONLY WITH THE EMPLOYEE'S CONSENT.
4. Nothing in this section shall be construed as requiring the commis-
sioner in every instance to investigate and attempt to adjust controver-
sies, or to take assignments of wage claims, or to institute criminal
prosecutions for any violation under this article, but he shall be
deemed vested with discretion in such matters.
S 7. The labor law is amended by adding a new section 196-b to read as
follows:
S 196-B. RETALIATION AGAINST EMPLOYEES PROHIBITED. NO PERSON OR
EMPLOYER SHALL DISCHARGE OR IN ANY OTHER MANNER DISCRIMINATE OR RETALI-
ATE AGAINST AN EMPLOYEE OR OTHER PERSON FOR EXERCISING ANY RIGHT UNDER
THIS ARTICLE OR ANY REGULATION IMPLEMENTING ITS PROVISIONS, OR AGAINST
ANY PERSON FOR PROVIDING ASSISTANCE TO ANY EMPLOYEE OR INFORMATION
REGARDING THE SAME, OR FOR TESTIFYING OR PLANNING TO TESTIFY IN ANY
INVESTIGATION OR PROCEEDING REGARDING THE SAME. TAKING ADVERSE ACTION
AGAINST A PERSON WITHIN NINETY DAYS OF A PERSON'S ENGAGING IN THE FORE-
GOING ACTIVITIES SHALL RAISE A PRESUMPTION THAT SUCH ACTION WAS RETALI-
ATION, WHICH MAY BE REBUTTED BY CLEAN AND CONVINCING EVIDENCE THAT SUCH
A. 11649 4
ACTION WAS TAKEN FOR OTHER PERMISSIBLE REASONS. ANY EMPLOYEE MAY FILE A
COMPLAINT WITH THE COMMISSIONER ALLEGING DISCHARGE OR DISCRIMINATION
WITHIN THIRTY DAYS AFTER SUCH VIOLATION OCCURS. UPON RECEIPT OF THE
COMPLAINT, THE COMMISSIONER SHALL CAUSE AN INVESTIGATION TO BE MADE TO
THE EXTENT DEEMED APPROPRIATE. IF THE COMMISSIONER DETERMINES FROM THE
INVESTIGATION THAT THE PROVISIONS OF THIS ARTICLE HAVE BEEN VIOLATED,
THE COMMISSIONER SHALL BRING AN ACTION IN A COURT OF COMPETENT JURISDIC-
TION AGAINST SUCH PERSON. SUCH COURT SHALL ORDER ALL APPROPRIATE RELIEF
INCLUDING REHIRING OR REINSTATEMENT OF THE EMPLOYEE TO THE FORMER POSI-
TION WITH BACK PAY. A CIVIL ACTION TO ENFORCE THIS ARTICLE MAY ALSO BE
MAINTAINED IN ANY COURT OF COMPETENT JURISDICTION BY THE STATE OR BY ANY
PARTY INURED BY A VIOLATION OF THIS ARTICLE. ANY EMPLOYER WHO RETALIATES
AGAINST AN EMPLOYEE OR OTHER PERSON IN VIOLATION OF THIS ARTICLE SHALL
BE REQUIRED TO PAY THE PERSON AN AMOUNT SET BY THE DEPARTMENT OR A COURT
SUFFICIENT TO COMPENSATE THE EMPLOYEE AND DETER FUTURE VIOLATIONS, BUT
NOT LESS THAN ONE HUNDRED DOLLARS FOR EACH DAY THAT THE VIOLATIONS
CONTINUED, OR UNTIL LEGAL JUDGMENT IS FINAL.
S 8. Subdivision 1 of section 198-a of the labor law, as amended by
chapter 241 of the laws of 2002, is amended to read as follows:
1. Every employer who does not pay the wages of all of his employees
in accordance with the provisions of this chapter, and the officers and
agents of any corporation [who knowingly permit the corporation to
violate] WHICH VIOLATES this chapter by failing to pay the wages of any
of its employees in accordance with the provisions thereof, shall be
guilty of a misdemeanor for the first offense and upon conviction there-
for shall be fined not less than five hundred nor more than twenty thou-
sand 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. ADDITIONALLY,
THE TEN LARGEST SHAREHOLDERS, AS DETERMINED BY THE FAIR VALUE OF THEIR
BENEFICIAL INTEREST AS OF THE BEGINNING OF THE PERIOD DURING WHICH THE
UNPAID SERVICES REFERRED TO IN THIS ARTICLE ARE PERFORMED, OF EVERY
CORPORATION (OTHER THAN AN INVESTMENT COMPANY REGISTERED AS SUCH UNDER
AN ACT OF CONGRESS ENTITLED "INVESTMENT COMPANY ACT OF 1940"), NO SHARES
OF WHICH ARE LISTED ON A NATIONAL SECURITIES EXCHANGE OR REGULARLY QUOT-
ED IN AN OVER-THE-COUNTER MARKET BY ONE OR MORE MEMBERS OF A NATIONAL OR
AN AFFILIATED SECURITIES ASSOCIATION, SHALL JOINTLY AND SEVERALLY BE
PERSONALLY LIABLE FOR ALL DEBTS, WAGES OR SALARIES DUE AND OWING TO ANY
OF ITS EMPLOYEES FOR SERVICES PERFORMED BY THEM FOR SUCH CORPORATION. A
CIVIL ACTION MAY BE BROUGHT AGAINST A SHAREHOLDER LIABLE FOR WAGES DUE
UNDER THIS CHAPTER INSTEAD OF AND IN ADDITION TO THE EMPLOYER. An
indictment of a person or corporation operating a steam surface railroad
for an offense specified in this section may be found and tried in any
county within the state in which such railroad ran at the time of such
offense.
S 9. The labor law is amended by adding a new section 191-e to read as
follows:
S 191-E. PRIVATE ATTORNEYS GENERAL PROVISION FOR ENFORCEMENT. 1. (A)
NOTWITHSTANDING ANY OTHER PROVISION OF LAW, ANY PROVISION OF THIS ARTI-
CLE THAT PROVIDES FOR A CIVIL PENALTY TO BE ASSESSED AND COLLECTED BY
THE COMMISSIONER MAY, AS AN ALTERNATIVE, BE RECOVERED THROUGH A CIVIL
A. 11649 5
ACTION BROUGHT BY AN AGGRIEVED EMPLOYEE ON BEHALF OF HIMSELF OR HERSELF
AND OTHER CURRENT OR FORMER EMPLOYEES.
(B) NO ACTION MAY BE BROUGHT UNDER THIS SECTION BY AN AGGRIEVED
EMPLOYEE IF THE COMMISSIONER ON THE SAME FACTS AND THEORIES, CITES A
PERSON WITHIN THE TIMEFRAMES SET FORTH IN THIS ARTICLE FOR A VIOLATION
OF THE SAME SECTION OR SECTIONS OF LAW UNDER WHICH THE AGGRIEVED EMPLOY-
EE IS ATTEMPTING TO RECOVER A CIVIL PENALTY ON BEHALF OF HIMSELF OR
HERSELF OR OTHERS.
(C) CIVIL PENALTIES RECOVERED BY AGGRIEVED EMPLOYEES SHALL BE DISTRIB-
UTED AS FOLLOWS: SEVENTY-FIVE PERCENT TO THE COMMISSION FOR ENFORCEMENT
OF LABOR LAWS AND EDUCATION OF EMPLOYERS AND EMPLOYEES ABOUT THEIR
RIGHTS AND RESPONSIBILITIES UNDER THIS ARTICLE, TO BE CONTINUOUSLY
APPROPRIATED TO SUPPLEMENT AND NOT SUPPLANT THE FUNDING TO THE AGENCY
FOR THOSE PURPOSES; AND TWENTY-FIVE PERCENT TO THE AGGRIEVED EMPLOYEES.
(D) COURTS SHALL REVIEW AND APPROVE ANY PENALTIES SOUGHT AS PART OF A
PROPOSED SETTLEMENT AGREEMENT PURSUANT TO THIS SECTION.
2. (A) A CIVIL ACTION BY AN AGGRIEVED EMPLOYEE SEEKING CIVIL PENALTIES
PURSUANT TO THIS SECTION ALLEGING A VIOLATION OF ANY PROVISION SHALL
COMMENCE ONLY AFTER THE FOLLOWING REQUIREMENTS HAVE BEEN MET:
(I) THE AGGRIEVED EMPLOYEE OR REPRESENTATIVE SHALL GIVE WRITTEN NOTICE
BY CERTIFIED MAIL TO THE DEPARTMENT AND THE EMPLOYER OF THE SPECIFIC
PROVISIONS OF THIS ARTICLE ALLEGED TO HAVE BEEN VIOLATED, INCLUDING THE
FACTS AND THEORIES TO SUPPORT THE ALLEGED VIOLATION.
(II) (A) THE DEPARTMENT SHALL NOTIFY THE EMPLOYER AND THE AGGRIEVED
EMPLOYEE OR REPRESENTATIVE BY CERTIFIED MAIL THAT IT DOES NOT INTEND TO
INVESTIGATE THE ALLEGED VIOLATION WITHIN THIRTY CALENDAR DAYS OF THE
POSTMARK DATE OF THE NOTICE RECEIVED PURSUANT TO SUBPARAGRAPH (I) OF
THIS PARAGRAPH. UPON RECEIPT OF THAT NOTICE OR IF NO NOTICE IS PROVIDED
WITHIN THIRTY-THREE CALENDAR DAYS OF THE POSTMARK DATE OF THE NOTICE
GIVEN PURSUANT TO SUCH SUBPARAGRAPH (I), THE AGGRIEVED EMPLOYEE MAY
COMMENCE A CIVIL ACTION.
(B) IF THE DEPARTMENT INTENDS TO INVESTIGATE THE ALLEGED VIOLATION, IT
SHALL NOTIFY THE EMPLOYER AND THE AGGRIEVED EMPLOYEE OR REPRESENTATIVE
BY CERTIFIED MAIL OF ITS DECISION WITHIN THIRTY-THREE CALENDAR DAYS OF
THE POSTMARK DATE OF THE NOTICE RECEIVED PURSUANT TO SUBPARAGRAPH (I) OF
THIS PARAGRAPH. WITHIN ONE HUNDRED TWENTY CALENDAR DAYS OF THAT DECI-
SION, THE AGENCY MAY INVESTIGATE THE ALLEGED VIOLATION AND ISSUE ANY
APPROPRIATE CITATION. IF THE AGENCY DETERMINES THAT NO CITATION WILL BE
ISSUED, IT SHALL NOTIFY THE EMPLOYER AND AGGRIEVED EMPLOYEE OF THAT
DECISION WITHIN FIVE BUSINESS DAYS THEREOF BY CERTIFIED MAIL. UPON
RECEIPT OF THAT NOTICE OR IF NO CITATION IS ISSUED BY THE AGENCY WITHIN
THE ONE HUNDRED FIFTY-EIGHT-DAY PERIOD PRESCRIBED BY THIS PARAGRAPH OR
IF THE AGENCY FAILS TO PROVIDE TIMELY OR ANY NOTIFICATION, THE AGGRIEVED
EMPLOYEE MAY COMMENCE A CIVIL ACTION.
(C) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, A PLAINTIFF MAY AS A
MATTER OF RIGHT AMEND AN EXISTING COMPLAINT TO ADD A CAUSE OF ACTION
ARISING UNDER THIS SECTION AT ANY TIME WITHIN SIXTY DAYS OF THE TIME
PERIODS SPECIFIED IN THIS SECTION.
S 10. This act shall take effect immediately.