BILL NUMBER: S6727

SPONSOR: THOMAS
 
TITLE OF BILL:  An act to amend the general obligations law, in
relation to the liability of payroll processing companies

 
PURPOSE OR GENERAL IDEA OF BILL:

To provide compensation for workers who miss paychecks through no fault
of their own by imposing liability for up to three times the amount of
the paycheck on payroll processing companies who intentionally prevent
the distribution of the payroll.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill adds a new section 11-108 to the general obli-
gations law to provide that where a person is under contract to an
employer to distribute the employer's payroll and intentionally prevents
the distribution of that payroll, the person shall be liable to the
employees for up to three times the amount of any expected payments
missed. The employees would be able to maintain a class action under
              

this section.

Section 2 provides the effective date.

 
JUSTIFICATION:

When payroll processing company MyPayrollHR abruptly shut down in
September of 2019, it left employees of 4,000 businesses in New York
State and around the country without a paycheck. In many cases, the
closing resulted in the employee appearing to receive the paycheck in
their bank account, only to have the transaction reversed once it became
clear that MyPayrollHR would not deposit the funds. This led to some
employees carrying a negative balance in their account, leaving them
unable to pay for food, rent, or other necessary expenses.

Workers, especially those living paycheck to paycheck, rely on receiving
a regular paycheck for their work, and even one missed or delayed
payment can throw their lives into chaos. This bill seeks to hold
payroll processing companies accountable when they intentionally disrupt
workers lives by failing to distribute the payroll as required. By
imposing the threat of treble damages and class action lawsuits on these
companies, this legislation ensures they will take every step possible
to ensure that each worker receives their paycheck in full and on-time,
as expected.

 
PRIOR LEGISLATIVE HISTORY:

New Bill

 
FISCAL IMPLICATION:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

                                
 
BILL NUMBER: S6727A            Revised 1/8/2020

SPONSOR: THOMAS
 
TITLE OF BILL:

An act to amend the general obligations law, in relation to the liabil-
ity of payroll processing companies

 
PURPOSE OR GENERAL IDEA OF BILL:

To provide compensation for workers who miss paychecks through no fault
of their own by imposing liability for up to three times the amount of
the paycheck on payroll processing companies who intentionally prevent
the distribution of the payroll.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill adds a new section 11-108 to the general obli-
gations law to provide that where a person is under contract to an
employer to distribute the employer's payroll and intentionally and
wrongfully prevents the distribution of that payroll, the person shall
              

be liable to the employees for up to three times the amount of any
expected payments missed. The employees would be able to maintain a
class action under this section.

Section 2 provides the effective date.

 
JUSTIFICATION:

When payroll processing company MyPayrollHR abruptly shut down in
September of 2019, it left employees of 4,000 businesses in New York
State and around the country without a paycheck. In many cases, the
closing resulted in the employee appearing to receive the paycheck in
their bank account, only to have the transaction reversed once it became
clear that MyPayrollHR would not deposit the funds. This led to some
employees carrying a negative balance in their account, leaving them
unable to pay for food, rent, or other necessary expenses.

Workers, especially those living paycheck to paycheck, rely on receiving
a regular paycheck for their work, and even one missed or delayed
payment can throw their lives into chaos. This bill seeks to hold
payroll processing companies accountable when they intentionally disrupt
workers lives by failing to distribute the payroll as required. By
imposing the threat of treble damages and class action lawsuits on these
companies, this legislation ensures they will take every step possible
to ensure that each worker receives their paycheck in full and on-time,
as expected.

 
PRIOR LEGISLATIVE HISTORY:

New Bill

 
FISCAL IMPLICATION:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.