NY State Senate Bill 2019-S6727A

Senate Bill S6727A

2019-2020 Legislative Session

Relates to the liability of payroll processing companies

download bill text pdf

Archive: Last Bill Status - In Assembly Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 28, 2020	referred to judiciary delivered to assembly passed senate
Jan 22, 2020	amended on third reading 6727b
Jan 21, 2020	advanced to third reading
Jan 15, 2020	2nd report cal.
Jan 14, 2020	1st report cal.150
Jan 08, 2020	print number 6727a
Jan 08, 2020	amend and recommit to judiciary referred to judiciary
Sep 18, 2019	referred to rules

Votes

- Jan 28, 2020 - Floor Vote
  S6727A
  
  61
  
  Aye
  
  1
  
  Nay
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Jan 28, 2020
      
      aye (61)
      
      Addabbo Jr.
      
      Amedore
      
      Bailey
      
      Benjamin
      
      Biaggi
      
      Borrello
      
      Boyle
      
      Breslin
      
      Brooks
      
      Carlucci
      
      Comrie
      
      Felder
      
      Flanagan
      
      Funke
      
      Gallivan
      
      Gaughran
      
      Gianaris
      
      Gounardes
      
      Griffo
      
      Harckham
      
      Helming
      
      Hoylman-Sigal
      
      Jackson
      
      Jacobs
      
      Jordan
      
      Kaminsky
      
      Kaplan
      
      Kavanagh
      
      Kennedy
      
      Krueger
      
      LaValle
      
      Lanza
      
      Little
      
      Liu
      
      Martinez
      
      May
      
      Mayer
      
      Metzger
      
      Montgomery
      
      Myrie
      
      O'Mara
      
      Ortt
      
      Parker
      
      Persaud
      
      Ramos
      
      Ranzenhofer
      
      Ritchie
      
      Rivera
      
      Robach
      
      Salazar
      
      Sanders Jr.
      
      Savino
      
      Sepúlveda
      
      Serino
      
      Serrano
      
      Seward
      
      Skoufis
      
      Stavisky
      
      Stewart-Cousins
      
      Tedisco
      
      Thomas
      
      nay (1)
      
      Akshar
  Jan 14, 2020 - Judiciary Committee Vote
  S6727A
  
  12
  
  Aye
  
  0
  
  Nay
  
  3
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Judiciary Committee Vote: Jan 14, 2020
      
      aye (12)
      
      Bailey
      
      Boyle
      
      Breslin
      
      Gounardes
      
      Hoylman-Sigal
      
      Kaplan
      
      Lanza
      
      Myrie
      
      Savino
      
      Sepúlveda
      
      Stavisky
      
      Thomas
      
      aye wr (3)
      
      LaValle
      
      O'Mara
      
      Ranzenhofer

Bill Amendments

Original

B (Active)

2019-S6727 - Details

Current Committee:: Assembly Judiciary
Law Section:: General Obligations Law
Laws Affected:: Add §11-108, Gen Ob L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S761
2023-2024: S533

2019-S6727 - Summary

Relates to the liability of payroll processing companies; provides that payroll processing companies that intentionally and wrongfully prevent the distribution of payroll shall be liable to employees that failed to receive an expected payment for an amount up to three times the expected amount; and provides an action to recover damages may be maintained as a class action.

2019-S6727 - Sponsor Memo

                                
 
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.

2019-S6727 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6727
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                            September 18, 2019
                                ___________
 
 Introduced  by  Sen.  THOMAS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the general obligations law, in relation to the  liabil-
   ity of payroll processing companies
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The general obligations law is  amended  by  adding  a  new
 section 11-108 to read as follows:
   § 11-108. LIABILITY  OF  PAYROLL PROCESSING COMPANY.   NOTWITHSTANDING
 ANY OTHER PROVISION OF LAW TO THE CONTRARY, ANY PERSON UNDER CONTRACT TO
 AN EMPLOYER TO DISTRIBUTE  THE  EMPLOYER'S  PAYROLL  THAT  INTENTIONALLY
 PREVENTS  THE DISTRIBUTION OF SUCH PAYROLL PURSUANT TO THE CONTRACT WITH
 THE EMPLOYER SHALL BE LIABLE TO AN EMPLOYEE OF THE EMPLOYER THAT  FAILED
 TO  RECEIVE  AN  EXPECTED  PAYMENT  FOR  AN AMOUNT UP TO THREE TIMES THE
 EXPECTED PAYMENT.  LIABILITY UNDER THIS SECTION IS IN  ADDITION  TO  ANY
 OTHER  APPLICABLE  PENALTIES  AND CAUSES OF ACTION. AN ACTION TO RECOVER
 DAMAGES UNDER THIS SECTION MAY BE MAINTAINED AS A CLASS ACTION, NOTWITH-
 STANDING SUBDIVISION B OF SECTION NINE HUNDRED ONE OF THE CIVIL PRACTICE
 LAW AND RULES.
   § 2. This act shall take effect immediately.
 
 
 
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD13797-01-9

2019-S6727A - Details

Current Committee:: Assembly Judiciary
Law Section:: General Obligations Law
Laws Affected:: Add §11-108, Gen Ob L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S761
2023-2024: S533

2019-S6727A - Summary

2019-S6727A - Sponsor Memo

                                
 
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.

2019-S6727A - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6727--A
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                            September 18, 2019
                                ___________
 
 Introduced  by  Sen.  THOMAS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules  --  recommitted  to
   the Committee on Judiciary in accordance with Senate Rule 6, sec. 8 --
   committee  discharged,  bill amended, ordered reprinted as amended and
   recommitted to said committee

 AN ACT to amend the general obligations law, in relation to the  liabil-
   ity of payroll processing companies
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The general obligations law is  amended  by  adding  a  new
 section 11-108 to read as follows:
   § 11-108. LIABILITY  OF  PAYROLL PROCESSING COMPANY.   NOTWITHSTANDING
 ANY OTHER PROVISION OF LAW TO THE CONTRARY, ANY PERSON UNDER CONTRACT TO
 AN EMPLOYER TO DISTRIBUTE THE EMPLOYER'S PAYROLL THAT INTENTIONALLY  AND
 WRONGFULLY  PREVENTS  THE  DISTRIBUTION  OF SUCH PAYROLL PURSUANT TO THE
 CONTRACT WITH THE EMPLOYER SHALL BE LIABLE TO AN EMPLOYEE OF THE EMPLOY-
 ER THAT FAILED TO RECEIVE AN EXPECTED PAYMENT FOR AN AMOUNT UP TO  THREE
 TIMES THE EXPECTED PAYMENT.  LIABILITY UNDER THIS SECTION IS IN ADDITION
 TO  ANY  OTHER  APPLICABLE  PENALTIES AND CAUSES OF ACTION. AN ACTION TO
 RECOVER DAMAGES UNDER THIS SECTION MAY BE MAINTAINED AS A CLASS  ACTION,
 NOTWITHSTANDING  SUBDIVISION  B OF SECTION NINE HUNDRED ONE OF THE CIVIL
 PRACTICE LAW AND RULES.
   § 2. This act shall take effect immediately.
 
 
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD13797-02-0

2019-S6727B (ACTIVE) - Details

Current Committee:: Assembly Judiciary
Law Section:: General Obligations Law
Laws Affected:: Add §11-108, Gen Ob L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S761
2023-2024: S533

2019-S6727B (ACTIVE) - Summary

2019-S6727B (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S6727B

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, subsection 1 of the bill adds a new section 11-108 to the
general obligations law defining payroll processing company as a person
or business entity that contracts with an employer to 1) calculate,
process, and produce wage payments under the employer's federal employer
identification number, 2) remit taxes to the government under the

employer's federal employer identification number, 3) issue income tax
forms under the employer's federal employer identification number and 4)
conditions wage payment on the employer's advance deposit of funds to
the payroll processor.

Section 1, subsection 2 of the bill provides a payroll processing compa-
ny that intentionally and without good cause prevents the remittance of
taxes or payment of wages shall be liable to employees for up to three
times the amount of any expected payments missed. A payroll processing
company has one business day grace period to cure any remittance delay.
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 regu-
lar 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 legis-
lation 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.

2019-S6727B (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6727--B
     Cal. No. 150
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                            September 18, 2019
                                ___________
 
 Introduced  by  Sen.  THOMAS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules  --  recommitted  to
   the Committee on Judiciary in accordance with Senate Rule 6, sec. 8 --
   committee  discharged,  bill amended, ordered reprinted as amended and
   recommitted to said committee -- reported favorably from said  commit-
   tee,  ordered  to first and second report, ordered to a third reading,
   amended and ordered reprinted, retaining its place  in  the  order  of
   third reading
 
 AN  ACT to amend the general obligations law, in relation to the liabil-
   ity of payroll processing companies
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The  general  obligations  law is amended by adding a new
 section 11-108 to read as follows:
   § 11-108. LIABILITY  OF  PAYROLL  PROCESSING  COMPANY.    1.  FOR  THE
 PURPOSES OF THIS SECTION, "PAYROLL PROCESSING COMPANY" MEANS A PERSON OR
 BUSINESS  ENTITY  UNDER  CONTRACT  TO  AN EMPLOYER THAT: (A) CALCULATES,
 PROCESSES AND PRODUCES WAGE PAYMENTS TO THE EMPLOYER'S  EMPLOYEES  UNDER
 SUCH  EMPLOYER'S  FEDERAL  EMPLOYER IDENTIFICATION NUMBER; (B) WITHHOLDS
 AND REMITS APPLICABLE TAXES TO GOVERNMENT AGENCIES USING THE  EMPLOYER'S
 FEDERAL  EMPLOYMENT  IDENTIFICATION NUMBER; (C) ISSUES FEDERAL AND STATE
 INCOME TAX FORMS TO  THE  EMPLOYER'S  EMPLOYEES  USING  SUCH  EMPLOYER'S
 FEDERAL EMPLOYER IDENTIFICATION NUMBER; AND (D) CONDITIONS WAGE PAYMENTS
 TO  THE  EMPLOYER'S  EMPLOYEES ON THE ADVANCE RECEIPT OF FUNDS FROM SUCH
 EMPLOYER TO FULLY COVER SUCH  WAGE  PAYMENTS.  A  PERSON  ACTING  AS  AN
 EMPLOYER  UNDER 26 U.S.C. 3401(D)(1) THAT OTHERWISE MEETS THE DEFINITION
 OF A PAYROLL PROCESSING COMPANY SHALL NOT BE CONSIDERED A PAYROLL  PROC-
 ESSING  COMPANY IF THE PERSON ACTING AS AN EMPLOYER AND THE EMPLOYEE ARE
 SUBJECT  TO  A  COLLECTIVE  BARGAINING  AGREEMENT  AND  SUCH  COLLECTIVE
 BARGAINING AGREEMENT EXPRESSLY PROVIDES FOR THE RECOVERY OF UNPAID, LOST
 OR STOLEN WAGES.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD13797-10-0

 S. 6727--B                          2
 
   2.  NOTWITHSTANDING  ANY  OTHER  PROVISION  OF  LAW TO THE CONTRARY, A
 PAYROLL PROCESSING COMPANY THAT INTENTIONALLY  AND  WITHOUT  GOOD  CAUSE
 PREVENTS  THE  REMITTANCE  OF  TAXES OR PAYMENT OF WAGES PURSUANT TO THE
 CONTRACT WITH THE EMPLOYER SHALL BE LIABLE TO AN EMPLOYEE OF THE EMPLOY-
 ER THAT FAILED TO RECEIVE AN OWED PAYMENT WITHIN ONE BUSINESS DAY OF THE
 DATE  SUCH PAYMENT WAS EXPECTED FOR AN AMOUNT UP TO THREE TIMES THE OWED
 PAYMENT OF WAGES AND APPLICABLE TAXES. GOOD CAUSE MAY INCLUDE, BUT SHALL
 NOT BE LIMITED TO, THE FAILURE OF  AN  EMPLOYER  TO  PROVIDE  SUFFICIENT
 FUNDS  BY  THE  APPLICABLE DEADLINE, REASONABLE EFFORTS TO VERIFY POTEN-
 TIALLY FRAUDULENT ACTIVITY, FAILURE OF AN EMPLOYER TO PROVIDE THE NECES-
 SARY PAYROLL INPUT, OBSERVANCE OF RELEVANT STATE  AND  FEDERAL  LAWS  OR
 REGULATIONS,  AND OTHER FACTORS OUTSIDE THE CONTROL OF THE PAYROLL PROC-
 ESSING COMPANY; PROVIDED A PAYROLL PROCESSING  COMPANY  SHALL  NOT  HAVE
 GOOD CAUSE UNDER THIS SECTION IF SUCH PAYROLL PROCESSING COMPANY ACTS OR
 FAILS TO ACT IN VIOLATION OF APPLICABLE STATE AND FEDERAL LAWS AND REGU-
 LATIONS.
   3. LIABILITY UNDER THIS SECTION IS IN ADDITION TO ANY OTHER APPLICABLE
 PENALTIES AND CAUSES OF ACTION.
   4.  AN  ACTION TO RECOVER DAMAGES UNDER THIS SECTION MAY BE MAINTAINED
 AS A CLASS ACTION, NOTWITHSTANDING SUBDIVISION B OF SECTION NINE HUNDRED
 ONE OF THE CIVIL PRACTICE LAW AND RULES.
   § 2. This act shall take effect immediately.

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