S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    533
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              January 4, 2023
                                ___________
 
 Introduced  by  Sen.  THOMAS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Judiciary
 
 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.
   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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01868-01-3
              

 S. 533                              2
 
 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.