NY State Senate Bill 2013-S6912

Senate Bill S6912

2013-2014 Legislative Session

Relates to the liability of members of limited liability companies for wages due to laborers, servants or employees

download bill text pdf

Archive: Last Bill Status - In Senate Committee Corporations, Authorities And Commissions 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

Please enter your contact information

First Name

Last Name

Email Address

A valid email address is required.

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 28, 2014	referred to corporations, authorities and commissions

2013-S6912 (ACTIVE) - Details

See Assembly Version of this Bill:: A9449
Current Committee:: Senate Corporations, Authorities And Commissions
Law Section:: Limited Liability Company Law
Laws Affected:: Add §612, Lim Lil L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S3219, A1898
2017-2018: A3757

2013-S6912 (ACTIVE) - Summary

Relates to the liability of members of limited liability companies for wages due to laborers, servants or employees.

2013-S6912 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S6912

TITLE OF BILL:  An act to amend the limited liability company law, in
relation to the liability of members for wages due to laborers,
servants or employees

PURPOSE: To impose limited liability upon the top ten members of a
Limited Liability Company for wages due employees; comparable to the
liability imposed by Business Corporation Law Section 630 (Liability
of shareholders for wages due to laborers, servants or employees) for
personal services rendered by employees, upon the top ten members of a
Limited Liability Company.

SUMMARY OF PROVISIONS: Section one creates a new sub-section (c) under
the existing section 609 of the Limited Liability Company Law
(Liability of members, managers and agents), imposing liability upon
the top ten members of a Limited Liability Company for personal
services rendered by its employees, upon the return of an execution
unsatisfied against the Limited Liability Company upon a judgment
recovered against it for such services.

Section two is the effective date.

JUSTIFICATION: Currently, in recognition of the fact that employee
wages are significantly different from other debt obligations of a
business, New York's Business Corporation Law Section 630 imposes

liability upon a corporation's top ten shareholders for unpaid wages
and personal services rendered by its employees.

In order to reinforce the public policy that earned wages and employee
compensations should take a priority position against other company
debts regardless of the technical form of the employer entity, this
bill mirrors the liability imposed by BCL section 630, in the Limited
Liability Company Law, as it serves no legitimate public purpose to
continue shielding the owners of such a business entity against wages
earned by its employees. All other limited liability protections
remain unaffected.

Any action to enforce such liability against a member must be based
upon a judgment first obtained against the employer company which
failed to pay wages, the execution of which has been unsuccessful,
which would normally leave the unpaid worker without recourse. This
bill would provide the successful plaintiff the ability to proceed
against the company's top ten owners in the event that the company has
been made insolvent or otherwise dissipated its assets.

LEGISLATIVE HISTORY: This is a new bill.

FISCAL IMPLICATIONS: None to the state.

EFFECTIVE DATE: This act shall take effect immediately.

2013-S6912 (ACTIVE) - Bill Text download pdf

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

                                  6912

                            I N  S E N A T E

                             March 28, 2014
                               ___________

Introduced  by  Sen. MARTINS -- read twice and ordered printed, and when
  printed to be committed to the Committee on Corporations,  Authorities
  and Commissions

AN  ACT  to  amend the limited liability company law, in relation to the
  liability of members for wages due to laborers, servants or employees

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

  Section  1.  The  limited liability company law is amended by adding a
new section 612 to read as follows:
  S 612. LIABILITY OF MEMBERS FOR WAGES DUE  TO  LABORERS,  SERVANTS  OR
EMPLOYEES.  (A)  NOTWITHSTANDING  THE  PROVISIONS OF SECTION SIX HUNDRED
NINE OF THIS ARTICLE, THE TEN LARGEST MEMBERS  OF  A  LIMITED  LIABILITY
COMPANY, 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  SECTION  ARE  PERFORMED,  SHALL  JOINTLY  AND SEVERALLY BE
PERSONALLY LIABLE FOR ALL DEBTS, WAGES OR SALARIES DUE AND OWING TO  ANY
OF  ITS  LABORERS,  SERVANTS  OR  EMPLOYEES  OTHER THAN CONTRACTORS, FOR
SERVICES PERFORMED BY THEM FOR SUCH LIMITED  LIABILITY  COMPANY.  BEFORE
SUCH  LABORER,  SERVANT  OR  EMPLOYEE  SHALL CHARGE SUCH MEMBER FOR SUCH
SERVICES, HE OR SHE SHALL GIVE NOTICE IN WRITING TO SUCH MEMBER THAT  HE
OR SHE INTENDS TO HOLD HIM OR HER LIABLE UNDER THIS SECTION. SUCH NOTICE
SHALL  BE GIVEN WITHIN ONE HUNDRED EIGHTY DAYS AFTER TERMINATION OF SUCH
SERVICES, EXCEPT THAT IF, WITHIN SUCH PERIOD, THE  LABORER,  SERVANT  OR
EMPLOYEE  DEMANDS AN EXAMINATION OF THE RECORDS UNDER SUBDIVISION (B) OF
SECTION ONE THOUSAND ONE HUNDRED TWO OF THIS CHAPTER, SUCH NOTICE MAY BE
GIVEN WITHIN SIXTY DAYS AFTER HE OR SHE HAS BEEN GIVEN  THE  OPPORTUNITY
TO  EXAMINE  THE  RECORDS.  AN ACTION TO ENFORCE SUCH LIABILITY SHALL BE
COMMENCED WITHIN NINETY DAYS AFTER THE RETURN OF AN  EXECUTION  UNSATIS-
FIED  AGAINST  THE  LIMITED  LIABILITY COMPANY UPON A JUDGMENT RECOVERED
AGAINST IT FOR SUCH SERVICES.
  (B) FOR THE PURPOSES OF THIS SECTION, WAGES OR SALARIES SHALL MEAN ALL
COMPENSATION AND BENEFITS PAYABLE BY AN EMPLOYER TO OR FOR  THE  ACCOUNT
OF  THE  EMPLOYEE FOR PERSONAL SERVICES RENDERED BY SUCH EMPLOYEE. THESE
SHALL SPECIFICALLY INCLUDE BUT NOT LIMITED TO SALARIES, OVERTIME,  VACA-

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

                                                           LBD14577-01-4

S. 6912                             2

TION,  HOLIDAY  AND SEVERANCE PAY; EMPLOYER CONTRIBUTIONS TO OR PAYMENTS
OF INSURANCE OR WELFARE BENEFITS; EMPLOYER CONTRIBUTIONS TO  PENSION  OR
ANNUITY FUNDS; AND ANY OTHER MONEYS PROPERLY DUE OR PAYABLE FOR SERVICES
RENDERED BY SUCH EMPLOYEE.
  (C)  A  MEMBER  WHO HAS PAID MORE THAN HIS OR HER PRO RATA SHARE UNDER
THIS SECTION SHALL BE ENTITLED TO CONTRIBUTION PRO RATA FROM  THE  OTHER
MEMBERS  LIABLE  UNDER  THIS SECTION WITH RESPECT TO THE EXCESS SO PAID,
OVER AND ABOVE HIS OR HER PRO RATA SHARE, AND MAY SUE  THEM  JOINTLY  OR
SEVERALLY  OR  ANY  NUMBER  OF THEM TO RECOVER THE AMOUNT DUE FROM THEM.
SUCH RECOVERY MAY BE HAD IN A SEPARATE ACTION. AS USED IN THIS  SUBDIVI-
SION,  "PRO  RATA"  MEANS  IN  PROPORTION  TO BENEFICIAL SHARE INTEREST.
BEFORE A MEMBER MAY CLAIM CONTRIBUTION FROM  OTHER  MEMBERS  UNDER  THIS
SUBDIVISION,  SUCH  MEMBER SHALL, UNLESS HE OR SHE HAS BEEN GIVEN NOTICE
BY A LABORER, SERVANT OR EMPLOYEE UNDER SUBDIVISION (A) OF THIS SECTION,
GIVE THEM NOTICE IN WRITING THAT HE OR  SHE  INTENDS  TO  HOLD  THEM  SO
LIABLE  TO  HIM  OR HER. SUCH NOTICE SHALL BE GIVEN BY HIM OR HER WITHIN
TWENTY DAYS AFTER THE DATE THAT NOTICE WAS GIVEN TO  HIM  OR  HER  BY  A
LABORER, SERVANT OR EMPLOYEE UNDER SUBDIVISION (A) OF THIS SECTION.
  S 2. This act shall take effect immediately.

Comments

Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.

Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.