Bill Text: NY A00486 | 2019-2020 | General Assembly | Introduced


Bill Title: Relates to securing payment of wages for work already performed; creates a lien remedy for all employees; provides grounds for attachment; relates to procedures where employees may hold shareholders of non-publicly traded corporations personally liable for wage theft; relates to rights for victims of wage theft to hold the ten members with the largest ownership interests in a company personally liable for wage theft.

Spectrum: Partisan Bill (Democrat 38-1)

Status: (Introduced) 2019-03-19 - reported referred to codes [A00486 Detail]

Download: New_York-2019-A00486-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                           486
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                       (Prefiled)
                                     January 9, 2019
                                       ___________
        Introduced  by  M.  of A. L. ROSENTHAL, MOSLEY, GOTTFRIED, OTIS, WEPRIN,
          ORTIZ, PERRY, DAVILA, DINOWITZ, SIMON, M. G. MILLER,  LIFTON,  BARRON,
          SEAWRIGHT,  RICHARDSON,  BENEDETTO,  STECK,  BRONSON,  CRESPO, HUNTER,
          ROZIC, COLTON, TAYLOR, PICHARDO -- Multi-Sponsored  by  --  M.  of  A.
          COOK,  DE LA ROSA,  HEVESI,  KIM,  LENTOL,  RIVERA  --  read  once and
          referred to the Committee on Judiciary
        AN ACT to amend the lien law, in relation to employee  liens;  to  amend
          the  labor law, in relation to employee complaints; to amend the civil
          practice law and rules, in relation  to  grounds  for  attachment;  to
          amend the business corporation law, in relation to streamlining proce-
          dures  where  employees  may  hold shareholders of non-publicly traded
          corporations personally liable for wage theft; and to amend the limit-
          ed liability company law, in relation to creating a right for  victims
          of  wage  theft  to  hold  the  ten members with the largest ownership
          interests in a company personally liable for wage theft
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section  1.  Section  2 of the lien law is amended by adding three new
     2  subdivisions 21, 22 and 23 to read as follows:
     3    21. Employee. The term "employee", when used in  this  chapter,  shall
     4  have the same meaning as "employee" pursuant to articles one, six, nine-
     5  teen  and  nineteen-A of the labor law, as applicable, or the Fair Labor
     6  Standards Act, 29 U.S.C. § 201 et. seq., as applicable.
     7    22. Employer. The term "employer", when used in  this  chapter,  shall
     8  have the same meaning as "employer" pursuant to articles one, six, nine-
     9  teen  and  nineteen-A of the labor law, as applicable, or the Fair Labor
    10  Standards Act, 29 U.S.C. § 201 et. seq., as applicable.
    11    23. Wage claim. The term "wage claim",  when  used  in  this  chapter,
    12  means  a claim that an employee has suffered a violation of sections one
    13  hundred seventy, one hundred ninety-one, one hundred  ninety-three,  one
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00946-01-9

        A. 486                              2
     1  hundred ninety-six-d, six hundred fifty-two or six hundred seventy-three
     2  of  the labor law or the related regulations and wage orders promulgated
     3  by the commissioner, a claim for wages due to an employee pursuant to an
     4  employment contract that were unpaid in violation of that contract, or a
     5  claim  that  an  employee has suffered a violation of 29 U.S.C. § 206 or
     6  207.
     7    § 2. Section 3 of the lien law, as amended by chapter 137 of the  laws
     8  of 1985, is amended to read as follows:
     9    §  3.  Mechanic's  lien  and  employee's  lien  on [real] property. 1.
    10  Mechanic's lien.  A  contractor,  subcontractor,  laborer,  materialman,
    11  landscape gardener, nurseryman or person or corporation selling fruit or
    12  ornamental trees, roses, shrubbery, vines and small fruits, who performs
    13  labor  or  furnishes materials for the improvement of real property with
    14  the consent or at the request of the owner thereof,  or  of  his  agent,
    15  contractor  or  subcontractor,  and any trust fund to which benefits and
    16  wage supplements are due or payable for the benefit  of  such  laborers,
    17  shall  have  a lien for the principal and interest, of the value, or the
    18  agreed price, of such labor, including benefits and wage supplements due
    19  or payable for the benefit of any laborer, or materials  upon  the  real
    20  property  improved or to be improved and upon such improvement, from the
    21  time of filing a notice of such lien  as  prescribed  in  this  chapter.
    22  Where the contract for an improvement is made with a husband or wife and
    23  the property belongs to the other or both, the husband or wife contract-
    24  ing  shall  also  be  presumed to be the agent of the other, unless such
    25  other having knowledge of the improvement shall, within ten  days  after
    26  learning  of  the  contract give the contractor written notice of his or
    27  her refusal to consent to the improvement. Within  the  meaning  of  the
    28  provisions  of this chapter, materials actually manufactured for but not
    29  delivered to the real property, shall also be  deemed  to  be  materials
    30  furnished.
    31    2.  Employee's  lien. An employee who has a wage claim as that term is
    32  defined in subdivision twenty-three of section two of this chapter shall
    33  have a lien on his or her employer's interest in property for the  value
    34  of  the  wage  claim arising out of the employment, including liquidated
    35  damages pursuant to subdivision one-a of  section  one  hundred  ninety-
    36  eight, section six hundred sixty-three or section six hundred eighty-one
    37  of  the  labor  law,  or  29 U.S.C. § 216 (b), from the time of filing a
    38  notice of such lien as prescribed in this chapter.  An  employee's  lien
    39  based on a wage claim may be had against the employer's interest in real
    40  property  and  against the employer's interest in personal property that
    41  can be sufficiently described within the meaning of section 9-108 of the
    42  uniform commercial code, except that an employee's lien shall not extend
    43  to deposit accounts or goods as those terms are defined in section 9-102
    44  of the uniform commercial code.  The department of labor and the  attor-
    45  ney  general  may obtain an employee's lien for the value of wage claims
    46  of the employees who are the  subject  of  their  investigations,  court
    47  actions or administrative agency actions.
    48    3.  As  used  in  this  article and unless otherwise specified, a lien
    49  shall mean an employee's lien or a mechanic's lien.
    50    § 3. Subdivisions 1 and 2 of section 4 of the lien law, subdivision  1
    51  as amended by chapter 515 of the laws of 1929 and subdivision 2 as added
    52  by chapter 704 of the laws of 1985, are amended to read as follows:
    53    (1) [Such] A mechanic's or employee's lien and employee's lien against
    54  real  property  shall  extend to the owner's right, title or interest in
    55  the real property and improvements, existing at the time of  filing  the
    56  notice  of  lien,  or thereafter acquired, except as hereinafter in this

        A. 486                              3
     1  article provided. If an owner assigns his interest in such real property
     2  by a general assignment for the benefit of creditors, within thirty days
     3  prior to such filing,  the  lien  shall  extend  to  the  interest  thus
     4  assigned.  If  any  part  of the real property subjected to such lien be
     5  removed by the owner or by any other person,  at  any  time  before  the
     6  discharge  thereof,  such  removal  shall  not  affect the rights of the
     7  lienor, either in respect to the remaining real property, or the part so
     8  removed. If labor  is  performed  for,  or  materials  furnished  to,  a
     9  contractor  or  subcontractor  for  an  improvement, the mechanic's lien
    10  shall not be for a sum greater than the sum earned  and  unpaid  on  the
    11  contract  at  the  time of filing the notice of lien, and any sum subse-
    12  quently earned thereon. In no case shall the owner be liable to  pay  by
    13  reason  of  all  mechanic's liens created pursuant to this article a sum
    14  greater than the value or  agreed  price  of  the  labor  and  materials
    15  remaining unpaid, at the time of filing notices of such liens, except as
    16  hereinafter provided.
    17    (2)  [Such]  A  mechanic's  or employee's lien shall not extend to the
    18  owner's right, title or interest  in  real  property  and  improvements,
    19  existing  at  the  time of filing the notice of lien if such lien arises
    20  from the failure of a lessee of the right to explore, develop or produce
    21  natural gas or oil, to pay for, compensate or render value for  improve-
    22  ments  made  with  the  consent  or  at  the request of such lessee by a
    23  contractor, subcontractor, materialman,  equipment  operator  or  owner,
    24  landscaper,  nurseryman,  or person or corporation who performs labor or
    25  furnishes materials for the exploration, development, or  production  of
    26  oil  or  natural  gas  or  otherwise improves such leased property. Such
    27  mechanic's or employee's lien shall extend to the improvements made  for
    28  the  exploration, development and production of oil and natural gas, and
    29  the working interest held by a lessee of the right to  explore,  develop
    30  or produce oil and natural gas.
    31    §  4. The opening paragraph of section 4-a of the lien law, as amended
    32  by chapter 696 of the laws of 1959, is amended to read as follows:
    33    The proceeds of any insurance which by the terms  of  the  policy  are
    34  payable to the owner of real property improved, and actually received or
    35  to  be  received by him because of the destruction or removal by fire or
    36  other casualty of an improvement on which lienors have  performed  labor
    37  or services or for which they have furnished materials, or upon which an
    38  employee  has  established an employee's lien, shall after the owner has
    39  been reimbursed therefrom for premiums paid by him,  if  any,  for  such
    40  insurance,  be  subject to liens provided by this act to the same extent
    41  and in the same order of priority as the real property would  have  been
    42  had such improvement not been so destroyed or removed.
    43    §  5. Subdivisions 1, 2 and 5 of section 9 of the lien law, as amended
    44  by chapter 515 of the laws of 1929, are amended to read as follows:
    45    1. The name of the lienor, and either the residence of the  lienor  or
    46  the  name  and business address of the lienor's attorney, if any; and if
    47  the lienor is a partnership or a corporation, the  business  address  of
    48  such  firm, or corporation, the names of partners and principal place of
    49  business, and if a foreign corporation, its principal place of  business
    50  within the state.
    51    2. The name of the owner of the [real] property against whose interest
    52  therein a lien is claimed, and the interest of the owner as far as known
    53  to the lienor.
    54    5. The amount unpaid to the lienor for such labor or materials, or the
    55  amount  of the wage claim if a wage claim is the basis for establishment

        A. 486                              4
     1  of the lien, the items of the wage claim and  the  value  thereof  which
     2  make up the amount for which the lienor claims a lien.
     3    §  6. Subdivision 1 of section 10 of the lien law, as amended by chap-
     4  ter 367 of the laws of 2011, is amended to read as follows:
     5    1. (a) Notice of mechanic's lien may be filed at any time  during  the
     6  progress  of  the  work  and the furnishing of the materials, or, within
     7  eight months after the completion of the contract, or the final perform-
     8  ance of the work, or the final furnishing of the materials, dating  from
     9  the last item of work performed or materials furnished; provided, howev-
    10  er,  that  where the improvement is related to real property improved or
    11  to be improved with a single family dwelling, the notice  of  mechanic's
    12  lien  may  be  filed at any time during the progress of the work and the
    13  furnishing of the materials, or, within four months after the completion
    14  of the contract, or the final performance of  the  work,  or  the  final
    15  furnishing of the materials, dating from the last item of work performed
    16  or materials furnished; and provided further where the notice of mechan-
    17  ic's  lien  is for retainage, the notice of mechanic's lien may be filed
    18  within ninety days after the date the retainage was due to be  released;
    19  except  that  in  the case of a mechanic's lien by a real estate broker,
    20  the notice of mechanic's lien may be filed only after the performance of
    21  the brokerage services and execution of lease by both lessor and  lessee
    22  and  only  if  a  copy of the alleged written agreement of employment or
    23  compensation is annexed to the notice of lien, provided that  where  the
    24  payment  pursuant to the written agreement of employment or compensation
    25  is to be made in installments, then a notice of lien may be filed within
    26  eight months after the final payment is due, but in no event later  than
    27  a date five years after the first payment was made. For purposes of this
    28  section,  the term "single family dwelling" shall not include a dwelling
    29  unit which is a part of a subdivision that has been filed with a munici-
    30  pality in which the subdivision is located when at the time the lien  is
    31  filed,  such  property  in the subdivision is owned by the developer for
    32  purposes other  than  his  personal  residence.  For  purposes  of  this
    33  section,  "developer"  shall  mean  and  include any private individual,
    34  partnership, trust or corporation which improves two or more parcels  of
    35  real  property  with single family dwellings pursuant to a common scheme
    36  or plan. [The]
    37    (b) Notice of employee's lien may be filed at any time not later  than
    38  three  years following the end of the employment giving rise to the wage
    39  claim.
    40    (c) A notice of lien, other than for a lien on personal property, must
    41  be filed in the clerk's office of the county where the property is situ-
    42  ated. If such property is situated in two or more counties,  the  notice
    43  of  lien shall be filed in the office of the clerk of each of such coun-
    44  ties. The county clerk of each county shall provide and keep a  book  to
    45  be  called  the  "lien docket," which shall be suitably ruled in columns
    46  headed "owners," "lienors," "lienor's attorney,"  "property,"  "amount,"
    47  "time of filing," "proceedings had," in each of which he shall enter the
    48  particulars  of  the  notice, properly belonging therein. The date, hour
    49  and minute of the filing of each notice of lien shall be entered in  the
    50  proper  column.  Except  where the county clerk maintains a block index,
    51  the names of the owners shall be arranged in such book  in  alphabetical
    52  order.  The  validity of the lien and the right to file a notice thereof
    53  shall not be affected by the death of the owner  before  notice  of  the
    54  lien is filed.  A notice of employee's lien on personal property must be
    55  filed,  together with a financing statement, in the filing office as set
    56  forth in section 9-501 of the uniform commercial code.

        A. 486                              5
     1    § 7. Section 11 of the lien law, as amended by chapter 147 of the laws
     2  of 1996, is amended to read as follows:
     3    §  11.  Service of copy of notice of lien.  1. Within five days before
     4  or thirty days after filing the notice of a mechanic's lien, the  lienor
     5  shall  serve  a copy of such notice upon the owner, if a natural person,
     6  (a) by delivering the same to him personally, or if the owner cannot  be
     7  found,  to his agent or attorney, or (b) by leaving it at his last known
     8  place of residence in the city or town in which  the  real  property  or
     9  some  part  thereof  is  situated,  with  a  person  of suitable age and
    10  discretion, or (c) by registered or certified mail addressed to his last
    11  known place of residence, or (d) if such owner has no such residence  in
    12  such  city or town, or cannot be found, and he has no agent or attorney,
    13  by affixing a copy thereof conspicuously on such property,  between  the
    14  hours of nine o'clock in the forenoon and four o'clock in the afternoon;
    15  if  the owner be a corporation, said service shall be made (i) by deliv-
    16  ering such copy to and leaving the same with the president,  vice-presi-
    17  dent, secretary or clerk to the corporation, the cashier, treasurer or a
    18  director  or  managing  agent  thereof, personally, within the state, or
    19  (ii) if such officer cannot be found within the state by affixing a copy
    20  thereof conspicuously on such property between the hours of nine o'clock
    21  in the forenoon and four o'clock in the afternoon, or  (iii)  by  regis-
    22  tered  or  certified mail addressed to its last known place of business.
    23  Failure to file proof of such a service with  the  county  clerk  within
    24  thirty-five  days  after the notice of lien is filed shall terminate the
    25  notice as a lien. Until service of the notice has been  made,  as  above
    26  provided, an owner, without knowledge of the lien, shall be protected in
    27  any  payment made in good faith to any contractor or other person claim-
    28  ing a lien.
    29    2. Within five days before or thirty days after filing the  notice  of
    30  an  employee's  lien,  the lienor shall serve a copy of such notice upon
    31  the employer, if a natural person, (a) by delivering  the  same  to  him
    32  personally,  or  if the employer cannot be found, to his agent or attor-
    33  ney, or (b) by leaving it as his last known place of residence or  busi-
    34  ness, with a person of suitable age and discretion, or (c) by registered
    35  or  certified  mail  addressed  to  his last known place of residence or
    36  business, or (d) if such employer owns real property, by affixing a copy
    37  thereof conspicuously on  such  property,  between  the  hours  of  nine
    38  o'clock  in  the  forenoon and four o'clock in the afternoon. The lienor
    39  also shall, within thirty days after filing  the  notice  of  employee's
    40  lien, affix a copy thereof conspicuously on the real property identified
    41  in  the  notice of employee's lien, between the hours of nine o'clock in
    42  the forenoon and four o'clock in the afternoon. If  the  employer  be  a
    43  corporation,  said  service shall be made (i) by delivering such copy to
    44  and leaving the same with the president,  vice-president,  secretary  or
    45  clerk to the corporation, the cashier, treasurer or a director or manag-
    46  ing agent thereof, personally, within the state, or (ii) if such officer
    47  cannot be found within the state by affixing a copy thereof conspicuous-
    48  ly  on  such  property between the hours of nine o'clock in the forenoon
    49  and four o'clock in the afternoon, or (iii) by registered  or  certified
    50  mail  addressed to its last known place of business, or (iv) by delivery
    51  to the secretary of the department  of  state  in  the  same  manner  as
    52  required  by  subparagraph one of paragraph (b) of section three hundred
    53  six of the business corporation law.  Failure to file proof  of  such  a
    54  service  with  the county clerk within thirty-five days after the notice
    55  of lien is filed shall terminate the notice as a lien. Until service  of
    56  the notice has been made, as above provided, an owner, without knowledge

        A. 486                              6
     1  of the lien, shall be protected in any payment made in good faith to any
     2  other person claiming a lien.
     3    §  8.  Section  11-b of the lien law, as amended by chapter 147 of the
     4  laws of 1996, is amended to read as follows:
     5    § 11-b. Copy of notice of mechanic's lien to a contractor  or  subcon-
     6  tractor.    Within five days before or thirty days after filing a notice
     7  of mechanic's lien in accordance with section ten of this chapter or the
     8  filing of an amendment of notice of mechanic's lien in  accordance  with
     9  section twelve-a of this [chapter] article the lienor shall serve a copy
    10  of such notice or amendment by certified mail on the contractor, subcon-
    11  tractor, assignee or legal representative for whom he was employed or to
    12  whom  he furnished materials or if the lienor is a contractor or subcon-
    13  tractor to the person, firm or corporation with whom  the  contract  was
    14  made.  A  lienor having a direct contractual relationship with a subcon-
    15  tractor or a sub-subcontractor but not  with  a  contractor  shall  also
    16  serve  a  copy  of  such  notice  or  amendment by certified mail to the
    17  contractor. Failure to file proof of such  a  service  with  the  county
    18  clerk  within  thirty-five  days after the notice of lien is filed shall
    19  terminate the notice as a lien. Any lienor, or a person acting on behalf
    20  of a lienor, who fails to serve a copy of the notice of mechanic's  lien
    21  as  required  by  this section shall be liable for reasonable attorney's
    22  fees, costs and expenses,  as  determined  by  the  court,  incurred  in
    23  obtaining such copy.
    24    §  9.  Subdivision  1  of  section 12-a of the lien law, as amended by
    25  chapter 1048 of the laws of 1971, is amended to read as follows:
    26    1. Within sixty days after the original filing, a lienor may amend his
    27  lien upon twenty days notice to existing  lienors,  mortgagees  and  the
    28  owner,  provided  that  no action or proceeding to enforce or cancel the
    29  mechanics' lien or employee's lien has  been  brought  in  the  interim,
    30  where  the purpose of the amendment is to reduce the amount of the lien,
    31  except the question of wilful exaggeration shall survive such amendment.
    32    § 10. Subdivision 1 of section 13 of the lien law, as amended by chap-
    33  ter 878 of the laws of 1947, is amended to read as follows:
    34    (1) [A] An employee's lien, or a lien for materials furnished or labor
    35  performed in the improvement of real property, shall have priority  over
    36  a  conveyance,  mortgage,  judgment or other claim against such property
    37  not recorded, docketed or filed at the time of the filing of the  notice
    38  of  such  lien,  except  as  hereinafter  in this chapter provided; over
    39  advances made upon any mortgage or other encumbrance thereon after  such
    40  filing,  except  as  hereinafter  in this article provided; and over the
    41  claim of a creditor who has not furnished materials or  performed  labor
    42  upon such property, if such property has been assigned by the owner by a
    43  general  assignment  for  the  benefit  of creditors, within thirty days
    44  before the filing of either of such notices; and also over an attachment
    45  hereafter issued or a money judgment hereafter recovered upon  a  claim,
    46  which,  in  whole  or  in  part,  was not for materials furnished, labor
    47  performed or moneys advanced for the improvement of such real  property;
    48  and  over  any claim or lien acquired in any proceedings upon such judg-
    49  ment. Such liens shall also have priority  over  advances  made  upon  a
    50  contract  by an owner for an improvement of real property which contains
    51  an option to the contractor, his successor or assigns  to  purchase  the
    52  property, if such advances were made after the time when the labor began
    53  or  the first item of material was furnished, as stated in the notice of
    54  lien. If several buildings are demolished, erected, altered or repaired,
    55  or several pieces or parcels of real property are  improved,  under  one
    56  contract,  and  there  are  conflicting liens thereon, each lienor shall

        A. 486                              7
     1  have priority upon the particular part of the real property or upon  the
     2  particular  building  or  premises  where  his labor is performed or his
     3  materials are used. Persons shall have no priority  on  account  of  the
     4  time of filing their respective notices of liens, but all liens shall be
     5  on  a  parity except as hereinafter in section fifty-six of this chapter
     6  provided; and except that in all cases  laborers  for  daily  or  weekly
     7  wages  with  a  mechanic's  lien, and employees with an employee's lien,
     8  shall have preference over all other claimants under this article.
     9    § 11. Section 17 of the lien law, as amended by  chapter  324  of  the
    10  laws of 2000, is amended to read as follows:
    11    §  17.  Duration  of lien. 1. (a) No mechanic's lien specified in this
    12  article shall be a lien for a longer period  than  one  year  after  the
    13  notice  of  lien  has  been  filed, unless within that time an action is
    14  commenced to foreclose the lien, and a notice of the  pendency  of  such
    15  action,  whether  in  a  court of record or in a court not of record, is
    16  filed with the county clerk of the county in which the notice of lien is
    17  filed, containing the names of the parties to the action, the object  of
    18  the  action,  a brief description of the real property affected thereby,
    19  and the time of filing the notice of lien; or  unless  an  extension  to
    20  such lien, except for a lien on real property improved or to be improved
    21  with  a  single  family  dwelling, is filed with the county clerk of the
    22  county in which the notice of lien is filed within  one  year  from  the
    23  filing  of  the  original  notice of lien, continuing such lien and such
    24  lien shall be redocketed as of the date of filing such  extension.  Such
    25  extension  shall  contain  the  names of the lienor and the owner of the
    26  real property against whose interest therein such  lien  is  claimed,  a
    27  brief description of the real property affected by such lien, the amount
    28  of  such  lien, and the date of filing the notice of lien. No lien shall
    29  be continued by such extension for more than one year  from  the  filing
    30  thereof.  In  the event an action is not commenced to foreclose the lien
    31  within such extended period, such lien shall be extinguished  unless  an
    32  order  be  granted  by  a court of record or a judge or justice thereof,
    33  continuing such lien, and such lien shall be redocketed as of  the  date
    34  of  granting such order and a statement made that such lien is continued
    35  by virtue of such order. A lien on  real  property  improved  or  to  be
    36  improved  with a single family dwelling may only be extended by an order
    37  of a court of record, or a judge or justice thereof. No  lien  shall  be
    38  continued by court order for more than one year from the granting there-
    39  of,  but  a  new  order  and entry may be made in each of two successive
    40  years. If a lienor is made a party defendant in  an  action  to  enforce
    41  another  lien, and the plaintiff or such defendant has filed a notice of
    42  the pendency of the action within the time prescribed in  this  section,
    43  the  lien  of  such defendant is thereby continued. Such action shall be
    44  deemed an action to enforce the lien of such defendant lienor. The fail-
    45  ure to file a notice of pendency of action shall not abate the action as
    46  to any person liable for the payment of the debt specified in the notice
    47  of lien, and the action may  be  prosecuted  to  judgment  against  such
    48  person.  The  provisions  of  this section in regard to continuing liens
    49  shall apply to liens discharged by deposit or by order on the filing  of
    50  an  undertaking.  Where  a  lien is discharged by deposit or by order, a
    51  notice of pendency of action shall not be filed.
    52    (b) A lien, the duration of which has been extended by the filing of a
    53  notice of the pendency of an action as above provided,  shall  neverthe-
    54  less terminate as a lien after such notice has been canceled as provided
    55  in  section  sixty-five  hundred  fourteen of the civil practice law and
    56  rules or has ceased to be effective as constructive notice  as  provided

        A. 486                              8
     1  in  section  sixty-five  hundred  thirteen of the civil practice law and
     2  rules.
     3    2. (a) No employee's lien on real property shall be a lien for a long-
     4  er  period than one year after the notice of lien has been filed, unless
     5  an extension to such lien is filed with the county clerk of  the  county
     6  in  which the notice of lien is filed within one year from the filing of
     7  the original notice of lien, continuing such lien and such lien shall be
     8  redocketed as of the date of filing such extension. Such extension shall
     9  contain the names of the lienor and  the  owner  of  the  real  property
    10  against whose interest therein such lien is claimed, a brief description
    11  of  the property affected by such lien, the amount of such lien, and the
    12  date of filing the notice of lien.  No lien shall be continued  by  such
    13  extension  for  more than one year from the filing thereof. In the event
    14  an action is not commenced to obtain judgment on the wage  claim  or  to
    15  foreclose  the  lien  within  such  extended  period, such lien shall be
    16  extinguished unless an order be granted by a court of record or a  judge
    17  or justice thereof, continuing such lien, and such lien shall be redock-
    18  eted  as  of  the  date of granting such order and a statement made that
    19  such lien is continued by virtue of such order.
    20    (b) No employee's lien on personal property shall  be  a  lien  for  a
    21  longer  period  than  one  year  after  the financing statement has been
    22  recorded, unless an extension to such lien, is  filed  with  the  filing
    23  office in which the financing statement is required to be filed pursuant
    24  to section 9-501 of the uniform commercial code within one year from the
    25  filing  of  the original financing statement, continuing such lien. Such
    26  extension shall contain the names of the lienor and  the  owner  of  the
    27  property  against  whose  interest therein such lien is claimed, a brief
    28  description of the prior financing statement to  be  extended,  and  the
    29  date  of filing the prior financing statement.  No lien shall be contin-
    30  ued by such extension for more than one year from the filing thereof. In
    31  the event an action is not commenced to  obtain  judgment  on  the  wage
    32  claim  or  to  foreclose the lien within such extended period, such lien
    33  shall be extinguished unless an order be granted by a court of record or
    34  a judge or justice thereof, continuing such lien, and such lien shall be
    35  refiled as of the date of granting such order and a statement made  that
    36  such lien is continued by virtue of such order.
    37    (c)  If  a  lienor  is  made a party defendant in an action to enforce
    38  another lien, and the plaintiff or such defendant has filed a notice  of
    39  the  pendency  of the action within the time prescribed in this section,
    40  the lien of such defendant is thereby continued. Such  action  shall  be
    41  deemed an action to enforce the lien of such defendant lienor. The fail-
    42  ure to file a notice of pendency of action shall not abate the action as
    43  to any person liable for the payment of the debt specified in the notice
    44  of  lien,  and  the  action  may  be prosecuted to judgment against such
    45  person.  The provisions of this section in regard  to  continuing  liens
    46  shall  apply to liens discharged by deposit or by order on the filing of
    47  an undertaking. Where a lien is discharged by deposit  or  by  order,  a
    48  notice of pendency of action shall not be filed.
    49    (d) Notwithstanding the foregoing, if a lienor commences a foreclosure
    50  action  or  an  action to obtain a judgment on the wage claim within one
    51  year from the filing of the notice of  lien  on  real  property  or  the
    52  recording of the financing statement creating lien on personal property,
    53  the lien shall be extended during the pendency of the action and for one
    54  hundred  twenty  days  following  the  entry  of  final judgment in such
    55  action, unless the action results in a final judgment or  administrative
    56  order  in the lienor's favor on the wage claims and the lienor commences

        A. 486                              9
     1  a foreclosure action, in which instance the lien shall be  valid  during
     2  the pendency of the foreclosure action. If a lien is extended due to the
     3  pendency  of  a  foreclosure action or an action to obtain a judgment on
     4  the  wage  claim,  the  lienor  shall file a notice of such pendency and
     5  extension with the county clerk of the county in  which  the  notice  of
     6  lien  is  filed,  containing the names of the parties to the action, the
     7  object of the action, a  brief  description  of  the  property  affected
     8  thereby,  and the time of filing the notice of lien, or in the case of a
     9  lien on personal property shall file such notice with the office author-
    10  ized to accept financing statements pursuant to  section  9-501  of  the
    11  uniform  commercial  code.  For  purposes  of this section, an action to
    12  obtain judgment on a wage claim includes an action brought in any  court
    13  of  competent jurisdiction, the submission of a complaint to the depart-
    14  ment of labor or the submission of a claim to arbitration pursuant to an
    15  arbitration agreement. An action also includes an investigation of  wage
    16  claims by the commissioner of labor or the attorney general of the state
    17  of New York, regardless of whether such investigation was initiated by a
    18  complaint.
    19    (e) A lien, the duration of which has been extended by the filing of a
    20  notice  of  the pendency of an action as above provided, shall neverthe-
    21  less terminate as a lien after such notice has been canceled as provided
    22  in section sixty-five hundred fourteen of the  civil  practice  law  and
    23  rules  or  has ceased to be effective as constructive notice as provided
    24  in section sixty-five hundred thirteen of the  civil  practice  law  and
    25  rules.
    26    §  12. Subdivisions 2 and 4 of section 19 of the lien law, subdivision
    27  2 as amended by chapter 310 of the laws of 1962, subdivision 4 as  added
    28  by  chapter  582 of the laws of 2002 and paragraph a of subdivision 4 as
    29  further amended by section 104 of part A of chapter 62 of  the  laws  of
    30  2011, are amended to read as follows:
    31    (2)  By failure to begin an action to foreclose such lien or to secure
    32  an order continuing it, within one year from  the  time  of  filing  the
    33  notice  of lien, unless (i) an action be begun within the same period to
    34  foreclose a mortgage or another mechanic's lien upon the  same  property
    35  or  any  part  thereof  and a notice of pendency of such action is filed
    36  according to law, or (ii) an action is commenced to obtain a judgment on
    37  a wage claim pursuant to subdivision two of section  seventeen  of  this
    38  article,  but  a  lien,  the  duration of which has been extended by the
    39  filing of a notice of the pendency of  an  action  as  herein  provided,
    40  shall  nevertheless  terminate  as  a  lien  after  such notice has been
    41  cancelled or has ceased to be effective as constructive notice.
    42    (4) Either before or after the beginning of an action by the employer,
    43  owner or contractor executing a bond or undertaking in an  amount  equal
    44  to  one  hundred ten percent of such lien conditioned for the payment of
    45  any judgment which may be rendered against the property or employer  for
    46  the enforcement of the lien:
    47    a.  The  execution  of any such bond or undertaking by any fidelity or
    48  surety company authorized by the laws of this state  to  transact  busi-
    49  ness,  shall be sufficient; and where a certificate of qualification has
    50  been issued by  the  superintendent  of  financial  services  under  the
    51  provisions  of  section one thousand one hundred eleven of the insurance
    52  law, and has not been revoked, no justification or notice thereof  shall
    53  be  necessary. Any such company may execute any such bond or undertaking
    54  as surety by the hand of its  officers,  or  attorney,  duly  authorized
    55  thereto  by  resolution  of  its board of directors, a certified copy of
    56  which resolution, under the seal of said company, shall  be  filed  with

        A. 486                             10
     1  each  bond  or  undertaking. Any such bond or undertaking shall be filed
     2  with the clerk of the county in which the notice of lien is filed, and a
     3  copy shall be served upon the adverse party. The undertaking  is  effec-
     4  tive  when so served and filed. If a certificate of qualification issued
     5  pursuant to subsections (b), (c) and (d) of  section  one  thousand  one
     6  hundred eleven of the insurance law is not filed with the undertaking, a
     7  party may except, to the sufficiency of a surety and by a written notice
     8  of  exception  served  upon  the  adverse  party  within  ten days after
     9  receipt, a copy of the undertaking. Exceptions deemed by  the  court  to
    10  have  been  taken  unnecessarily,  or  for  vexation or delay, may, upon
    11  notice, be set aside, with costs. Where  no  exception  to  sureties  is
    12  taken  within  ten  days  or  where  exceptions taken are set aside, the
    13  undertaking shall be allowed.
    14    b. In the case of bonds or undertakings not executed pursuant to para-
    15  graph a of this subdivision, the employer,  owner  or  contractor  shall
    16  execute  an  undertaking with two or more sufficient sureties, who shall
    17  be free holders, to the clerk of the county where the premises are situ-
    18  ated. The sureties must together justify in  at  least  double  the  sum
    19  named  in  the  undertaking. A copy of the undertaking, with notice that
    20  the sureties will justify before the court, or a judge or justice there-
    21  of, at the time and place therein mentioned, must  be  served  upon  the
    22  lienor  or  his attorney, not less than five days before such time. Upon
    23  the approval of the undertaking by the court, judge or justice an  order
    24  shall be made by such court, judge or justice discharging such lien.
    25    c.  If  the  lienor  cannot  be found, or does not appear by attorney,
    26  service under this subsection may be made by  leaving  a  copy  of  such
    27  undertaking  and  notice  at  the  lienor's  place of residence, or if a
    28  corporation at its principal place of business within the state as stat-
    29  ed in the notice of lien, with a person of suitable age  and  discretion
    30  therein,  or  if  the house of his abode or its place of business is not
    31  stated in said notice of lien and is not known, then in such  manner  as
    32  the  court  may direct. The premises, if any, described in the notice of
    33  lien as the lienor's residence or place of business shall be  deemed  to
    34  be  his said residence or its place of business for the purposes of said
    35  service at the time thereof, unless it is shown affirmatively  that  the
    36  person  servicing  the  papers or directing the service had knowledge to
    37  the contrary. Notwithstanding the other provisions of  this  subdivision
    38  relating  to service of notice, in any case where the mailing address of
    39  the lienor is outside the state such service may be made  by  registered
    40  or certified mail, return receipt requested, to such lienor at the mail-
    41  ing address contained in the notice of lien.
    42    d. Except as otherwise provided in this subdivision, the provisions of
    43  article  twenty-five  of  the  civil  practice  law and rules regulating
    44  undertakings is applicable to  a  bond  or  undertaking  given  for  the
    45  discharge  of a lien on account of private improvements or of an employ-
    46  ee's lien.
    47    § 13. Section 24 of the lien law, as amended by  chapter  515  of  the
    48  laws of 1929, is amended to read as follows:
    49    §  24.  Enforcement  of  [mechanic's]  lien.  (1)  Real  property. The
    50  [mechanics'] liens on real property specified in  this  article  may  be
    51  enforced  against the property specified in the notice of lien and which
    52  is subject thereto and against any person liable for the debt upon which
    53  the lien is founded, as prescribed in article three of this chapter.
    54    (2) Personal property. An employee's lien on personal property  speci-
    55  fied  in  this  article may immediately be enforced against the property
    56  through a foreclosure as prescribed  in  article  nine  of  the  uniform

        A. 486                             11
     1  commercial code, or upon judgment obtained by the employee, commissioner
     2  of  labor  or attorney general of the state of New York, may be enforced
     3  in any manner available to the judgment  creditor  pursuant  to  article
     4  nine of the uniform commercial code or other applicable laws.
     5    §  14.  Section  26  of the lien law, as amended by chapter 373 of the
     6  laws of 1977, is amended to read as follows:
     7    § 26. Subordination of liens after agreement with owner.  In  case  an
     8  owner of real property shall execute to one or more persons, or a corpo-
     9  ration,  as trustee or trustees, a bond and mortgage or a note and mort-
    10  gage affecting such property in whole or in part, or  an  assignment  of
    11  the  moneys due or to become due under a contract for a building loan in
    12  relation to such property, and in case such mortgage, if any,  shall  be
    13  recorded  in  the  office  of the register of the county where such real
    14  property is situated, or if such county has  no  register  then  in  the
    15  office of the clerk of such county, and in case such assignment, if any,
    16  shall  be filed in the office of the clerk of the county where such real
    17  property is situated; and in  case  lienors  having  [mechanics']  liens
    18  against  said  real property, notices of which have been filed up to and
    19  not later than fifteen days after the recording of such mortgage or  the
    20  filing  of  such assignment, and which liens have not been discharged as
    21  in this article provided, shall, to the extent of  at  least  fifty-five
    22  per  centum of the aggregate amount for which such notices of liens have
    23  been so filed, approve such bond and mortgage or such note and mortgage,
    24  if any, and such assignment, if any, by an instrument or instruments  in
    25  writing, duly acknowledged and filed in the office of such county clerk,
    26  then  all  mechanics'  liens  for  labor performed or material furnished
    27  prior to the recording of such mortgage or filing  of  such  assignment,
    28  whether  notices  thereof  have been theretofore or are thereafter filed
    29  and which have not been discharged as in this article provided, shall be
    30  subordinate to the lien of such trust bond and mortgage  or  such  trust
    31  note  and  mortgage to the extent of the aggregate amount of all certif-
    32  icates of interest therein issued by such trustee or trustees, or  their
    33  successors,  for moneys loaned, materials furnished, labor performed and
    34  any other indebtedness incurred after said  trust  mortgage  shall  have
    35  been  recorded, and for expenses in connection with said trust mortgage,
    36  and shall also be subordinate to the lien of the bond  and  mortgage  or
    37  note  and  mortgage,  given  to  secure the amount agreed to be advanced
    38  under such contract for a building loan to  the  extent  of  the  amount
    39  which  shall be advanced by the holder of such bond and mortgage or such
    40  note and mortgage to the trustee or trustees, or their successors, under
    41  such assignment. The provisions of this section shall apply to all bonds
    42  and mortgages and notes and mortgages and all assignments of moneys due,
    43  or to become due under building loan contracts executed by  such  owner,
    44  in like manner, and recorded or filed, from time to time as hereinbefore
    45  provided.  In  case of an assignment to trustees under the provisions of
    46  this section, the trustees and their successors shall be the  agents  of
    47  the assignor to receive and receipt for any and all sums advanced by the
    48  holder  of the building loan bond and mortgage or the building loan note
    49  and mortgage under the building loan contract and  such  assignment.  No
    50  lienor  shall  have  any priority over the bond and mortgage or note and
    51  mortgage given to secure the money agreed to be advanced under a  build-
    52  ing loan contract or over the advances made thereunder, by reason of any
    53  act preceding the making and approval of such assignment.
    54    §  15.  Section  38  of the lien law, as amended by chapter 859 of the
    55  laws of 1930, is amended to read as follows:

        A. 486                             12
     1    § 38. Itemized statement may be required of lienor. A lienor  who  has
     2  filed  a  notice of mechanic's lien shall, on demand in writing, deliver
     3  to the owner or contractor making such demand  a  statement  in  writing
     4  which  shall  set forth the items of labor and/or material and the value
     5  thereof  which  make up the amount for which he claims a lien, and which
     6  shall also set forth the terms of the contract under  which  such  items
     7  were  furnished.    The statement shall be verified by the lienor or his
     8  agent in the form required for the verification of  notices  in  section
     9  nine  of this [chapter] article. If the lienor shall fail to comply with
    10  such a demand within five days after the same shall have  been  made  by
    11  the  owner  or  contractor,  or  if  the lienor delivers an insufficient
    12  statement, the person aggrieved may petition the supreme court  of  this
    13  state  or  any  justice thereof, or the county court of the county where
    14  the premises are situated, or the county judge of  such  county  for  an
    15  order  directing  the  lienor  within  a  time specified in the order to
    16  deliver to the petitioner the statement required by  this  section.  Two
    17  days'  notice  in  writing  of such application shall be served upon the
    18  lienor. Such service shall be made in the manner provided by law for the
    19  personal service of a summons. The court or a justice or  judge  thereof
    20  shall  hear  the  parties  and  upon being satisfied that the lienor has
    21  failed, neglected or refused to comply with  the  requirements  of  this
    22  section  shall  have  an appropriate order directing such compliance. In
    23  case the lienor fails to comply with the order so made within  the  time
    24  specified,  then  upon  five  days'  notice to the lienor, served in the
    25  manner provided by law for the personal service of a summons, the  court
    26  or a justice or judge thereof may make an order cancelling the lien.
    27    §  16. Section 39 of the lien law, as added by chapter 859 of the laws
    28  of 1930, is amended to read as follows:
    29    § 39. Lien wilfully exaggerated is void. In any action  or  proceeding
    30  to  enforce  a [mechanic's] lien upon a private or public improvement or
    31  in which the validity of the lien is an issue, if the court  shall  find
    32  that  a lienor has wilfully exaggerated the amount for which he claims a
    33  lien as stated in his notice of lien, his lien shall be declared  to  be
    34  void  and  no recovery shall be had thereon. No such lienor shall have a
    35  right to file any other or further lien for the same claim. A second  or
    36  subsequent  lien  filed  in contravention of this section may be vacated
    37  upon application to the court on two days' notice.
    38    § 17. Section 40 of the lien law, as amended by  chapter  515  of  the
    39  laws of 1929, is amended to read as follows:
    40    §  40.  Construction  of  article.  This article is to be construed in
    41  connection with article two of this chapter,  and  provides  proceedings
    42  for  the  enforcement  of  employee's liens on real property, as well as
    43  liens for labor performed and materials furnished in the improvement  of
    44  real property, created by virtue of such article.
    45    §  18.  Section  41  of the lien law, as amended by chapter 807 of the
    46  laws of 1952, is amended to read as follows:
    47    § 41. Enforcement of mechanic's or employee's lien on real property. A
    48  mechanic's lien or employee's lien on  real  property  may  be  enforced
    49  against  such  property,  and  against a person liable for the debt upon
    50  which the lien is founded, by an action, by the lienor, his assignee  or
    51  legal  representative,  in the supreme court or in a county court other-
    52  wise having jurisdiction, regardless of the amount of such debt, or in a
    53  court which has jurisdiction in an action founded on a  contract  for  a
    54  sum of money equivalent to the amount of such debt.
    55    §  19.  Section  43  of the lien law, as amended by chapter 310 of the
    56  laws of 1962, is amended to read as follows:

        A. 486                             13
     1    § 43. Action in a court  of  record;  consolidation  of  actions.  The
     2  provisions  of the real property actions and proceedings law relating to
     3  actions for the foreclosure of a mortgage upon real  property,  and  the
     4  sale  and the distribution of the proceeds thereof apply to actions in a
     5  court  of  record,  to  enforce mechanics' liens and employees' liens on
     6  real property, except as otherwise provided in this article. If  actions
     7  are  brought  by  different  lienors  in a court of record, the court in
     8  which the first action was brought, may, upon its own  motion,  or  upon
     9  the  application of any party in any of such actions, consolidate all of
    10  such actions.
    11    § 20. Section 46 of the lien law, as amended by  chapter  515  of  the
    12  laws of 1929, is amended to read as follows:
    13    §  46.  Action  in  a  court  not of record. If an action to enforce a
    14  mechanic's lien or employee's lien against real property is brought in a
    15  court not of record, it shall be commenced by the personal service  upon
    16  the  owner  of  a summons and complaint verified in the same manner as a
    17  complaint in an action in a court of  record.  The  complaint  must  set
    18  forth  substantially  the facts contained in the notice of lien, and the
    19  substance of the agreement under which the labor was  performed  or  the
    20  materials  were  furnished, or if the lien is based upon a wage claim as
    21  defined in section two of this chapter, the basis for such  wage  claim.
    22  The  form  and  contents of the summons shall be the same as provided by
    23  law for the commencement of an action upon a contract in such court. The
    24  summons must be returnable not less than twelve  nor  more  than  twenty
    25  days  after  the  date of the summons, or if service is made by publica-
    26  tion, after the day of the last publication of  the  summons.    Service
    27  must be made at least eight days before the return day.
    28    §  21.  Section  50  of the lien law, as amended by chapter 515 of the
    29  laws of 1929, is amended to read as follows:
    30    § 50. Execution. Execution may be issued upon a judgment  obtained  in
    31  an  action  to  enforce  a mechanic's lien or an employee's lien against
    32  real property in a court not of record, which shall direct  the  officer
    33  to  sell the title and interest of the owner in the premises, upon which
    34  the lien set forth in the complaint existed at the time  of  filing  the
    35  notice of lien.
    36    §  22.  Section  53  of the lien law, as amended by chapter 515 of the
    37  laws of 1929, is amended to read as follows:
    38    § 53. Costs and disbursements. If an action is brought  to  enforce  a
    39  mechanic's  lien  or an employee's lien against real property in a court
    40  of record, the costs and disbursements shall rest in the  discretion  of
    41  the  court,  and  may  be  awarded to the prevailing party. The judgment
    42  rendered in such an action shall include the amount of  such  costs  and
    43  specify  to whom and by whom the costs are to be paid. If such action is
    44  brought in a court not of record, they shall be the same as  allowed  in
    45  civil  actions  in  such  court.  The  expenses  incurred in serving the
    46  summons by publication may be added to the amount of costs  now  allowed
    47  in such court.
    48    §  23.  Section  59  of the lien law, as amended by chapter 515 of the
    49  laws of 1929, is amended to read as follows:
    50    § 59. Vacating of a [mechanic's] lien; cancellation of bond; return of
    51  deposit, by order of court. 1. A mechanic's lien  notice  of  which  has
    52  been filed on real property or a bond given to discharge the same may be
    53  vacated  and cancelled or a deposit made to discharge a lien pursuant to
    54  section twenty of this chapter may be returned, by an order of  a  court
    55  of  record. Before such order shall be granted, a notice shall be served
    56  upon the lienor, either personally or by leaving it as  his  last  known

        A. 486                             14
     1  place  of  residence,  with a person of suitable age, with directions to
     2  deliver it to the lienor.  Such  notice  shall  require  the  lienor  to
     3  commence  an  action to enforce the lien, within a time specified in the
     4  notice,  not  less  than  thirty  days from the time of service, or show
     5  cause at a special term of a court of record, or at a county court, in a
     6  county in which the property is situated, at a time and place  specified
     7  therein,  why  the  notice of lien filed or the bond given should not be
     8  vacated and cancelled, or the deposit returned,  as  the  case  may  be.
     9  Proof  of  such service and that the lienor has not commenced the action
    10  to foreclose such lien, as directed in the  notice,  shall  be  made  by
    11  affidavit, at the time of applying for such order.
    12    2.  An employee's lien notice of which has been filed on real property
    13  or a bond given to discharge the same may be vacated and cancelled or  a
    14  deposit  made  to  discharge  a  lien pursuant to section twenty of this
    15  chapter may be returned, by an order of a court of record.  Before  such
    16  order shall be granted, a notice shall be served upon the lienor, either
    17  personally  or  by  leaving  it  at his last known place of residence or
    18  attorney's place of business,  with  a  person  of  suitable  age,  with
    19  directions  to  deliver  it to the lienor. Such notice shall require the
    20  lienor to commence an action to enforce the  lien,  or  to  commence  an
    21  action  to  obtain  judgment  on  the wage claim upon which the lien was
    22  established, within a time specified in the notice, not less than ninety
    23  days from the time of service, or show cause at  a  special  term  of  a
    24  court of record, or at a county court, in a county in which the property
    25  is  situated,  at  a time and place specified therein, why the notice of
    26  lien filed or the bond given should not be vacated and cancelled, or the
    27  deposit returned, as the case may be. Proof of such service and that the
    28  lienor has not commenced the action to foreclose such lien or an  action
    29  to  obtain  judgment  on  the  wage claim upon which the lien was estab-
    30  lished, as directed in the notice, shall be made by  affidavit,  at  the
    31  time of applying for such order.
    32    §  24.  Section  62  of the lien law, as amended by chapter 697 of the
    33  laws of 1934, is amended to read as follows:
    34    § 62. Bringing in new parties. A lienor who has filed a notice of lien
    35  after the commencement of an action in a court of record to foreclose or
    36  enforce an employee's lien or a mechanic's lien against real property or
    37  a public improvement, may at any  time  up  to  and  including  the  day
    38  preceding  the  day on which the trial of such action is commenced, make
    39  application upon notice to the plaintiff or his attorney in such action,
    40  to be made a party therein. Upon good cause shown, the court must  order
    41  such lienor to be brought in by amendment. If the application is made by
    42  any  other  party  in  said action to make such lienor or other person a
    43  party, the court may in its  discretion  direct  such  lienor  or  other
    44  person  to  be  brought in by like amendment. The order to be entered on
    45  such application shall provide the time for and manner  of  serving  the
    46  pleading of such additional lienor or other person and shall direct that
    47  the  pleadings,  papers  and proceedings of the other several parties in
    48  such action, shall be deemed amended, so as not to require the making or
    49  serving of papers other than said order to  effectuate  such  amendment,
    50  and  shall  further  provide  that the allegations in the answer of such
    51  additional lienor or other person shall, for the purposes of the action,
    52  be deemed denied by the other parties therein. The action  shall  be  so
    53  conducted  by  the  court as not to cause substantially any delay in the
    54  trial thereof.   The bringing in of  such  additional  lienor  or  other
    55  person  shall  be  without  prejudice to the proceedings had, and if the
    56  action be on the calendar of the court, same shall retain its  place  on

        A. 486                             15
     1  such  calendar  without the necessity of serving a new note of issue and
     2  new notices of trial.
     3    §  25.  Subdivision 3 of section 199-a of the labor law, as amended by
     4  chapter 564 of the laws of 2010, is amended to read as follows:
     5    3. Each employee and his or her  authorized  representative  shall  be
     6  notified  in  writing, of the termination of the commissioner's investi-
     7  gation of the employee's complaint and the result of such investigation,
     8  of any award and collection of back wages and civil  penalties,  and  of
     9  any intent to seek criminal penalties. In the event that criminal penal-
    10  ties  are  sought  the employee and his or her authorized representative
    11  shall be notified of the outcome of prosecution.
    12    § 26. Subdivision 2 of section 663 of the labor  law,  as  amended  by
    13  chapter 564 of the laws of 2010, is amended to read as follows:
    14    2.  By commissioner. On behalf of any employee paid less than the wage
    15  to which the employee is entitled under the provisions of this  article,
    16  the  commissioner may bring any legal action necessary, including admin-
    17  istrative action, to collect such  claim,  and  the  employer  shall  be
    18  required  to  pay  the  full amount of the underpayment, plus costs, and
    19  unless the employer proves a good faith basis to believe that its under-
    20  payment was in compliance with the law, an additional amount  as  liqui-
    21  dated damages. Liquidated damages shall be calculated by the commission-
    22  er  as  no  more  than  one  hundred  percent  of  the  total  amount of
    23  underpayments found to be due the employee. In any action brought by the
    24  commissioner in a court of competent  jurisdiction,  liquidated  damages
    25  shall  be calculated as an amount equal to one hundred percent of under-
    26  payments found to be due the employee.  Each  employee  or  his  or  her
    27  authorized representative shall be notified in writing of the outcome of
    28  any  legal  action  brought  on  the  employee's behalf pursuant to this
    29  section.
    30    § 27. Subdivision 5 of section 6201 of  the  civil  practice  law  and
    31  rules,  as  amended by chapter 860 of the laws of 1977 and as renumbered
    32  by chapter 618 of the laws of 1992, is amended and a new  subdivision  6
    33  is added to read as follows:
    34    5.  the  cause  of action is based on a judgment, decree or order of a
    35  court of the United States or of any other court which  is  entitled  to
    36  full  faith  and  credit in this state, or on a judgment which qualifies
    37  for recognition under the provisions of article 53[.] of  this  chapter;
    38  or
    39    6.  the  cause  of action is based on wage claims. "Wage claims," when
    40  used in this chapter, shall include any claims of violations of articles
    41  five, six, and nineteen of the labor law, section two hundred fifteen of
    42  the labor law, and the related regulations or wage orders promulgated by
    43  the commissioner of labor, including but not limited to  any  claims  of
    44  unpaid,  minimum, overtime, and spread-of-hours pay, unlawfully retained
    45  gratuities, unlawful deductions from wages, unpaid  commissions,  unpaid
    46  benefits  and wage supplements, and retaliation, and any claims pursuant
    47  to 18 U.S.C. § 1595, 29 U.S.C. § 201 et seq., and/or employment contract
    48  as well as the concomitant liquidated damages and  penalties  authorized
    49  pursuant  to the labor law, the Fair Labor Standards Act, or any employ-
    50  ment contract.
    51    § 28. Section 6210 of the civil practice law and rules,  as  added  by
    52  chapter 860 of the laws of 1977, is amended to read as follows:
    53    §  6210.  Order  of attachment on notice; temporary restraining order;
    54  contents. Upon a motion on notice for an order of attachment, the  court
    55  may,  without  notice  to  the  defendant, grant a temporary restraining
    56  order prohibiting the transfer of assets by a garnishee as  provided  in

        A. 486                             16
     1  subdivision  (b)  of section 6214. When attachment is sought pursuant to
     2  subdivision six of section  6201,  and  if  the  employer  contests  the
     3  motion,  the  court  shall  hold  a  hearing within ten days of when the
     4  employer's  response  to  plaintiffs'  motion for attachment is due. The
     5  contents of the order of attachment granted  pursuant  to  this  section
     6  shall be as provided in subdivision (a) of section 6211.
     7    §  29.  Subdivision  (b) of section 6211 of the civil practice law and
     8  rules, as amended by chapter 566 of the laws of 1985, is amended to read
     9  as follows:
    10    (b) Confirmation of order. Except where  an  order  of  attachment  is
    11  granted  on  the  ground  specified in subdivision one or six of section
    12  6201, an order of attachment granted without notice shall  provide  that
    13  within  a period not to exceed five days after levy, the plaintiff shall
    14  move, on such notice as the court shall direct  to  the  defendant,  the
    15  garnishee, if any, and the sheriff, for an order confirming the order of
    16  attachment.  Where  an  order of attachment without notice is granted on
    17  the ground specified in subdivision one or  six  of  section  6201,  the
    18  court shall direct that the statement required by section 6219 be served
    19  within  five days, that a copy thereof be served upon the plaintiff, and
    20  the plaintiff shall move  within  ten  days  after  levy  for  an  order
    21  confirming  the  order  of attachment. If the plaintiff upon such motion
    22  shall show that the statement has not been served and that the plaintiff
    23  will be unable to satisfy the requirement of subdivision (b) of  section
    24  6223 until the statement has been served, the court may grant one exten-
    25  sion of the time to move for confirmation for a period not to exceed ten
    26  days. If plaintiff fails to make such motion within the required period,
    27  the  order  of  attachment and any levy thereunder shall have no further
    28  effect and shall be vacated upon motion. Upon the motion to confirm, the
    29  provisions of subdivision (b) of section 6223 shall apply. An  order  of
    30  attachment  granted  without notice may provide that the sheriff refrain
    31  from taking any property levied upon into his  actual  custody,  pending
    32  further order of the court.
    33    §  30. Subdivisions (b) and (e) of rule 6212 of the civil practice law
    34  and rules, subdivision (b) as separately amended by chapters 15 and  860
    35  of  the  laws of 1977 and subdivision (e) as added by chapter 860 of the
    36  laws of 1977, are amended to read as follows:
    37    (b) Undertaking. [On] 1. Except where an order of attachment is sought
    38  on the ground specified in subdivision six of section 6201, on a  motion
    39  for  an order of attachment, the plaintiff shall give an undertaking, in
    40  a total amount fixed by the  court,  but  not  less  than  five  hundred
    41  dollars,  a  specified part thereof conditioned that the plaintiff shall
    42  pay to the defendant all costs and damages, including reasonable  attor-
    43  ney's  fees,  which  may be sustained by reason of the attachment if the
    44  defendant recovers judgment or if it is finally decided that the  plain-
    45  tiff  was not entitled to an attachment of the defendant's property, and
    46  the balance conditioned that the plaintiff shall pay to the sheriff  all
    47  of his allowable fees.
    48    2.  On  a  motion  for  an  attachment  pursuant to subdivision six of
    49  section 6201, the court shall order that the plaintiff give an  accessi-
    50  ble undertaking of no more than five hundred dollars, or in the alterna-
    51  tive,  may waive the undertaking altogether. The attorney for the plain-
    52  tiff shall not be liable to the sheriff for such fees. The surety on the
    53  undertaking shall not be discharged except upon notice to the sheriff.
    54    (e) Damages. [The] Except where an order of attachment  is  sought  on
    55  the  ground  specified in subdivision six of section 6201, the plaintiff
    56  shall be liable to the defendant for all costs  and  damages,  including

        A. 486                             17
     1  reasonable  attorney's  fees,  which  may  be sustained by reason of the
     2  attachment if the defendant recovers  judgment,  or  if  it  is  finally
     3  decided  that  the  plaintiff  was  not entitled to an attachment of the
     4  defendant's  property. Plaintiff's liability shall not be limited by the
     5  amount of the undertaking.
     6    § 31. Section 6223 of the civil practice law and rules, as amended  by
     7  chapter 860 of the laws of 1977, is amended to read as follows:
     8    §  6223.  Vacating  or  modifying  attachment. (a) Motion to vacate or
     9  modify.  Prior to the application of property or debt to  the  satisfac-
    10  tion of a judgment, the defendant, the garnishee or any person having an
    11  interest  in  the property or debt may move, on notice to each party and
    12  the sheriff, for an order vacating or modifying the order of attachment.
    13  Upon the motion, the court may give the plaintiff a reasonable  opportu-
    14  nity  to  correct  any defect. [If] Except as provided under subdivision
    15  (b), if, after the defendant has  appeared  in  the  action,  the  court
    16  determines  that  the  attachment  is unnecessary to the security of the
    17  plaintiff, it shall vacate the order of attachment.  Such a motion shall
    18  not of itself constitute an appearance in the action.
    19    (b) Burden of proof. [Upon] Except where an  order  of  attachment  is
    20  granted  pursuant  to  subdivision six of section 6201, upon a motion to
    21  vacate or modify an order of attachment the  plaintiff  shall  have  the
    22  burden  of  establishing  the  grounds  for the attachment, the need for
    23  continuing the levy and the probability that  he  will  succeed  on  the
    24  merits. Upon a motion to vacate or modify an order of attachment granted
    25  pursuant  to  subdivision  six of section 6201, the defendant shall have
    26  the burden to demonstrate that the  attachment  is  unnecessary  to  the
    27  security  of  the plaintiff, in order to vacate or modify the attachment
    28  order.
    29    § 32. Paragraph (b) of section 624 of the business corporation law, as
    30  amended by chapter 449 of the laws  of  1997,  is  amended  to  read  as
    31  follows:
    32    (b) Any person who shall have been a shareholder of record of a corpo-
    33  ration,  or  who  is  or shall have been a laborer, servant or employee,
    34  upon at least five days' written demand shall have the right to  examine
    35  in  person  or  by  agent  or attorney, during usual business hours, its
    36  minutes of the proceedings of its shareholders and record of  sharehold-
    37  ers and to make extracts therefrom for any purpose reasonably related to
    38  such  person's  interest as a shareholder, laborer, servant or employee.
    39  Holders of voting trust certificates representing shares of  the  corpo-
    40  ration  shall  be  regarded  as  shareholders  for  the  purpose of this
    41  section.  Any such agent or attorney shall be authorized  in  a  writing
    42  that  satisfies  the  requirements  of  a writing under paragraph (b) of
    43  section 609 (Proxies). A corporation requested  to  provide  information
    44  pursuant  to  this  paragraph  shall  make available such information in
    45  written form and in any other format in which such information is  main-
    46  tained  by  the  corporation  and  shall not be required to provide such
    47  information in any other format. If a  request  made  pursuant  to  this
    48  paragraph includes a request to furnish information regarding beneficial
    49  owners,  the  corporation  shall  make available such information in its
    50  possession regarding beneficial owners as is provided to the corporation
    51  by a registered broker or dealer or a bank, association or other  entity
    52  that  exercises  fiduciary  powers  in connection with the forwarding of
    53  information to such owners. The corporation shall  not  be  required  to
    54  obtain information about beneficial owners not in its possession.

        A. 486                             18
     1    §  33.  Section  630 of the business corporation law, paragraph (a) as
     2  amended by chapter 5 of the laws of 2016, paragraph (c)  as  amended  by
     3  chapter 746 of the laws of 1963, is amended to read as follows:
     4  § 630. Liability  of shareholders for wages due to laborers, servants or
     5           employees.
     6    (a) The ten largest shareholders, as determined by the fair  value  of
     7  their beneficial interest as of the beginning of the period during which
     8  the  unpaid services referred to in this section are performed, of every
     9  domestic corporation or of any  foreign  corporation,  when  the  unpaid
    10  services were performed in the state, no shares of which are listed on a
    11  national  securities exchange or regularly quoted in an over-the-counter
    12  market by one or more members of a national or an affiliated  securities
    13  association,  shall  jointly  and severally be personally liable for all
    14  debts, wages or salaries due and owing to any of its laborers,  servants
    15  or  employees other than contractors, for services performed by them for
    16  such corporation. [Before such laborer, servant or employee shall charge
    17  such shareholder for such services, he shall give notice in  writing  to
    18  such  shareholder that he intends to hold him liable under this section.
    19  Such notice shall be given within one  hundred  and  eighty  days  after
    20  termination  of  such  services, except that if, within such period, the
    21  laborer, servant or employee demands an examination  of  the  record  of
    22  shareholders  under  paragraph  (b)  of  section 624 (Books and records;
    23  right of inspection, prima facie evidence) of this article, such  notice
    24  may  be  given within sixty days after he has been given the opportunity
    25  to examine the record of shareholders. An action to enforce such liabil-
    26  ity shall be commenced  within  ninety  days  after  the  return  of  an
    27  execution  unsatisfied against the corporation upon a judgment recovered
    28  against it for such services.] The provisions of  this  paragraph  shall
    29  not  apply  to  an investment company registered as such under an act of
    30  congress entitled "Investment Company Act of 1940."
    31    (b) For the purposes of this section, wages or salaries shall mean all
    32  compensation and benefits payable by an employer to or for  the  account
    33  of  the employee for personal services rendered by such employee includ-
    34  ing any concomitant liquidated damages, penalties, interest,  attorney's
    35  fees  or costs.   These shall specifically include but not be limited to
    36  salaries,  overtime,  vacation,  holiday  and  severance  pay;  employer
    37  contributions  to or payments of insurance or welfare benefits; employer
    38  contributions to pension or annuity funds; and any other moneys properly
    39  due or payable for services rendered by such employee.
    40    (c) A shareholder who has paid more than his pro rata share under this
    41  section shall be entitled to contribution pro rata from the other share-
    42  holders liable under this section with respect to the  excess  so  paid,
    43  over and above his pro rata share, and may sue them jointly or severally
    44  or  any number of them to recover the amount due from them.  Such recov-
    45  ery may be had in a separate action. As used  in  this  paragraph,  "pro
    46  rata"  means in proportion to beneficial share interest. Before a share-
    47  holder may claim contribution from other shareholders under  this  para-
    48  graph, he shall[, unless they have been given notice by a laborer, serv-
    49  ant  or  employee under paragraph (a),] give them notice in writing that
    50  he intends to hold them so liable to him. Such notice shall be given  by
    51  him  within twenty days after the date that [notice was given to him by]
    52  he became aware that a laborer, servant or employee may seek to hold him
    53  liable under paragraph (a).
    54    § 34. Subdivision (c) of section 609 of the limited liability  company
    55  law,  as added by chapter 537 of the laws of 2014, is amended to read as
    56  follows:

        A. 486                             19
     1    (c) Notwithstanding the provisions of subdivisions (a) and (b) of this
     2  section, the ten members with the largest percentage ownership interest,
     3  as determined as of the beginning of the period during which the  unpaid
     4  services  referred  to  in  this section are performed, of every limited
     5  liability  company, shall jointly and severally be personally liable for
     6  all debts, wages or salaries due and owing to any of its laborers, serv-
     7  ants or employees, for services  performed  by  them  for  such  limited
     8  liability  company.  [Before  such  laborer,  servant  or employee shall
     9  charge such member for such services, he or she  shall  give  notice  in
    10  writing to such member that he or she intends to hold such member liable
    11  under this section. Such notice shall be given within one hundred eighty
    12  days  after  termination  of  such  services.  An action to enforce such
    13  liability shall be commenced within ninety days after the return  of  an
    14  execution unsatisfied against the limited liability company upon a judg-
    15  ment recovered against it for such services.] A member who has paid more
    16  than  his  or her pro rata share under this section shall be entitled to
    17  contribution pro rata from the other members liable under  this  section
    18  with  respect  to the excess so paid, over and above his or her pro rata
    19  share, and may sue them jointly or severally or any number  of  them  to
    20  recover the amount due from them. Such recovery may be had in a separate
    21  action.  As  used in this subdivision, "pro rata" means in proportion to
    22  percentage ownership interest. Before a member  may  claim  contribution
    23  from  other members under this section, he or she shall give them notice
    24  in writing that he or she intends to hold them so liable to him or her.
    25    § 35. Section 1102 of the limited liability company law is amended  by
    26  adding a new subdivision (e) to read as follows:
    27    (e) Any person who is or shall have been a laborer, servant or employ-
    28  ee  of  a  limited  liability  company, upon at least five days' written
    29  demand shall have the right to examine in person or by agent  or  attor-
    30  ney,  during usual business hours, records described in paragraph two of
    31  subdivision (a) of this section throughout the  period  of  time  during
    32  which such laborer, servant or employee provided services to such compa-
    33  ny.  A  company  requested to provide information pursuant to this para-
    34  graph shall make available such records in written form and in any other
    35  format in which such information is maintained by the company and  shall
    36  not  be  required to provide such information in any other format.  Upon
    37  refusal by the company or by an officer  or  agent  of  the  company  to
    38  permit  an  inspection  of  the records described in this paragraph, the
    39  person making the demand for inspection may apply to the  supreme  court
    40  in  the  judicial  district  where the office of the company is located,
    41  upon such notice as the court may direct, for  an  order  directing  the
    42  company,  its  members or managers to show cause why an order should not
    43  be granted permitting such inspection by the applicant.  Upon the return
    44  day of the order to show cause, the court shall hear the parties summar-
    45  ily, by affidavit or otherwise, and if it appears that the applicant  is
    46  qualified  and  entitled  to  such  inspection, the court shall grant an
    47  order compelling such inspection and awarding such further relief as  to
    48  the  court  may  seem  just  and proper. If the applicant is found to be
    49  qualified and entitled to such inspection, the  company  shall  pay  all
    50  reasonable  attorney's  fees  and costs of said applicant related to the
    51  demand for inspection of the records.
    52    § 36. This act shall take effect on the thirtieth day after  it  shall
    53  have  become a law. The procedures and rights created in this act may be
    54  used by employees, laborers or servants in connection  with  claims  for
    55  liabilities that arose prior to the effective date.
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