Bill Text: NY S06727 | 2019-2020 | General Assembly | Amended

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

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2020-01-28 - referred to judiciary [S06727 Detail]

Download: New_York-2019-S06727-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         6727--B
            Cal. No. 150

                               2019-2020 Regular Sessions

                    IN SENATE

                                   September 18, 2019
                                       ___________

        Introduced  by  Sen.  THOMAS -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules  --  recommitted  to
          the Committee on Judiciary in accordance with Senate Rule 6, sec. 8 --
          committee  discharged,  bill amended, ordered reprinted as amended and
          recommitted to said committee -- reported favorably from said  commit-
          tee,  ordered  to first and second report, ordered to a third reading,
          amended and ordered reprinted, retaining its place  in  the  order  of
          third reading

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

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  The  general  obligations  law is amended by adding a new
     2  section 11-108 to read as follows:
     3    § 11-108. Liability  of  payroll  processing  company.    1.  For  the
     4  purposes of this section, "payroll processing company" means a person or
     5  business  entity  under  contract  to  an employer that: (a) calculates,
     6  processes and produces wage payments to the employer's  employees  under
     7  such  employer's  federal  employer identification number; (b) withholds
     8  and remits applicable taxes to government agencies using the  employer's
     9  federal  employment  identification number; (c) issues federal and state
    10  income tax forms to  the  employer's  employees  using  such  employer's
    11  federal employer identification number; and (d) conditions wage payments
    12  to  the  employer's  employees on the advance receipt of funds from such
    13  employer to fully cover such  wage  payments.  A  person  acting  as  an
    14  employer  under 26 U.S.C. 3401(d)(1) that otherwise meets the definition
    15  of a payroll processing company shall not be considered a payroll  proc-
    16  essing  company if the person acting as an employer and the employee are
    17  subject  to  a  collective  bargaining  agreement  and  such  collective
    18  bargaining agreement expressly provides for the recovery of unpaid, lost
    19  or stolen wages.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13797-10-0
        S. 6727--B                          2

     1    2.  Notwithstanding  any  other  provision  of  law to the contrary, a
     2  payroll processing company that intentionally  and  without  good  cause
     3  prevents  the  remittance  of  taxes or payment of wages pursuant to the
     4  contract with the employer shall be liable to an employee of the employ-
     5  er that failed to receive an owed payment within one business day of the
     6  date  such payment was expected for an amount up to three times the owed
     7  payment of wages and applicable taxes. Good cause may include, but shall
     8  not be limited to, the failure of  an  employer  to  provide  sufficient
     9  funds  by  the  applicable deadline, reasonable efforts to verify poten-
    10  tially fraudulent activity, failure of an employer to provide the neces-
    11  sary payroll input, observance of relevant state  and  federal  laws  or
    12  regulations,  and other factors outside the control of the payroll proc-
    13  essing company; provided a payroll processing  company  shall  not  have
    14  good cause under this section if such payroll processing company acts or
    15  fails to act in violation of applicable state and federal laws and regu-
    16  lations.
    17    3. Liability under this section is in addition to any other applicable
    18  penalties and causes of action.
    19    4.  An  action to recover damages under this section may be maintained
    20  as a class action, notwithstanding subdivision b of section nine hundred
    21  one of the civil practice law and rules.
    22    § 2. This act shall take effect immediately.