senate Bill S6658

Relates to securing payment of wages for work already performed; creates a wage lien

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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  • 24 / Feb / 2014
    • REFERRED TO JUDICIARY

Summary

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.

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Bill Details

See Assembly Version of this Bill:
A8045
Versions:
S6658
Legislative Cycle:
2013-2014
Current Committee:
Senate Judiciary
Law Section:
Lien Law
Laws Affected:
Amd §2, add Art 2-A §§39-aa - 39-hh, Lien L; amd §§6201, 6210, 6211, 6223 & R6212, CPLR; amd §§624 & 630, BC L; amd §§609 & 1102, Lim Lil L

Sponsor Memo

BILL NUMBER:S6658

TITLE OF BILL: An act to amend the lien law, in relation to securing
payment of wages for work already performed; to amend the civil
practice law and rules, in relation to grounds for attachment; to
amend the business corporation law, in relation to streamlining
procedures where employees may hold shareholders of non-publicly
traded corporations personally liable for wage theft; and to amend the
limited 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

PURPOSE:

This bill amends four sections of the law (Lien Law; Attachment under
the Civil Practice Law and Rules; the Business Corporations Law; and
the Limited Liability Company Law) to strengthen current laws to
increase the likelihood that victims of "wage theft" will be able to
secure payment from their employers of unpaid wages for work already
performed.

SUMMARY OF PROVISIONS:

Sections one through six amend the lien law to expand the mechanics'
lien provisions and create a "wage lien," which would provide a lien
remedy for all employees. Currently only home improvement workers are
protected under the mechanics' lien provision.

Sections seven through eleven amend the civil practice law and rules
to create a new ground for attachment, allowing victims of wage theft
to seek attachment of the employers' assets during the pendency of a
court action.

Sections twelve and thirteen amend the business corporation law to
streamline the procedures pursuant to pendency of a court action.
Which employees can hold personally liable the largest shareholders of
non-publicly traded corporations for wage theft.

Sections fourteen and fifteen amend the limited liability company law
create a right of victims of wage theft to hold the ten members with
the largest ownership interest in the company personally liable for
wage theft.

JUSTIFICATION:

This bill is needed to increase the likelihood that victims of wage
theft will be able to secure payment of wages owed to them by their
employers. In too many instances, exploitative employers hide their
assets or dissolve their business to avoid paying wages they owe to
their employees. By the time workers have filed a lawsuit and are
awarded a judgment, there are few, if any, assets to be found. By
increasing the ability for workers to secure, and collect wages for
work already performed, this bill strengthens the existing labor law
provisions and the enforcement of such laws.

PRIOR LEGISLATIVE HISTORY:


New bill.

EFFECTIVE DATE:

This act will take effect thirty days after it becomes law.

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

                                  6658

                            I N  S E N A T E

                            February 24, 2014
                               ___________

Introduced  by Sens. PERALTA, HOYLMAN -- read twice and ordered printed,
  and when printed to be committed to the Committee on Judiciary

AN ACT to amend the lien law, in relation to securing payment  of  wages
  for work already performed; to amend the civil practice law and rules,
  in  relation  to  grounds for attachment; to amend the business corpo-
  ration law, in relation to streamlining procedures where employees may
  hold  shareholders  of  non-publicly  traded  corporations  personally
  liable for wage theft; and to amend the limited 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:

  Section 1. Section 2 of the lien law is amended  by  adding  four  new
subdivisions 21, 22, 23, and 24 to read as follows:
  21.  WAGE  CLAIMS.  THE TERM "WAGE CLAIMS," WHEN USED IN THIS CHAPTER,
SHALL INCLUDE ANY CLAIMS OF VIOLATIONS UNDER  ARTICLES  FIVE,  SIX,  AND
NINETEEN  OF  THE  LABOR LAW, AND THE RELATED REGULATIONS OR WAGE ORDERS
PROMULGATED BY THE COMMISSIONER OF LABOR, INCLUDING BUT NOT  LIMITED  TO
ANY CLAIMS OF UNPAID, MINIMUM, OVERTIME, AND SPREAD-OF-HOURS PAY, UNLAW-
FULLY  RETAINED  GRATUITIES,  UNLAWFUL  DEDUCTIONS  FROM  WAGES,  UNPAID
COMMISSIONS, AND UNPAID BENEFITS AND WAGE SUPPLEMENTS,  AND  ANY  CLAIMS
PURSUANT  TO  18 U.S.C. S 1595, 29 U.S.C. S 206, 29 U.S.C. S 207, AND/OR
ANY EMPLOYMENT CONTRACT, AS WELL AS THE CONCOMITANT  LIQUIDATED  DAMAGES
AND PENALTIES AUTHORIZED PURSUANT TO THE LABOR LAW, THE FAIR LABOR STAN-
DARDS ACT, OR ANY EMPLOYMENT CONTRACT.
  22.  EMPLOYER. THE TERM "EMPLOYER," WHEN USED IN ARTICLE TWO-A OF THIS
CHAPTER, SHALL HAVE THE SAME MEANING AS "EMPLOYER" PURSUANT TO THE LABOR
LAW OR THE FAIR LABOR STANDARDS ACT, AS APPLICABLE.
  23. EMPLOYEE. THE TERM "EMPLOYEE," WHEN USED IN ARTICLE TWO-A OF  THIS
CHAPTER, SHALL HAVE THE SAME MEANING AS "EMPLOYEE" PURSUANT TO THE LABOR
LAW OR THE FAIR LABOR STANDARDS ACT, AS APPLICABLE.
  24.  PERSONAL  PROPERTY.  THE  TERM  "PERSONAL PROPERTY," WHEN USED IN
ARTICLE TWO-A OF THIS CHAPTER, SHALL HAVE THE SAME MEANING AS  "PERSONAL

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11384-02-3

S. 6658                             2

PROPERTY"  PURSUANT  TO  SECTION THIRTY-NINE OF THE GENERAL CONSTRUCTION
LAW, EXCEPT WHERE EXEMPT BY FEDERAL LAW.
  S  2.  The  lien law is amended by adding a new article 2-A to read as
follows:
                               ARTICLE 2-A
                                WAGE LIEN
SECTION 39-AA. WAGE LIEN.
        39-BB. ESTABLISHING A LIEN FOR WAGE CLAIMS.
        39-CC. ENFORCEMENT OF A LIEN FOR WAGE CLAIMS ON REAL PROPERTY.
        39-DD. ENFORCEMENT OF A LIEN FOR WAGE CLAIMS ON PERSONAL PROPER-
                 TY.
        39-EE. REGULATIONS.
        39-FF. RIGHTS.
        39-GG. FORCE AND EFFECT.
        39-HH. OPERATION.
  S 39-AA. WAGE LIEN.  AN EMPLOYEE OR THE COMMISSIONER OF LABOR SHALL BE
ENTITLED TO A LIEN UPON ALL PROPERTY OF THE EMPLOYER, REAL OR  PERSONAL,
LOCATED  IN THIS STATE FOR THE FULL AMOUNT OF THE WAGE CLAIMS, INCLUDING
THE PENALTIES AUTHORIZED PURSUANT TO THE LABOR LAW, THE FAIR LABOR STAN-
DARDS ACT, OR THE CONTRACT IN ISSUE.  SUCH  LIEN  SHALL  EXTEND  TO  THE
EMPLOYER-OWNER'S RIGHT, TITLE OR INTEREST IN THE REAL AND PERSONAL PROP-
ERTY,  EXISTING  AT THE TIME OF FILING THE NOTICE OF LIEN, OR THEREAFTER
ACQUIRED, AND SHALL HAVE THE SAME PRIORITY AS A MECHANIC'S LIEN PURSUANT
TO SECTION THIRTEEN OF THIS CHAPTER.
  S 39-BB. ESTABLISHING A LIEN FOR WAGE CLAIMS. 1. TO ESTABLISH  A  LIEN
FOR WAGE CLAIMS UNDER THIS ARTICLE, AN EMPLOYEE SHALL:
  (A) PROVIDE AND SERVE WRITTEN NOTICE TO AN EMPLOYER IN ACCORDANCE WITH
THE  REQUIREMENTS  SET FORTH IN SECTIONS NINE AND ELEVEN OF THIS CHAPTER
TO PROVIDE THE EMPLOYER WITH ADEQUATE NOTICE OF THE  WAGES  CLAIMED  AND
THE PROPERTY AGAINST WHICH THE LIEN FOR WAGE CLAIMS IS SOUGHT;
  (B)  SERVE  WRITTEN  NOTICE  TO  AN  EMPLOYER  AT  ANY TIME DURING THE
PROGRESS OF THE WORK, OR WITHIN SIX YEARS AFTER THE FINAL PERFORMANCE OF
THE WORK, AND OTHERWISE IN ACCORDANCE WITH THE REQUIREMENTS SET FORTH IN
SECTION TEN OF THIS CHAPTER.
  2. IF PAYMENT IS MADE FOR THE AMOUNT OF  WAGE  CLAIMS  STATED  IN  THE
NOTICE  OF  WAGE  LIEN,  THE  RECORDED LIEN FOR THE WAGE CLAIMS SHALL BE
RELEASED AS SET FORTH IN ARTICLE TWO OF THIS CHAPTER.
  3. A LIEN FOR WAGE CLAIMS SHALL BE A LIEN FOR A PERIOD  OF  TEN  YEARS
AFTER THE EMPLOYEE HAS FILED THE NOTICE OF LIEN, UNLESS WITHIN THAT TIME
AN  ACTION  IS  COMMENCED  TO  FORECLOSE  THE  LIEN, AND A NOTICE OF THE
PENDENCY OF SUCH ACTION IS FILED. NOTWITHSTANDING THIS PROVISION, A LIEN
FOR WAGE CLAIMS SHALL HAVE THE SAME FORCE AND EFFECT OF A LIEN  PURSUANT
TO ARTICLE TWO OF THIS CHAPTER.
  S 39-CC. ENFORCEMENT OF A LIEN FOR WAGE CLAIMS ON REAL PROPERTY.  1. A
LIEN  FOR  WAGE  CLAIMS  ON  REAL  PROPERTY  MAY BE ENFORCED IN NEW YORK
SUPREME COURT, COUNTY COURT, OR IN  A  COURT  WITH  JURISDICTION  IN  AN
ACTION FOUNDED ON A CONTRACT FOR A SUM OF MONEY EQUIVALENT TO THE AMOUNT
OF  SUCH  DEBT, IN ACCORDANCE WITH THE REQUIREMENTS SET FORTH IN SECTION
FORTY-ONE OF THIS CHAPTER. IF THE CONTRACT BETWEEN EMPLOYER AND EMPLOYEE
VIOLATES THE MINIMUM PROTECTIONS OF THE LABOR LAW, THE  NOTICE  OF  LIEN
MAY  STATE THE LEGAL VALUE OF THE LABOR PERFORMED, AND A COURT MAY LATER
DETERMINE UPON TRIAL A HIGHER VALUE THAN THAT STATED BY CLAIMANT.
  2. THE EMPLOYEE OR PERSON WHO FILES  A  WAGE  LIEN  WHO  RECOVERS  ANY
WAGES, DAMAGES, AND PENALTIES PURSUANT TO SUCH LIEN SHALL BE ENTITLED TO
ALSO RECOVER REASONABLE ATTORNEY'S FEES AND COSTS EXPENDED IN ANY ACTION
OR PROCEEDING TO FILE AND ENFORCE THE WAGE LIEN.

S. 6658                             3

  3.  WHERE IN ANY ACTION OR PROCEEDING TO ENFORCE A WAGE LIEN THE COURT
SHALL HAVE DECLARED SAID LIEN TO BE VOID ON ACCOUNT OF WILLFUL  EXAGGER-
ATION  BY  THE  PERSON  FILING  SUCH NOTICE OF LIEN, THE COURT MAY AWARD
COURT COSTS AND REASONABLE ATTORNEY'S FEES TO THE EMPLOYER.
  4.  ANY NUMBER OF ACTIONS OR PROCEEDINGS TO ENFORCE WAGE LIENS AGAINST
THE SAME EMPLOYER MAY BE JOINED IN A SINGLE PROCEEDING UPON THE  COURT'S
OWN MOTION OR UPON THE APPLICATION OF ANY PARTY.
  S 39-DD. ENFORCEMENT OF A LIEN FOR WAGE CLAIMS ON PERSONAL PROPERTY. A
LIEN  FOR  WAGE  CLAIMS ON PERSONAL PROPERTY MAY BE ENFORCED IN THE SAME
MANNER AS IS REQUIRED TO PERFECT A SECURITY INTEREST UNDER PARAGRAPH TWO
OF SUBSECTION (A) OF SECTION 9-501 ET SEQ.  OF  THE  UNIFORM  COMMERCIAL
CODE.  SUCH  NOTICE  OF  LIEN SHALL BE MADE TO THE SECRETARY OF STATE IN
WRITING, SPECIFYING THE PERSON AGAINST  WHOM  THE  CLAIM  IS  MADE,  THE
AMOUNT OF THE SAME AND A DESCRIPTION OF THE PROPERTY UPON WHICH THE LIEN
IS  CLAIMED.  THE SALE OF THE PROPERTY MAY BE ENFORCED UNDER SECTION TWO
HUNDRED OF THIS CHAPTER. SUCH INTEREST SHALL TERMINATE IN FIVE YEARS  IN
ACCORDANCE WITH SECTION 9-515 OF THE UNIFORM COMMERCIAL CODE.
  S  39-EE. REGULATIONS. THE COMMISSIONER OF THE DEPARTMENT OF LABOR MAY
SEEK TO ESTABLISH A LIEN FOR WAGE CLAIMS ON BEHALF OF  AN  EMPLOYEE  AND
ADOPT REGULATIONS TO IMPLEMENT THE PROVISIONS OF THIS ARTICLE.
  S  39-FF.  RIGHTS.  THIS  ARTICLE  MAY  NOT BE CONSTRUED TO PREVENT AN
EMPLOYEE FROM EXERCISING ANY RIGHT OR SEEKING ANY REMEDY  TO  WHICH  THE
EMPLOYEE MAY OTHERWISE BE ENTITLED.
  S  39-GG.  FORCE AND EFFECT. A WAGE LIEN SHALL HAVE THE SAME FORCE AND
EFFECT AS A MECHANIC'S LIEN PURSUANT TO SUBDIVISION ONE OF SECTION THIR-
TEEN OF THIS CHAPTER, AND SHALL HAVE PRIORITY OVER A  CONVEYANCE,  MORT-
GAGE, JUDGMENT, OR OTHER CLAIM AGAINST SUCH PROPERTY NOT RECORDED, DOCK-
ETED, OR FILED AT THE TIME OF THE FILING OF THE NOTICE OF THE LIEN.
  S  39-HH.  OPERATION.  WHERE APPLICABLE, THE OPERATION OF THIS ARTICLE
MAY BE CONSTRUED WITH REFERENCE TO THE REQUIREMENTS SET FORTH IN ARTICLE
TWO OF THIS CHAPTER.
  S 3. Subdivision 5 of section 6201  of  the  civil  practice  law  and
rules,  as  amended by chapter 860 of the laws of 1977 and as renumbered
by chapter 618 of the laws of 1992, is amended and a new  subdivision  6
is added to read as follows:
  5.  the  cause  of action is based on a judgment, decree or order of a
court of the United States or of any other court which  is  entitled  to
full  faith  and  credit in this state, or on a judgment which qualifies
for recognition under the provisions of article 53[.] OF  THIS  CHAPTER;
OR
  6.  THE  CAUSE  OF ACTION IS BASED ON WAGE CLAIMS. "WAGE CLAIMS," WHEN
USED IN THIS CHAPTER, SHALL INCLUDE ANY CLAIMS OF VIOLATIONS OF ARTICLES
FIVE, SIX, AND NINETEEN OF THE LABOR LAW, SECTION TWO HUNDRED FIFTEEN OF
THE LABOR LAW, AND THE RELATED REGULATIONS OR WAGE ORDERS PROMULGATED BY
THE COMMISSIONER OF LABOR, INCLUDING BUT NOT LIMITED TO  ANY  CLAIMS  OF
UNPAID,  MINIMUM, OVERTIME, AND SPREAD-OF-HOURS PAY, UNLAWFULLY RETAINED
GRATUITIES, UNLAWFUL DEDUCTIONS FROM WAGES, UNPAID  COMMISSIONS,  UNPAID
BENEFITS  AND WAGE SUPPLEMENTS, AND RETALIATION, AND ANY CLAIMS PURSUANT
TO 18 U.S.C. S 1595, 29 U.S.C. S 201 ET SEQ., AND/OR EMPLOYMENT CONTRACT
AS WELL AS THE CONCOMITANT LIQUIDATED DAMAGES AND  PENALTIES  AUTHORIZED
PURSUANT  TO THE LABOR LAW, THE FAIR LABOR STANDARDS ACT, OR ANY EMPLOY-
MENT CONTRACT.
  S 4. Section 6210 of the civil practice law and  rules,  as  added  by
chapter 860 of the laws of 1977, is amended to read as follows:
  S  6210.  Order  of attachment on notice; temporary restraining order;
contents. Upon a motion on notice for an order of attachment, the  court

S. 6658                             4

may,  without  notice  to  the  defendant, grant a temporary restraining
order prohibiting the transfer of assets by a garnishee as  provided  in
subdivision  (b)  of section 6214. WHEN ATTACHMENT IS SOUGHT PURSUANT TO
SUBDIVISION  SIX  OF  SECTION  6201,  AND  IF  THE EMPLOYER CONTESTS THE
MOTION, THE COURT SHALL HOLD A HEARING  WITHIN  TEN  DAYS  OF  WHEN  THE
EMPLOYER'S  RESPONSE  TO  PLAINTIFFS'  MOTION FOR ATTACHMENT IS DUE. The
contents of the order of attachment granted  pursuant  to  this  section
shall be as provided in subdivision (a) of section 6211.
  S  5.  Subdivision  (b)  of section 6211 of the civil practice law and
rules, as amended by chapter 566 of the laws of 1985, is amended to read
as follows:
  (b) Confirmation of order. Except where  an  order  of  attachment  is
granted  on  the  ground specified in [subdivision] SUBDIVISIONS one AND
SIX of section 6201, an order of attachment granted without notice shall
provide that within a period not to exceed five  days  after  levy,  the
plaintiff  shall  move,  on such notice as the court shall direct to the
defendant, the garnishee, if any, and the sheriff, for an order confirm-
ing the order of attachment. Where an order of attachment without notice
is granted on the ground specified in [subdivision] SUBDIVISIONS one AND
SIX of section 6201, the court shall direct that the statement  required
by  section  6219  be  served  within  five days, that a copy thereof be
served upon the plaintiff, and the plaintiff shall move within ten  days
after  levy  for  an  order  confirming  the order of attachment. If the
plaintiff upon such motion shall show that the statement  has  not  been
served  and that the plaintiff will be unable to satisfy the requirement
of subdivision (b) of section 6223 until the statement has been  served,
the  court  may grant one extension of the time to move for confirmation
for a period not to exceed ten days. If plaintiff  fails  to  make  such
motion  within the required period, the order of attachment and any levy
thereunder shall have no  further  effect  and  shall  be  vacated  upon
motion. Upon the motion to confirm, the provisions of subdivision (b) of
section  6223 shall apply. An order of attachment granted without notice
may provide that the sheriff refrain from  taking  any  property  levied
upon into his actual custody, pending further order of the court.
  S  6.  Rule  6212  of  the civil practice law and rules, as amended by
chapter 860 of the laws of 1977, subdivision (b) as  separately  amended
by  chapters  15  and  860  of  the  laws of 1977, is amended to read as
follows:
  Rule 6212. Motion papers; undertaking; filing; demand; damages.    (a)
Affidavit;  other papers. On a motion for an order of attachment, or for
an order to confirm an order of attachment, the plaintiff shall show, by
affidavit and such other written evidence  as  may  be  submitted,  that
there  is a cause of action, that it is probable that the plaintiff will
succeed on the merits, that one or more grounds for attachment  provided
in  section  6201 exist, and that the amount demanded from the defendant
exceeds all counterclaims known to the plaintiff.   WHEN  ATTACHMENT  IS
SOUGHT  PURSUANT  TO SUBDIVISION SIX OF SECTION 6201, ONCE THE PLAINTIFF
HAS MADE THE INITIAL SHOWING, THE COURT SHALL GRANT AN ATTACHMENT UNLESS
THE DEFENDANT CAN SHOW THAT AN ATTACHMENT WOULD BE UNJUST.
  (b) Undertaking. [On] 1. EXCEPT WHERE AN ORDER OF ATTACHMENT IS SOUGHT
ON THE GROUND SPECIFIED IN SUBDIVISION SIX OF SECTION 6201, ON a  motion
for  an order of attachment, the plaintiff shall give an undertaking, in
a total amount fixed by the  court,  but  not  less  than  five  hundred
dollars,  a  specified part thereof conditioned that the plaintiff shall
pay to the defendant all costs and damages, including reasonable  attor-
ney's  fees,  which  may be sustained by reason of the attachment if the

S. 6658                             5

defendant recovers judgment or if it is finally decided that the  plain-
tiff  was not entitled to an attachment of the defendant's property, and
the balance conditioned that the plaintiff shall pay to the sheriff  all
of his allowable fees.
  2.  ON  A  MOTION  FOR  AN  ATTACHMENT  PURSUANT TO SUBDIVISION SIX OF
SECTION 6201, THE COURT SHALL ORDER THAT THE PLAINTIFF GIVE AN  ACCESSI-
BLE UNDERTAKING OF NO MORE THAN FIVE HUNDRED DOLLARS, OR IN THE ALTERNA-
TIVE,  MAY WAIVE THE UNDERTAKING ALTOGETHER. The attorney for the plain-
tiff shall not be liable to the sheriff for such fees. The surety on the
undertaking shall not be discharged except upon notice to the sheriff.
  (c) Filing. Within ten days after the granting of an order of  attach-
ment,  the  plaintiff  shall  file it and the affidavit and other papers
upon which it was based and the summons and  complaint  in  the  action.
Unless the time for filing has been extended, the order shall be invalid
if  not  so filed, except that a person upon whom it is served shall not
be liable for acting upon it as if it were valid  without  knowledge  of
the invalidity.
  (d)  Demand  for  papers.  At  any time after property has been levied
upon, the defendant may serve upon the plaintiff a written  demand  that
the  papers  upon which the order of attachment was granted and the levy
made be served upon him. Not more than one  day  after  service  of  the
demand,  the  plaintiff  shall cause the papers demanded to be served at
the address specified in the demand. A  demand  under  this  subdivision
shall not of itself constitute an appearance in the action.
  (e)  Damages.  [The]  EXCEPT WHERE AN ORDER OF ATTACHMENT IS SOUGHT ON
THE GROUND SPECIFIED IN SUBDIVISION SIX OF SECTION 6201,  THE  plaintiff
shall  be  liable  to the defendant for all costs and damages, including
reasonable attorney's fees, which may be  sustained  by  reason  of  the
attachment  if  the  defendant  recovers  judgment,  or if it is finally
decided that the plaintiff was not entitled  to  an  attachment  of  the
defendant's  property. Plaintiff's liability shall not be limited by the
amount of the undertaking.
  S 7. Section 6223 of the civil practice law and rules, as  amended  by
chapter 860 of the laws of 1977, is amended to read as follows:
  S  6223.  Vacating  or  modifying  attachment. (a) Motion to vacate or
modify.  Prior to the application of property or debt to  the  satisfac-
tion of a judgment, the defendant, the garnishee or any person having an
interest  in  the property or debt may move, on notice to each party and
the sheriff, for an order vacating or modifying the order of attachment.
Upon the motion, the court may give the plaintiff a reasonable  opportu-
nity  to  correct  any defect. [If] EXCEPT AS PROVIDED UNDER SUBDIVISION
(B), IF, after the defendant has  appeared  in  the  action,  the  court
determines  that  the  attachment  is unnecessary to the security of the
plaintiff, it shall vacate the order of attachment.  Such a motion shall
not of itself constitute an appearance in the action.
  (b) Burden of proof. [Upon] EXCEPT WHERE AN  ORDER  OF  ATTACHMENT  IS
GRANTED  PURSUANT  TO  SUBDIVISION SIX OF SECTION 6201, UPON a motion to
vacate or modify an order of attachment the  plaintiff  shall  have  the
burden  of  establishing  the  grounds  for the attachment, the need for
continuing the levy and the probability that  he  will  succeed  on  the
merits. UPON A MOTION TO VACATE OR MODIFY AN ORDER OF ATTACHMENT GRANTED
PURSUANT  TO  SUBDIVISION  SIX OF SECTION 6201, THE DEFENDANT SHALL HAVE
THE BURDEN TO DEMONSTRATE EXTRAORDINARY CIRCUMSTANCES IN ORDER TO VACATE
OR MODIFY THE ATTACHMENT ORDER.

S. 6658                             6

  S 8. Paragraph (b) of section 624 of the business corporation law,  as
amended  by  chapter  449  of  the  laws  of 1997, is amended to read as
follows:
  (b) Any person who shall have been a shareholder of record of a corpo-
ration,  OR  WHO  IS  OR  SHALL HAVE BEEN A LABORER, SERVANT OR EMPLOYEE
OTHER THAN A CONTRACTOR, upon at least five days' written  demand  shall
have  the  right  to  examine  in person or by agent or attorney, during
usual business hours, its minutes of the proceedings of its shareholders
and record of shareholders  and  to  make  extracts  therefrom  for  any
purpose  reasonably  related to such person's interest as a shareholder,
LABORER, SERVANT OR  EMPLOYEE.  Holders  of  voting  trust  certificates
representing shares of the corporation shall be regarded as shareholders
for  the  purpose  of this section.  Any such agent or attorney shall be
authorized in a writing that satisfies the  requirements  of  a  writing
under  paragraph  (b) of section 609 OF THIS ARTICLE (Proxies). A corpo-
ration requested to provide information pursuant to this paragraph shall
make available such information in written form and in any other  format
in which such information is maintained by the corporation and shall not
be  required  to  provide  such  information  in  any other format. If a
request made pursuant to this paragraph includes a  request  to  furnish
information  regarding  beneficial  owners,  the  corporation shall make
available such information in its possession regarding beneficial owners
as is provided to the corporation by a registered broker or dealer or  a
bank,  association  or  other  entity that exercises fiduciary powers in
connection with the forwarding of information to such owners. The corpo-
ration shall not be required  to  obtain  information  about  beneficial
owners not in its possession.
  S  9.  Section  630  of the business corporation law, paragraph (a) as
amended by chapter 212 of the laws of 1984, paragraph (c) as amended  by
chapter 746 of the laws of 1963, is amended to read as follows:
S 630. Liability  of shareholders for wages due to laborers, servants or
         employees.
  (a) The ten largest shareholders, 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, of every
corporation (other than an investment company registered as  such  under
an act of congress entitled "Investment Company Act of 1940"), no shares
of which are listed on a national securities exchange or regularly quot-
ed in an over-the-counter market by one or more members of a national or
an  affiliated  securities  association,  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 corporation. [Before  such  laborer,
servant  or employee shall charge such shareholder for such services, he
shall give notice in writing to such shareholder that he intends to hold
him liable under this section.  Such notice shall be  given  within  one
hundred  and eighty days after termination of such services, except that
if, within such period, the laborer,  servant  or  employee  demands  an
examination of the record of shareholders under paragraph (b) of section
624 (Books and records; right of inspection, prima facie evidence), such
notice may be given within sixty days after he has been given the oppor-
tunity to examine the record of shareholders.  An action to enforce such
liability  shall  be commenced within ninety days after the return of an
execution unsatisfied against the corporation upon a judgment  recovered
against it for such services.]

S. 6658                             7

  (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  INCLUD-
ING  ANY CONCOMITANT LIQUIDATED DAMAGES, PENALTIES, INTEREST, ATTORNEY'S
FEES  OR COSTS.   These shall specifically include but not be limited to
salaries,  overtime,  vacation,  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 shareholder who has paid more than his pro rata share under this
section shall be entitled to contribution pro rata from the other share-
holders liable under this section with respect to the  excess  so  paid,
over and above his pro rata share, and may sue them jointly or severally
or  any number of them to recover the amount due from them.  Such recov-
ery may be had in a separate action. As used  in  this  paragraph,  "pro
rata"  means in proportion to beneficial share interest. Before a share-
holder may claim contribution from other shareholders under  this  para-
graph, he shall[, unless they have been given notice by a laborer, serv-
ant  or  employee under paragraph (a),] give them notice in writing that
he intends to hold them so liable to him. [Such notice shall be given by
him within twenty days after the date that notice was given to him by  a
laborer, servant or employee under paragraph (a).]
  S  10.  Section 609 of the limited liability company law is amended by
adding two new subdivisions (c) and (d) to read as follows:
  (C) NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION (A) OF THIS SECTION,
THE TEN MEMBERS WITH  THE  LARGEST  PERCENTAGE  OWNERSHIP  INTEREST,  AS
DETERMINED DURING THE TIME WHICH THE UNPAID SERVICES REFERRED TO IN THIS
SECTION ARE PERFORMED, OF EVERY LIMITED LIABILITY COMPANY, 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 COMPANY. A MEMBER
WHO HAS PAID MORE THAN HIS 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  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 SEPA-
RATE ACTION. AS USED IN THIS PARAGRAPH, "PRO RATA" MEANS  IN  PROPORTION
TO PERCENTAGE OWNERSHIP INTEREST. BEFORE A MEMBER MAY CLAIM CONTRIBUTION
FROM  OTHER  MEMBERS  UNDER  THIS  SECTION, HE SHALL GIVE THEM NOTICE IN
WRITING THAT HE INTENDS TO HOLD THEM SO LIABLE TO HIM.
  (D) 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 BE  LIMITED  TO  SALARIES,  OVERTIME,
VACATION,  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, INCLUDING ANY CONCOMITANT LIQUI-
DATED DAMAGES, PENALTIES, INTEREST, ATTORNEYS' FEES OR COSTS.
  S 11. Section 1102 of the limited liability company law is amended  by
adding a new subdivision (e) to read as follows:
  (E) ANY PERSON WHO IS OR SHALL HAVE BEEN A LABORER, SERVANT OR EMPLOY-
EE OF A LIMITED LIABILITY COMPANY OTHER THAN A CONTRACTOR, UPON AT LEAST
FIVE  DAYS'  WRITTEN DEMAND SHALL HAVE THE RIGHT TO EXAMINE IN PERSON OR
BY AGENT OR ATTORNEY, DURING USUAL BUSINESS HOURS, RECORDS DESCRIBED  IN
PARAGRAPH  TWO  OF SUBDIVISION (A) OF THIS SECTION THROUGHOUT THE PERIOD

S. 6658                             8

OF TIME DURING WHICH SUCH LABORER, SERVANT OR EMPLOYEE PROVIDED SERVICES
TO SUCH COMPANY. A COMPANY REQUESTED TO PROVIDE INFORMATION PURSUANT  TO
THIS  PARAGRAPH SHALL MAKE AVAILABLE SUCH RECORDS IN WRITTEN FORM AND IN
ANY  OTHER FORMAT IN WHICH SUCH INFORMATION IS MAINTAINED BY THE COMPANY
AND SHALL NOT BE REQUIRED TO  PROVIDE  SUCH  INFORMATION  IN  ANY  OTHER
FORMAT.    UPON  REFUSAL BY THE COMPANY OR BY AN OFFICER OR AGENT OF THE
COMPANY TO PERMIT AN INSPECTION OF THE RECORDS DESCRIBED IN  THIS  PARA-
GRAPH,  THE  PERSON  MAKING  THE  DEMAND FOR INSPECTION MAY APPLY TO THE
SUPREME COURT IN THE JUDICIAL DISTRICT WHERE THE OFFICE OF  THE  COMPANY
IS  LOCATED,  UPON  SUCH  NOTICE  AS  THE COURT MAY DIRECT, FOR AN ORDER
DIRECTING THE COMPANY, ITS MEMBERS OR MANAGERS  TO  SHOW  CAUSE  WHY  AN
ORDER SHOULD NOT BE GRANTED PERMITTING SUCH INSPECTION BY THE APPLICANT.
UPON THE RETURN DAY OF THE ORDER TO SHOW CAUSE, THE COURT SHALL HEAR THE
PARTIES SUMMARILY, BY AFFIDAVIT OR OTHERWISE, AND IF IT APPEARS THAT THE
APPLICANT  IS QUALIFIED AND ENTITLED TO SUCH INSPECTION, THE COURT SHALL
GRANT AN ORDER COMPELLING SUCH  INSPECTION  AND  AWARDING  SUCH  FURTHER
RELIEF  AS  TO  THE  COURT MAY SEEM JUST AND PROPER. IF THE APPLICANT IS
FOUND TO BE QUALIFIED AND ENTITLED TO SUCH INSPECTION, THE COMPANY SHALL
PAY ALL REASONABLE ATTORNEY'S FEES AND COSTS OF SAID  APPLICANT  RELATED
TO THE DEMAND FOR INSPECTION OF THE RECORDS.
  S  12.  This act shall take effect on the thirtieth day after it shall
have become a law.

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