S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1794
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             January 10, 2017
                                ___________
 
 Introduced by Sens. SQUADRON, HOYLMAN -- read twice and ordered printed,
   and when printed to be committed to the Committee on Labor
 
 AN ACT to amend the labor law, in relation to independent contractors
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. The labor law is amended by adding two new  sections  196-b
 and 196-c to read as follows:
   § 196-B. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE THE TERM:
   1.  "COMPENSATION"  MEANS  THE  EARNINGS OF AN INDEPENDENT CONTRACTOR.
 THE TERM "COMPENSATION" ALSO INCLUDES REIMBURSEMENT FOR EXPENSES.
   2. "INDEPENDENT CONTRACTOR" MEANS A SOLE  PROPRIETOR  WHO  IS  NOT  AN
 EMPLOYEE AND WHO IS HIRED OR RETAINED BY A CLIENT FOR AN AMOUNT EQUAL TO
 OR GREATER THAN SIX HUNDRED DOLLARS.
   3.  "CLIENT"  INCLUDES A CORPORATION, LIMITED LIABILITY COMPANY, PART-
 NERSHIP, ASSOCIATION OR NON-PROFITMAKING ORGANIZATION  CONTRACTING  WITH
 AN  INDEPENDENT  CONTRACTOR IN ANY OCCUPATION, INDUSTRY, TRADE, BUSINESS
 OR SERVICE FOR  COMPENSATION  EQUAL  TO  OR  GREATER  THAN  SIX  HUNDRED
 DOLLARS.    THE  TERM  "CLIENT" SHALL NOT INCLUDE A GOVERNMENTAL ENTITY,
 INCLUDING BUT NOT LIMITED TO, ANY AGENCY, BOARD, DEPARTMENT,  COMMISSION
 OF  THE STATE OR ANY POLITICAL SUBDIVISION THEREOF; AND CLIENT SHALL NOT
 INCLUDE A PERSON. THE TERM "CLIENT" SHALL NOT INCLUDE OWNERS OF ONE  AND
 TWO-FAMILY DWELLINGS.
   §  196-C.  PAYMENT  OF  INDEPENDENT  CONTRACTORS.  1.  AN  INDEPENDENT
 CONTRACTOR SHALL BE PAID THE COMPENSATION EARNED IN ACCORDANCE WITH  THE
 AGREED WORK TERMS BUT NOT LATER THAN THE LAST DAY OF THE MONTH FOLLOWING
 THE  MONTH  IN  WHICH  THE COMPENSATION IS EARNED. THE AGREED WORK TERMS
 SHALL BE REDUCED IN WRITING, SIGNED BY BOTH THE CLIENT AND THE INDEPEND-
 ENT CONTRACTOR, KEPT ON FILE BY THE CLIENT FOR A PERIOD OF NOT LESS THAN
 SIX YEARS AND MADE AVAILABLE TO  THE  COMMISSIONER  UPON  REQUEST.  SUCH
 WRITING SHALL INCLUDE A DESCRIPTION OF HOW COMPENSATION EARNED AND PAYA-
 BLE SHALL BE CALCULATED. THE FAILURE OF A CLIENT TO PRODUCE SUCH WRITTEN
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD04413-01-7

 S. 1794                             2
 
 WORK  TERMS,  UPON  REQUEST  OF  THE  COMMISSIONER, SHALL GIVE RISE TO A
 PRESUMPTION THAT THE TERMS THAT THE INDEPENDENT CONTRACTOR HAS PRESENTED
 ARE THE AGREED TERMS.
   2.  THE COMMISSIONER SHALL INVESTIGATE AND ATTEMPT TO ADJUST EQUITABLY
 CONTROVERSIES BETWEEN CLIENTS AND INDEPENDENT  CONTRACTORS  RELATING  TO
 THIS SECTION.
   3. THE COMMISSIONER MAY TAKE ASSIGNMENTS OF CLAIMS FOR COMPENSATION AS
 DEFINED  IN  SECTION ONE HUNDRED NINETY-SIX-B OF THIS ARTICLE FROM INDE-
 PENDENT CONTRACTORS OR THIRD  PARTIES  IN  TRUST  FOR  SUCH  INDEPENDENT
 CONTRACTORS  OR  FOR THE VARIOUS FUNDS FOR SUCH INDEPENDENT CONTRACTORS.
 ALL SUCH ASSIGNMENTS SHALL RUN TO THE COMMISSIONER AND HIS SUCCESSOR  IN
 OFFICE.  THE  COMMISSIONER MAY SUE COMPANIES ON COMPENSATION CLAIMS THUS
 ASSIGNED. HE MAY JOIN IN A SINGLE  ACTION  ANY  NUMBER  OF  COMPENSATION
 CLAIMS AGAINST THE SAME COMPANY.
   4.  ANY  INDEPENDENT  CONTRACTOR  MAY  FILE  WITH  THE  COMMISSIONER A
 COMPLAINT REGARDING A VIOLATION OF THIS ARTICLE FOR AN INVESTIGATION  OF
 SUCH  COMPLAINT  AND  STATEMENT  SETTING THE APPROPRIATE REMEDY, IF ANY.
 FAILURE OF A CLIENT TO KEEP ADEQUATE RECORDS SHALL NOT OPERATE AS A  BAR
 TO  FILING  OF A COMPLAINT BY AN INDEPENDENT CONTRACTOR.  IN SUCH A CASE
 THE CLIENT IN VIOLATION SHALL  BEAR  THE  BURDEN  OF  PROVING  THAT  THE
 COMPLAINING INDEPENDENT CONTRACTOR WAS PAID COMPENSATION.
   5.  ON BEHALF OF ANY INDEPENDENT CONTRACTOR PAID LESS THAN THE COMPEN-
 SATION TO WHICH HE OR SHE IS ENTITLED UNDER THE AGREED WORK TERMS  UNDER
 THE  PROVISIONS  OF  THIS  ARTICLE, THE COMMISSIONER MAY BRING ANY LEGAL
 ACTION NECESSARY, INCLUDING ADMINISTRATIVE ACTION, TO COLLECT SUCH CLAIM
 AND AS PART OF SUCH LEGAL ACTION, IN ADDITION TO ANY OTHER REMEDIES  AND
 PENALTIES  OTHERWISE  AVAILABLE UNDER THIS ARTICLE, THE COMMISSIONER MAY
 ASSESS AGAINST THE CLIENT AN ADDITIONAL  AMOUNT  AS  LIQUIDATED  DAMAGES
 EQUAL  TO  TWENTY-FIVE PERCENT OF THE TOTAL AMOUNT OF COMPENSATION FOUND
 TO BE DUE, UNLESS THE CLIENT PROVES A GOOD  FAITH  BASIS  FOR  BELIEVING
 THAT ITS UNDERPAYMENT OF COMPENSATION WAS IN COMPLIANCE WITH THE LAW. IN
 ANY  ACTION    INSTITUTED  IN THE COURTS UPON A COMPENSATION CLAIM BY AN
 INDEPENDENT CONTRACTOR OR THE  COMMISSIONER  IN  WHICH  THE  INDEPENDENT
 CONTRACTOR  PREVAILS,  THE COURT SHALL ALLOW SUCH INDEPENDENT CONTRACTOR
 REASONABLE ATTORNEY'S FEES AND, UNLESS THE CLIENT PROVES  A  GOOD  FAITH
 BASIS TO BELIEVE THAT ITS UNDERPAYMENT OF COMPENSATION WAS IN COMPLIANCE
 WITH  THE LAW, AN ADDITIONAL AMOUNT AS LIQUIDATED DAMAGES EQUAL TO TWEN-
 TY-FIVE PERCENT OF THE TOTAL AMOUNT OF COMPENSATION FOUND TO BE DUE. THE
 REMEDIES PROVIDED BY THIS ARTICLE  MAY  BE  ENFORCED  SIMULTANEOUSLY  OR
 CONSECUTIVELY SO FAR AS NOT INCONSISTENT WITH EACH OTHER.
   6.  NOTWITHSTANDING  ANY  OTHER PROVISION OF LAW, AN ACTION TO RECOVER
 UPON A LIABILITY IMPOSED BY THIS ARTICLE MUST BE  COMMENCED  WITHIN  SIX
 YEARS.  ALL INDEPENDENT CONTRACTORS SHALL HAVE THE RIGHT TO RECOVER FULL
 COMPENSATION  ACCRUED DURING THE SIX YEARS PREVIOUS TO THE COMMENCING OF
 SUCH ACTION, WHETHER  SUCH  ACTION  IS  INSTITUTED  BY  THE  INDEPENDENT
 CONTRACTOR OR BY THE COMMISSIONER.
   7.  EACH  INDEPENDENT  CONTRACTOR  WHO  FILES  A COMPLAINT REGARDING A
 VIOLATION OF A PROVISION OF THIS ARTICLE SHALL BE PROVIDED WITH A  WRIT-
 TEN  DESCRIPTION OF THE ANTICIPATED PROCESSING OF THE COMPLAINT, INCLUD-
 ING INVESTIGATION, CASE CONFERENCE, POTENTIAL CIVIL AND CRIMINAL  PENAL-
 TIES, AND COLLECTION PROCEDURES.
   8.  EACH INDEPENDENT CONTRACTOR AND HIS OR HER REPRESENTATIVE SHALL BE
 NOTIFIED IN WRITING OF ANY CASE CONFERENCE BEFORE IT IS HELD  AND  GIVEN
 THE OPPORTUNITY TO ATTEND.
   9.  EACH INDEPENDENT CONTRACTOR AND HIS OR HER REPRESENTATIVE SHALL BE
 NOTIFIED IN WRITING OF ANY AWARD AND COLLECTION OF BACK COMPENSATION AND

 S. 1794                             3
 
 CIVIL PENALTIES, AND OF ANY INTENT TO SEEK CRIMINAL  PENALTIES.  IN  THE
 EVENT  THAT CRIMINAL PENALTIES ARE SOUGHT THE INDEPENDENT CONTRACTOR AND
 HIS OR HER REPRESENTATIVE SHALL BE NOTIFIED OF  THE  OUTCOME  OF  PROSE-
 CUTION.
   10.  IF  THE  COMMISSIONER  DETERMINES  THAT  A  CLIENT HAS VIOLATED A
 PROVISION OF THIS ARTICLE, OR A RULE OR  REGULATION  PROMULGATED  THERE-
 UNDER,  BY FAILING TO PAY THE COMPENSATION OF THEIR INDEPENDENT CONTRAC-
 TORS, THE COMMISSIONER SHALL ISSUE TO  THE  CLIENT  AN  ORDER  DIRECTING
 COMPLIANCE  THEREWITH,  WHICH  SHALL DESCRIBE PARTICULARLY THE NATURE OF
 THE ALLEGED VIOLATION, AND ORDER THE PAYMENT OF INTEREST AT THE RATE  OF
 INTEREST THEN IN EFFECT AS PRESCRIBED BY THE SUPERINTENDENT OF FINANCIAL
 SERVICES  PURSUANT  TO  SECTION  FOURTEEN-A OF THE BANKING LAW PER ANNUM
 FROM THE DATE OF THE UNDERPAYMENT TO THE DATE OF THE PAYMENT.  IN  ADDI-
 TION  TO  DIRECTING PAYMENT OF COMPENSATION FOUND TO BE DUE, SUCH ORDER,
 IF ISSUED TO A CLIENT WHO PREVIOUSLY HAS  BEEN  FOUND  IN  VIOLATION  OF
 THOSE  PROVISIONS,  RULES OR REGULATIONS, OR TO A CLIENT WHOSE VIOLATION
 IS WILLFUL OR EGREGIOUS, SHALL DIRECT PAYMENT TO THE COMMISSIONER OF  AN
 ADDITIONAL SUM AS A CIVIL PENALTY IN AN AMOUNT EQUAL TO DOUBLE THE TOTAL
 AMOUNT FOUND TO BE DUE.
   11. EVERY CLIENT WHO DOES NOT PAY THE COMPENSATION OF ALL OF ITS INDE-
 PENDENT  CONTRACTORS  IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER,
 AND THE OFFICERS AND AGENTS OF  ANY  CLIENT  WHO  KNOWINGLY  PERMIT  THE
 CLIENT TO VIOLATE THIS CHAPTER BY FAILING TO PAY THE COMPENSATION OF ANY
 OF  ITS INDEPENDENT CONTRACTORS IN ACCORDANCE WITH THE PROVISIONS THERE-
 OF, SHALL BE GUILTY OF A MISDEMEANOR FOR  THE  FIRST  OFFENSE  AND  UPON
 CONVICTION  THEREFOR  SHALL BE FINED NOT LESS THAN FIVE HUNDRED NOR MORE
 THAN TWENTY THOUSAND DOLLARS OR IMPRISONED FOR NOT MORE THAN  ONE  YEAR,
 AND,  IN  THE  EVENT THAT ANY SECOND OR SUBSEQUENT OFFENSE OCCURS WITHIN
 SIX YEARS OF THE DATE OF CONVICTION FOR A PRIOR OFFENSE, SHALL BE GUILTY
 OF A FELONY FOR THE SECOND OR SUBSEQUENT OFFENSE,  AND  UPON  CONVICTION
 THEREFOR, SHALL BE FINED NOT LESS THAN FIVE HUNDRED NOR MORE THAN TWENTY
 THOUSAND  DOLLARS OR IMPRISONED FOR NOT MORE THAN ONE YEAR PLUS ONE DAY,
 OR PUNISHED BY BOTH SUCH FINE AND IMPRISONMENT, FOR EACH SUCH OFFENSE.
   § 2. This act shall take effect immediately.