NY State Senate Bill 2023-S533

Current Bill Status - In Senate Committee Judiciary Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to judiciary
Jan 04, 2023	referred to judiciary

co-Sponsors

2023-S533 (ACTIVE) - Details

See Assembly Version of this Bill:: A3791
Current Committee:: Senate Judiciary
Law Section:: General Obligations Law
Laws Affected:: Add §11-108, Gen Ob L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S6727
2021-2022: S761, A3478

2023-S533 (ACTIVE) - Summary

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; provides an action to recover damages may be maintained as a class action.

2023-S533 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S533

SPONSOR: THOMAS
 
TITLE OF BILL:

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

 
PURPOSE OR GENERAL IDEA OF BILL:

To provide compensation for workers who miss paychecks through no fault
of their own by imposing liability for up to three times the amount of
the paycheck on payroll processing companies who intentionally prevent
the distribution of the payroll.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill amends the general obligations law by adding a new
section 11-108.

Subsection 1 defines "payroll processing company" as a person or busi-
ness entity that contracts with an employer to 1) calculate, process,

and produce wage payments under the employer's federal employer iden-
tification number, 2) remit taxes to the government under the employer's
federal employer identification number, 3) issue income tax forms under
the employer's federal employer identification number and 4) conditions
wage payment on the employer's advance deposit of funds to the payroll
processor.

Subsection 2 of the bill provides that a payroll processing company that
intentionally and without good cause prevents the remittance of taxes or
payment of wages shall be liable to employees for up to three times the
expected amount of any missed payments. A payroll processing company has
a grace period of one business day to cure any remittance delay.

Subsection 4 states that employees would be able to maintain a class
action.

Section 2 provides the effective date, which is immediately when this
bill becomes the law.

 
JUSTIFICATION:

When payroll processing company MyPayrollHR abruptly shut down in
September of 2019, it left employees of 4,000 businesses in New York
State and around the country without a paycheck. After its abrupt
closure, there were many cases where it appeared that an employee
received a paycheck in their bank account, only to have the transaction
reversed once it became clear that MyPayrollHR would not deposit the
funds. This led to some employees carrying a negative balance in their
account, leaving them unable to pay for food, rent, or other necessary
expenses.Workers, especially those living paycheck to paycheck, rely on
receiving a regular paycheck for their work, and even one missed or
delayed payment can throw their lives into chaos.

This bill seeks to hold payroll processing companies accountable when
they intentionally disrupt workers lives by failing to distribute the
payroll as required. By imposing the threat of treble damages and class
action lawsuits on these companies, this legislation ensures they will
take every step possible to ensure that each worker receives their
paycheck in full and on-time, as expected.

 
PRIOR LEGISLATIVE HISTORY:

2021-22: S.761 (Thomas) / A.3478 (Fahy) - Referred to Judiciary.

2019-20: S.6727 (Thomas) / A.8653 (Fahy) - Passed Senate.

 
FISCAL IMPLICATION:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2023-S533 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    533
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              January 4, 2023
                                ___________
 
 Introduced  by  Sen.  THOMAS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Judiciary
 
 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:
 
   Section 1. The general obligations law is  amended  by  adding  a  new
 section 11-108 to read as follows:
   § 11-108. LIABILITY  OF  PAYROLL  PROCESSING  COMPANY.    1.  FOR  THE
 PURPOSES OF THIS SECTION, "PAYROLL PROCESSING COMPANY" MEANS A PERSON OR
 BUSINESS ENTITY UNDER CONTRACT TO  AN  EMPLOYER  THAT:  (A)  CALCULATES,
 PROCESSES  AND  PRODUCES WAGE PAYMENTS TO THE EMPLOYER'S EMPLOYEES UNDER
 SUCH EMPLOYER'S FEDERAL EMPLOYER IDENTIFICATION  NUMBER;  (B)  WITHHOLDS
 AND  REMITS APPLICABLE TAXES TO GOVERNMENT AGENCIES USING THE EMPLOYER'S
 FEDERAL EMPLOYMENT IDENTIFICATION NUMBER; (C) ISSUES FEDERAL  AND  STATE
 INCOME  TAX  FORMS  TO  THE  EMPLOYER'S  EMPLOYEES USING SUCH EMPLOYER'S
 FEDERAL EMPLOYER IDENTIFICATION NUMBER; AND (D) CONDITIONS WAGE PAYMENTS
 TO THE EMPLOYER'S EMPLOYEES ON THE ADVANCE RECEIPT OF  FUNDS  FROM  SUCH
 EMPLOYER  TO  FULLY  COVER  SUCH  WAGE  PAYMENTS.  A PERSON ACTING AS AN
 EMPLOYER UNDER 26 U.S.C. 3401(D)(1) THAT OTHERWISE MEETS THE  DEFINITION
 OF  A PAYROLL PROCESSING COMPANY SHALL NOT BE CONSIDERED A PAYROLL PROC-
 ESSING COMPANY IF THE PERSON ACTING AS AN EMPLOYER AND THE EMPLOYEE  ARE
 SUBJECT  TO  A  COLLECTIVE  BARGAINING  AGREEMENT  AND  SUCH  COLLECTIVE
 BARGAINING AGREEMENT EXPRESSLY PROVIDES FOR THE RECOVERY OF UNPAID, LOST
 OR STOLEN WAGES.
   2. NOTWITHSTANDING ANY OTHER PROVISION  OF  LAW  TO  THE  CONTRARY,  A
 PAYROLL  PROCESSING  COMPANY  THAT  INTENTIONALLY AND WITHOUT GOOD CAUSE
 PREVENTS THE REMITTANCE OF TAXES OR PAYMENT OF  WAGES  PURSUANT  TO  THE
 CONTRACT WITH THE EMPLOYER SHALL BE LIABLE TO AN EMPLOYEE OF THE EMPLOY-
 ER THAT FAILED TO RECEIVE AN OWED PAYMENT WITHIN ONE BUSINESS DAY OF THE
 DATE  SUCH PAYMENT WAS EXPECTED FOR AN AMOUNT UP TO THREE TIMES THE OWED
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01868-01-3

 S. 533                              2
 
 PAYMENT OF WAGES AND APPLICABLE TAXES. GOOD CAUSE MAY INCLUDE, BUT SHALL
 NOT BE LIMITED TO, THE FAILURE OF  AN  EMPLOYER  TO  PROVIDE  SUFFICIENT
 FUNDS  BY  THE  APPLICABLE DEADLINE, REASONABLE EFFORTS TO VERIFY POTEN-
 TIALLY FRAUDULENT ACTIVITY, FAILURE OF AN EMPLOYER TO PROVIDE THE NECES-
 SARY  PAYROLL  INPUT,  OBSERVANCE  OF RELEVANT STATE AND FEDERAL LAWS OR
 REGULATIONS, AND OTHER FACTORS OUTSIDE THE CONTROL OF THE PAYROLL  PROC-
 ESSING  COMPANY;  PROVIDED  A  PAYROLL PROCESSING COMPANY SHALL NOT HAVE
 GOOD CAUSE UNDER THIS SECTION IF SUCH PAYROLL PROCESSING COMPANY ACTS OR
 FAILS TO ACT IN VIOLATION OF APPLICABLE STATE AND FEDERAL LAWS AND REGU-
 LATIONS.
   3. LIABILITY UNDER THIS SECTION IS IN ADDITION TO ANY OTHER APPLICABLE
 PENALTIES AND CAUSES OF ACTION.
   4. AN ACTION TO RECOVER DAMAGES UNDER THIS SECTION MAY  BE  MAINTAINED
 AS A CLASS ACTION, NOTWITHSTANDING SUBDIVISION B OF SECTION NINE HUNDRED
 ONE OF THE CIVIL PRACTICE LAW AND RULES.
   § 2. This act shall take effect immediately.

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Senate Bill S533

Sponsored By

Current Bill Status - In Senate Committee Judiciary Committee

co-Sponsors

2023-S533 (ACTIVE) - Details

2023-S533 (ACTIVE) - Summary

2023-S533 (ACTIVE) - Sponsor Memo

2023-S533 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S533

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Sponsored By

Kevin Thomas

Current Bill Status - In Senate Committee Judiciary Committee

co-Sponsors

Dean Murray

2023-S533 (ACTIVE) - Details

2023-S533 (ACTIVE) - Summary

2023-S533 (ACTIVE) - Sponsor Memo

2023-S533 (ACTIVE) - Bill Text download pdf

Comments