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

                                  6416

                            I N  S E N A T E

                               (PREFILED)

                             January 6, 2010
                               ___________

Introduced  by  Sen.  C. JOHNSON  -- read twice and ordered printed, and
  when printed to be committed to the Committee  on  Civil  Service  and
  Pensions

AN  ACT  to amend the retirement and social security law, in relation to
  professional services providers

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The retirement and social security law is amended by adding
a new article 22 to read as follows:
                               ARTICLE 22
                     PROFESSIONAL SERVICES PROVIDERS
SECTION 1200. DEFINITIONS.
        1201. CHARGING FOR PROFESSIONAL SERVICES.
        1202. ENFORCEMENT.
        1203. REPORTS REGARDING PROFESSIONAL SERVICES PROVIDERS.
        1204. NON-EXCLUSIVITY OF RIGHTS OR REMEDIES.
  S  1200.  DEFINITIONS. 1. AS USED IN THIS ARTICLE, THE TERM "EMPLOYER"
SHALL MEAN THE STATE, A PARTICIPATING EMPLOYER, AND ANY  OTHER  UNIT  OF
GOVERNMENT  OR  ORGANIZATION OBLIGATED OR AGREEING TO MAKE CONTRIBUTIONS
TO THE NEW YORK STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM OR THE  NEW
YORK  STATE AND LOCAL POLICE AND FIRE RETIREMENT SYSTEM ON BEHALF OF ITS
EMPLOYEES.
  2. THE TERM "EMPLOYEE" SHALL MEAN AN  INDIVIDUAL  PERFORMING  SERVICES
FOR  THE  EMPLOYER  FOR  WHICH THE EMPLOYER HAS THE RIGHT TO CONTROL THE
MEANS AND METHODS OF WHAT WORK WILL BE DONE AND HOW  THE  WORK  WILL  BE
DONE.
  3.  THE  TERM "PROFESSIONAL SERVICES PROVIDER" SHALL MEAN ANYONE WHOSE
SERVICE HAS BEEN ENGAGED BY AN EMPLOYER IN  THE  CAPACITY  OF  ATTORNEY,
PHYSICIAN,  ENGINEER, ARCHITECT, ACCOUNTANT OR AUDITOR AND WHO IS ALSO A
PARTNER, ASSOCIATE, INCLUDING AN ATTORNEY OF AN "OF  COUNSEL"  RELATION-
SHIP, OR EMPLOYEE OF ANOTHER ORGANIZATION OR ENTITY THAT HAS A CONTRACT,
RETAINER  OR  OTHER  AGREEMENT  TO  PROVIDE PROFESSIONAL SERVICES TO THE
PARTICIPATING EMPLOYER.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                      [ ] is old law to be omitted.
                                                           LBD14826-02-0

S. 6416                             2

  S 1201. CHARGING FOR PROFESSIONAL SERVICES. 1. A PROFESSIONAL SERVICES
PROVIDER SHALL NOT SIMULTANEOUSLY BE AN INDEPENDENT  CONTRACTOR  AND  AN
EMPLOYEE  OF  AN  EMPLOYER  FOR  THE  PURPOSE  OF PROVIDING PROFESSIONAL
SERVICES TO SUCH EMPLOYER.
  2.  A  PROFESSIONAL  SERVICES  PROVIDER  WHO  IS NOT AN EMPLOYEE OF AN
EMPLOYER SHALL NOT SEEK TO BE OR BE CONSIDERED,  TREATED,  OR  OTHERWISE
REPORTED  BY THE EMPLOYER AS AN EMPLOYEE THEREOF FOR PURPOSES OF COMPEN-
SATION, REMUNERATION, HEALTH INSURANCE, PENSION AND  ALL  EMPLOYMENT-RE-
LATED BENEFITS AND EMOLUMENTS ASSOCIATED THEREWITH.
  S  1202.  ENFORCEMENT.    1.  ANY  PROFESSIONAL  SERVICES PROVIDER WHO
VIOLATES SECTION TWELVE HUNDRED ONE OF THIS ARTICLE SHALL BE LIABLE  FOR
A  CIVIL  PENALTY  NOT  TO  EXCEED  THREE TIMES THE CHARGES AND FEES FOR
CONTRACTED SERVICES OR SALARY  RECEIVED  BY  THE  PROFESSIONAL  SERVICES
PROVIDER  AND  PAID  BY  SUCH EMPLOYER, AND IN ADDITION, MAY BE ENJOINED
FROM CONTINUING SUCH VIOLATION. CIVIL PENALTIES  AND  INJUNCTIVE  RELIEF
PROVIDED  IN  THIS  SECTION SHALL BE RECOVERABLE IN AN ACTION BROUGHT BY
THE ATTORNEY GENERAL.
  2. ANY PERSON WHO SHALL KNOWINGLY:
  (A) VIOLATE SUBDIVISION TWO OF SECTION  TWELVE  HUNDRED  ONE  OF  THIS
ARTICLE;
  (B) MAKE A FALSE STATEMENT OF MATERIAL FACT; OR
  (C) FALSIFY OR PERMIT TO BE FALSIFIED ANY RECORD OR RECORDS OF THE NEW
YORK  STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM OR THE NEW YORK STATE
AND LOCAL POLICE AND FIRE RETIREMENT SYSTEM IN  AN  ATTEMPT  TO  DEFRAUD
SUCH  RETIREMENT  SYSTEM  AS  A  RESULT  OF  SUCH ACT FOR THE PURPOSE OF
OBTAINING A CREDIT TOWARD PENSION BENEFITS, OR A BENEFIT OR  PAYMENT  IN
EXCESS OF ONE THOUSAND DOLLARS FROM SUCH RETIREMENT SYSTEM FOR A PROFES-
SIONAL  SERVICES  PROVIDER  TO WHICH SUCH PROFESSIONAL SERVICES PROVIDER
WOULD NOT BE ENTITLED, SHALL BE GUILTY OF A CLASS E FELONY.
  S 1203.  REPORTS  REGARDING  PROFESSIONAL  SERVICES  PROVIDERS.  EVERY
EMPLOYER  SHALL, ON OR BEFORE THE FORTY-FIFTH DAY AFTER THE COMMENCEMENT
OF ITS FISCAL YEAR, FILE WITH THE COMPTROLLER AND THE ATTORNEY GENERAL A
REPORT SPECIFYING:
  1.  ALL  PROFESSIONAL  SERVICES  PROVIDERS  WHO  PROVIDE  PROFESSIONAL
SERVICES TO SUCH EMPLOYER;
  2. WHETHER SUCH EMPLOYER HIRED SUCH PROFESSIONAL SERVICES PROVIDERS AS
EMPLOYEES; AND
  3. ALL REMUNERATION AND COMPENSATION PAID FOR PROFESSIONAL SERVICES.
  S 1204. NON-EXCLUSIVITY OF RIGHTS OR REMEDIES. NOTHING IN THIS ARTICLE
SHALL  BE  CONSTRUED  TO  LIMIT,  IN  ANY MATTER, ANY RIGHTS OR REMEDIES
OTHERWISE AVAILABLE UNDER LAW AGAINST ANY PARTY  OR  TO  ANY  PERSON  OR
ENTITY, INCLUDING, BUT NOT LIMITED TO, THE ATTORNEY GENERAL OR THE COMP-
TROLLER OF THE STATE OF NEW YORK.
  S  2.  This  act shall take effect on the thirtieth day after it shall
have become a law.
  FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
  This bill would require the state of New York  and  the  participating
employers  in  the New York State and Local Employees' Retirement System
and the New York State and Local Police and Fire  Retirement  System  to
annually file a report to the Comptroller and the Attorney General spec-
ifying  all who provided professional services to such employer, whether
they were hired as employees, and all remuneration and compensation paid
for such professional services.
  If this bill is enacted, we anticipate that there  would  be  a  small
annual  administrative  cost  to the New York State and Local Employees'

S. 6416                             3

Retirement System and the New York  State  and  Local  Police  and  Fire
Retirement System.
  This estimate, dated January 4, 2010, and intended for use only during
the 2010 Legislative Session, is Fiscal Note No. 2010-3, prepared by the
Actuary  for  the  New York State and Local Employees' Retirement System
and the New York State and Local Police and Fire Retirement System.