S T A T E O F N E W Y O R K
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8084
I N S E N A T E
June 7, 2010
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Introduced by Sen. SQUADRON -- 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:
S 196-B. DEFINITIONS. FOR PURPOSES OF THIS SECTION 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 PERSON, CORPORATION, LIMITED LIABILITY COMPANY,
ASSOCIATION OR NON-PROFITMAKING ORGANIZATION CONTRACTING WITH AN INDE-
PENDENT CONTRACTOR IN ANY OCCUPATION, INDUSTRY, TRADE, BUSINESS OR
SERVICE FOR AN AMOUNT EQUAL TO OR GREATER THAN SIX HUNDRED DOLLARS. THE
TERM "CLIENT" SHALL NOT INCLUDE A GOVERNMENTAL AGENCY.
S 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
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.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD17438-03-0
S. 8084 2
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 COMPLIANT 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
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-
S. 8084 3
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 EFFECTED AS PRESCRIBED BY THE SUPERINTENDENT OF BANKS
PURSUANT TO SECTION FOURTEEN-A OF THE BANKING LAW PER ANNUM FROM THE
DATE OF THE UNDERPAYMENT TO THE DATE OF THE PAYMENT. IN ADDITION 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.
S 2. This act shall take effect immediately.