The New York State Senate

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

                                  6698

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                             March 24, 2011
                               ___________

Introduced  by M. of A. SILVER, WRIGHT, BRENNAN, MILLMAN, LENTOL, GLICK,
  GOTTFRIED, ABBATE, KAVANAGH, LANCMAN, O'DONNELL, PRETLOW, ROSENTHAL --
  read once and referred 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 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.
  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-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10169-02-1

A. 6698                             2

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.
  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 SHALL
ASSESS  AGAINST  THE  CLIENT AN ADDITIONAL AMOUNT AS LIQUIDATED DAMAGES,
UNLESS THE CLIENT PROVES A GOOD  FAITH  BASIS  FOR  BELIEVING  THAT  ITS
UNDERPAYMENT  OF COMPENSATION WAS IN COMPLIANCE WITH THE LAW. LIQUIDATED
DAMAGES SHALL BE CALCULATED BY THE COMMISSIONER  AS  NO  MORE  THAN  ONE
HUNDRED PERCENT OF THE TOTAL AMOUNT OF COMPENSATION FOUND TO BE DUE.  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
ALL REASONABLE ATTORNEY'S FEES, PREJUDGMENT INTEREST AS  REQUIRED  UNDER
THE  CIVIL  PRACTICE LAW AND RULES, 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 ONE HUNDRED PERCENT OF THE TOTAL AMOUNT OF  COMPENSATION  FOUND
TO  BE DUE. THE REMEDIES PROVIDED BY THIS ARTICLE MAY BE ENFORCED SIMUL-
TANEOUSLY 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.

A. 6698                             3

  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-
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.

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

                                 6698--A

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                             March 24, 2011
                               ___________

Introduced  by M. of A. SILVER, WRIGHT, BRENNAN, MILLMAN, LENTOL, GLICK,
  GOTTFRIED, ABBATE, KAVANAGH, LANCMAN, O'DONNELL,  PRETLOW,  ROSENTHAL,
  CASTRO,  SCHIMEL,  JAFFEE,  P. RIVERA,  V. LOPEZ,  HEVESI,  TITONE  --
  Multi-Sponsored by -- M. of A. JACOBS -- read once and referred to the
  Committee on Labor -- reported and referred to the Committee on  Codes
  --  committee  discharged,  bill amended, ordered reprinted as amended
  and recommitted to said committee

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  AND  SECTION  ONE
HUNDRED NINETY-SIX-C 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.
  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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10169-05-1

A. 6698--A                          2

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.
  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 CLIENTS  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 SHALL
ASSESS AGAINST THE CLIENT AN ADDITIONAL AMOUNT  AS  LIQUIDATED  DAMAGES,
UNLESS  THE  CLIENT  PROVES  A  GOOD  FAITH BASIS FOR BELIEVING THAT ITS
UNDERPAYMENT OF COMPENSATION WAS IN COMPLIANCE WITH THE LAW.  LIQUIDATED
DAMAGES  SHALL  BE  CALCULATED  BY  THE COMMISSIONER AS NO MORE THAN ONE
HUNDRED PERCENT OF THE TOTAL AMOUNT OF COMPENSATION FOUND TO BE DUE.  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
ALL  REASONABLE  ATTORNEY'S FEES, PREJUDGMENT INTEREST AS REQUIRED UNDER
THE CIVIL PRACTICE LAW AND RULES, 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  ONE HUNDRED PERCENT OF THE TOTAL AMOUNT OF COMPENSATION FOUND
TO BE DUE. THE REMEDIES PROVIDED BY THIS ARTICLE MAY BE ENFORCED  SIMUL-
TANEOUSLY 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-

A. 6698--A                          3

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-
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.
  12. THIS SECTION SHALL NOT APPLY TO WORK  PERFORMED  ON  ONE  AND  TWO
FAMILY DWELLINGS.
  S 2. This act shall take effect immediately.

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

                                 6698--B
                                                        Cal. No. 220

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                             March 24, 2011
                               ___________

Introduced  by M. of A. SILVER, WRIGHT, BRENNAN, MILLMAN, LENTOL, GLICK,
  GOTTFRIED, ABBATE, KAVANAGH, LANCMAN, O'DONNELL,  PRETLOW,  ROSENTHAL,
  CASTRO,   SCHIMEL,   JAFFEE,   P. RIVERA,  V. LOPEZ,  HEVESI,  TITONE,
  JEFFRIES, FARRELL -- Multi-Sponsored by -- M.  of  A.  GALEF,  JACOBS,
  PERRY  -- read once and referred to the Committee on Labor -- reported
  and referred to the Committee on Codes -- committee  discharged,  bill
  amended,  ordered reprinted as amended and recommitted to said commit-
  tee -- advanced to a third reading,  amended  and  ordered  reprinted,
  retaining its place on the order of third reading

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 AND SECTION ONE
HUNDRED NINETY-SIX-C 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;  BUT  SHALL  NOT   INCLUDE   A
CONSTRUCTION CONTRACTOR.
  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.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10169-09-2

A. 6698--B                          2

  4. "CONSTRUCTION CONTRACTOR" MEANS ANY PERSON, SOLE PROPRIETOR,  PART-
NERSHIP,  FIRM,  CORPORATION,  LIMITED LIABILITY COMPANY, ASSOCIATION OR
OTHER LEGAL ENTITY WHO BY ONESELF OR THROUGH OTHERS OFFERS TO UNDERTAKE,
OR HOLDS ONESELF OUT AS BEING ABLE TO UNDERTAKE,  OR  DOES  UNDERTAKE  A
CONSTRUCTION PROJECT.
  5.  "CONSTRUCTION  PROJECT"  MEANS  THE  PROVIDING  OF  ANY  LABOR  OR
SERVICES, AND THE USE OF ANY MATERIALS OR EQUIPMENT IN ORDER  TO  ALTER,
BUILD, EXCAVATE, ADD TO, SUBTRACT FROM, IMPROVE, REPAIR, MAINTAIN, RENO-
VATE, MOVE, WRECK OR DEMOLISH ANY BRIDGE, BUILDING, HIGHWAY, ROAD, RAIL-
ROAD,  LAND, TUNNEL, SEWER, DRAINAGE OR OTHER STRUCTURE, PROJECT, DEVEL-
OPMENT, OR IMPROVEMENT, OR THE DOING OF ANY PART THEREOF, INCLUDING  THE
ERECTION OF SCAFFOLDING OR OTHER STRUCTURES OR WORKS IN CONNECTION THER-
EWITH.
  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.
  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 CLIENTS  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 SHALL
ASSESS AGAINST THE CLIENT AN ADDITIONAL AMOUNT  AS  LIQUIDATED  DAMAGES,
UNLESS  THE  CLIENT  PROVES  A  GOOD  FAITH BASIS FOR BELIEVING THAT ITS
UNDERPAYMENT OF COMPENSATION WAS IN COMPLIANCE WITH THE LAW.  LIQUIDATED
DAMAGES  SHALL  BE  CALCULATED  BY  THE COMMISSIONER AS NO MORE THAN ONE
HUNDRED PERCENT OF THE TOTAL AMOUNT OF COMPENSATION FOUND TO BE DUE.  IN
ANY ACTION  INSTITUTED IN THE COURTS UPON A  COMPENSATION  CLAIM  BY  AN
INDEPENDENT  CONTRACTOR  OR  THE  COMMISSIONER  IN WHICH THE INDEPENDENT

A. 6698--B                          3

CONTRACTOR PREVAILS, THE COURT SHALL ALLOW SUCH  INDEPENDENT  CONTRACTOR
ALL  REASONABLE  ATTORNEY'S FEES, PREJUDGMENT INTEREST AS REQUIRED UNDER
THE CIVIL PRACTICE LAW AND RULES, 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  ONE HUNDRED PERCENT OF THE TOTAL AMOUNT OF COMPENSATION FOUND
TO BE DUE. THE REMEDIES PROVIDED BY THIS ARTICLE MAY BE ENFORCED  SIMUL-
TANEOUSLY 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
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 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.

A. 6698--B                          4

  12. THIS SECTION SHALL NOT APPLY TO:  (A) REAL ESTATE BROKERS, ASSOCI-
ATE BROKERS OR SALESPERSONS LICENSED PURSUANT TO ARTICLE TWELVE-A OF THE
REAL PROPERTY LAW;
  (B) WORK PERFORMED ON ONE OR TWO FAMILY DWELLINGS; OR
  (C) CONSTRUCTION CONTRACTORS OR CONSTRUCTION PROJECTS.
  S 2. This act shall take effect immediately.