Senate Bill S7268

2015-2016 Legislative Session

Provides for personal liability of corporate officers, members of limited liablity companies and partners for delinquent unemployment contributions

download bill text pdf

Archive: Last Bill Status - In Senate Committee Labor 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

Please enter your contact information

First Name

Last Name

Email Address

A valid email address is required.

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

Actions

View Actions

Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 12, 2016	referred to labor

2015-S7268 (ACTIVE) - Details

See Assembly Version of this Bill:: A10443
Current Committee:: Senate Labor
Law Section:: Labor Law
Laws Affected:: Add §573-a, Lab L

2015-S7268 (ACTIVE) - Summary

Provides for personal liability of corporate officers, members of limited liability companies and partners for delinquent unemployment contributions, and the penalties and interest thereon.

2015-S7268 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S7268

 TITLE OF BILL :  An act to amend the labor law, in relation to
unemployment insurance

 PURPOSE OF THE BILL :

The purpose of this bill is to make corporate officers, members and
managers of limited liability companies, general partners, and certain
limited partners personally liable for unpaid unemployment insurance
("UI") contributions.

 SUMMARY OF PROVISIONS :

Section 1 of the bill would add a new section 573-a to the Labor Law.
This new section would impose personal liability upon: officers of a
corporation; managers and members of limited liability companies with
an ownership interest in or management authority over the limited
liability company; general partners of partnerships; and limited
partners of partnerships to the extent that such limited partners are
liable to third parties under the Partnership Law. These individuals
would receive a determination from the Commissioner of Labor setting
forth the basis for personal liability and the total amount of
contributions, penalties and interest due and unpaid. The bill also
provides that the liability of such individuals may not be relieved by
the dissolution of the corporation, limited liability company, or

partnership. Finally, the bill provides that any person determined to
be personally liable under this section shall have all rights of
appeal set forth in title eight of Article 18 of the Labor Law with
respect to the determination regarding his or her personal liability.

Section 2 of the bill provides that the bill would become effective
immediately, but shall apply to amounts that become due in the quarter
after the effective date of the bill.

 JUSTIFICATION :

Currently corporate officers, members or managers of limited liability
companies, and limited partners cannot be held personally liable for
unpaid UI contributions. Based on historical patterns, approximately
$35 million per year in unpaid UI contributions is assigned inactive
collection status due to the inability to collect from out-of-business
corporations, limited liability companies, and partnerships who
abandon their debt. The ability to collect against corporate officers,
members or managers of limited liability companies, and certain
partners would significantly decrease this amount and have a positive
effect on the UI Trust Fund.

The bill would also serve as a deterrent against unscrupulous
employers who evade paying their fair share of UI contributions by
closing a business and setting up a new corporation, limited liability
company, or partnership.

 LEGISLATIVE HISTORY :

This is a new bill.

 FISCAL IMPLICATIONS :

The enhanced collection authority set forth in this bill would result
in an increase in UI Trust Fund revenues. The ability to collect
against the individuals covered by this bill would result in an
estimated increase of up to $20 million per year in UI contributions.

 EFFECTIVE DATE :
Immediately.

2015-S7268 (ACTIVE) - Bill Text download pdf

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

                                  7268

                            I N  S E N A T E

                             April 12, 2016
                               ___________

Introduced by Sen. MARTINS -- (at request of the Department of Labor) --
  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 unemployment insurance

  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 a new section 573-a to
read as follows:
  S 573-A. PERSONAL LIABILITY FOR CONTRIBUTIONS, PENALTIES AND  INTEREST
REGARDING  CORPORATIONS,  LIMITED LIABILITY COMPANIES, AND PARTNERSHIPS.
1. FOR PURPOSES OF THIS SECTION, THE TERM "PERSON" SHALL MEAN:  (A)  ANY
OFFICER OF A CORPORATION; (B) ANY MANAGER OR MEMBER OF A LIMITED LIABIL-
ITY  COMPANY  FORMED  UNDER THE LIMITED LIABILITY COMPANY LAW OR SIMILAR
STATUTES IN OTHER STATES OR COUNTRIES, WHO HAS AN OWNERSHIP INTEREST  IN
OR  MANAGEMENT AUTHORITY OVER THE LIMITED LIABILITY COMPANY; AND (C) ALL
PARTNERS UNDER THE PARTNERSHIP LAW INCLUDING: (I) GENERAL  PARTNERS  AND
(II)  ANY  LIMITED PARTNERS TO THE EXTENT THAT SUCH LIMITED PARTNERS ARE
LIABLE TO THIRD PARTIES UNDER THE PARTNERSHIP LAW.
  2. NOTWITHSTANDING ANY OTHER  PROVISION  OF  LAW,  IF  A  CORPORATION,
LIMITED  LIABILITY  COMPANY  OR  PARTNERSHIP HAS FAILED TO MAKE EMPLOYER
CONTRIBUTIONS AS REQUIRED BY THIS ARTICLE, OR HAS FAILED TO  FILE  QUAR-
TERLY  COMBINED  WITHHOLDING,  WAGE REPORTING AND UNEMPLOYMENT INSURANCE
RETURNS AS REQUIRED BY PARAGRAPH FOUR OF SUBSECTION (A) OF  SECTION  SIX
HUNDRED  SEVENTY-FOUR  OF  THE TAX LAW, ALL PERSONS SHALL BE JOINTLY AND
SEVERALLY  LIABLE  FOR  THE  TOTAL  AMOUNT  OF  SUCH  CONTRIBUTIONS  NOT
COLLECTED,  PENALTIES  AND  ANY INTEREST ACCRUING THEREON.  SUCH PERSONS
SHALL BE CONSIDERED EMPLOYERS FOR PURPOSES  OF  COLLECTING  AMOUNTS  DUE
PURSUANT  TO THIS SUBDIVISION PURSUANT TO THE PROVISIONS OF THIS ARTICLE
AND OTHER PROVISIONS OF LAW. THE LIABILITY OF ANY PERSON  SHALL  NOT  BE
RELIEVED BY THE DISSOLUTION OF THE CORPORATION, LIMITED LIABILITY COMPA-
NY OR PARTNERSHIP.
  3.  THE  COMMISSIONER,  AFTER ISSUING A DETERMINATION THAT A PERSON IS
LIABLE FOR AMOUNTS DUE UNDER SUBDIVISION TWO THIS SECTION, SHALL PROVIDE
NOTICE OF THE BASIS FOR PERSONAL LIABILITY AND THE TOTAL AMOUNT DUE  AND

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

                                                           LBD14152-01-6

S. 7268                             2

UNPAID  BY SUCH CORPORATION, LIMITED LIABILITY COMPANY OR PARTNERSHIP IN
SUCH DETERMINATION.
  4.  A  PERSON  DETERMINED  TO  BE PERSONALLY LIABLE UNDER THIS SECTION
SHALL HAVE ALL RIGHTS OF APPEAL SET FORTH IN TITLE EIGHT OF THIS ARTICLE
SOLELY WITH RESPECT TO SUCH DETERMINATION OF HIS OR HER PERSONAL LIABIL-
ITY.
  S 2. This act shall  take  effect  immediately,  but  shall  apply  to
amounts that become due for the quarter after such effective date.

Comments

Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.

Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Find your Senator and share your views on important issues.

Do you support this bill?

Senate Bill S7268

Sponsored By

Archive: Last Bill Status - In Senate Committee Labor Committee

Actions

2015-S7268 (ACTIVE) - Details

2015-S7268 (ACTIVE) - Summary

2015-S7268 (ACTIVE) - Sponsor Memo

2015-S7268 (ACTIVE) - Bill Text download pdf

Comments

Do you support this bill?

Get Status Alerts for 2015-S7268

Senate Bill S7268

Share this bill

Sponsored By

Jack M. Martins

Archive: Last Bill Status - In Senate Committee Labor Committee

Actions

2015-S7268 (ACTIVE) - Details

2015-S7268 (ACTIVE) - Summary

2015-S7268 (ACTIVE) - Sponsor Memo

2015-S7268 (ACTIVE) - Bill Text download pdf

Comments