S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10725
 
                           I N  A S S E M B L Y
 
                               May 15, 2018
                                ___________
 
 Introduced  by M. of A. BRONSON -- read once and referred to the Commit-
   tee on Labor
 
 AN ACT to amend the labor law, in relation to the payment of 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:
   §  196-B.  DEFINITIONS  RELATING  TO  INDEPENDENT  CONTRACTORS.    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.
   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-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD15891-01-8

 A. 10725                            2
 
 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.
   §  196-C.  PAYMENT  OF  INDEPENDENT  CONTRACTORS.  1.  AN  INDEPENDENT
 CONTRACTOR SHALL BE PAID THE COMPENSATION EARNED IN ACCORDANCE WITH  THE
 AGREED  WORK  TERMS.    IF  AN INDEPENDENT CONTRACTOR AND CLIENT DID NOT
 AGREE ON A DATE FOR PAYMENT  OF  COMPENSATION  EARNED,  THE  INDEPENDENT
 CONTRACTOR SHALL BE PAID THE COMPENSATION EARNED 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  INDEPENDENT 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 PAYABLE SHALL BE CALCULATED. THE FAILURE OF
 A CLIENT TO PRODUCE SUCH WRITTEN WORK TERMS, UPON REQUEST OF THE COMMIS-
 SIONER, SHALL GIVE RISE TO A PRESUMPTION THAT THE TERMS THAT  THE  INDE-
 PENDENT 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

 A. 10725                            3
 
 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.
   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.
   § 2. This act shall take effect immediately.