NY State Senate Bill 2019-S6468

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

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to labor
Jun 12, 2019	referred to rules

2019-S6468 (ACTIVE) - Details

Current Committee:: Senate Labor
Law Section:: Labor Law
Laws Affected:: Add §573-a, Lab L

2019-S6468 (ACTIVE) - Summary

Relates to personal liability for certain contributions, penalties and interest regarding corporations, limited liability companies and partnerships; defines terms; provides that if a corporation, limited liability company or partnership fails to make employer contributions or fails to file quarterly combined withholding, wage reporting and unemployment insurance returns, all persons shall be jointly and severally liable for the total amount of such contributions not collected, penalties and any interest accruing thereon owed by their corporation, limited liability company or partnership.

2019-S6468 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S6468

SPONSOR: RAMOS
 
TITLE OF BILL:  An act to amend the labor law, in relation to personal
liability for certain contributions, penalties and interest

 
PURPOSE OF THE BILL:

The purpose of this bill is to amend the Labor Law to make corporate
officers, members and managers of limited liability companies ("LLCs"),
general partners, and limited partners personally liable for unpaid
unemployment insurance ("ur") contributions.

 
SUMMARY OF PROVISIONS:

Section 1 of this bill would add a new § 573-a to the Labor Law to
impose personal liability for unpaid UI contributions 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 part-
ners of partnerships to the extent that such limited partners are liable

to third parties under the Partnership Law. The liability of such indi-
viduals may not be relieved by the dissolution of the corporation,
limited liability company, or partnership. Any person determined to be
personally liable under this section would have rights of appeal.

Section 2 of this bill make it would take effect immediately but shall
apply to amounts that become due for the quarter after such effective
date.

 
JUSTIFICATION:

Under current law, the Department can hold corporations, sole proprie-
tors, and some partners liable for unpaid UI contributions, but does not
have authority to hold officers of such corporations or members of LLCs
individually liable.

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 outof-business corporations, LLCs, 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. Extending this liability would
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 bill was introduced in both houses in 2016 (A.10443 / S3268;
Departmental Bill   112) but did not pass either house.

 
FISCAL IMPLICATIONS:

No fiscal support would be required to implement this bill. The enhanced
UI collection authority would result in an increase in UI Trust Fund
revenues (an estimated increase of up to $20 million per year in UI
contributions).
 
EFFECTIVE DATE:
This bill would take effect immediately but shall apply to amounts that
become due for the quarter after such effective date.

2019-S6468 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6468
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               June 12, 2019
                                ___________
 
 Introduced  by  Sen. RAMOS -- (at request of the Department of Labor) --
   read twice and ordered printed, and when printed to  be  committed  to
   the Committee on Rules
 
 AN  ACT  to  amend  the labor law, in relation to personal liability for
   certain contributions, penalties and interest

   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:
   § 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  OWED  BY  THEIR
 CORPORATION,  LIMITED  LIABILITY  COMPANY  OR  PARTNERSHIP. 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD09184-01-9

 S. 6468                             2
 
 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  OF  THIS  SECTION,  SHALL
 PROVIDE  NOTICE OF THE BASIS FOR PERSONAL LIABILITY AND THE TOTAL AMOUNT
 DUE AND UNPAID BY SUCH CORPORATION, LIMITED LIABILITY COMPANY  OR  PART-
 NERSHIP 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.
   § 2. This act shall take effect immediately and shall apply to amounts
 that become due for the quarterly period after the date this  act  shall
 have become a law.

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Senate Bill S6468

Sponsored By

Archive: Last Bill Status - In Senate Committee Labor Committee

2019-S6468 (ACTIVE) - Details

2019-S6468 (ACTIVE) - Summary

2019-S6468 (ACTIVE) - Sponsor Memo

2019-S6468 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S6468

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Sponsored By

Jessica Ramos

Archive: Last Bill Status - In Senate Committee Labor Committee

2019-S6468 (ACTIVE) - Details

2019-S6468 (ACTIVE) - Summary

2019-S6468 (ACTIVE) - Sponsor Memo

2019-S6468 (ACTIVE) - Bill Text download pdf

Comments