S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7539
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                               June 5, 2023
                                ___________
 
 Introduced  by  Sen.  RAMOS  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the civil practice law and rules, in relation to grounds
   for attachment; to amend the business corporation law, in relation  to
   streamlining  procedures where employees may hold shareholders of non-
   publicly traded corporations personally  liable  for  wage  theft;  to
   amend  the  limited  liability  company law, in relation to creating a
   right for victims of wage theft to hold the ten members with the larg-
   est ownership interests in a company personally liable for wage theft;
   and to amend the labor law, in relation to penalties for certain  wage
   violations
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 5 of section 6201 of the civil practice law and
 rules, as amended by chapter 860 of the laws of 1977 and  as  renumbered
 by  chapter  618 of the laws of 1992, is amended and a new subdivision 6
 is added to read as follows:
   5. the cause of action is based on a judgment, decree or  order  of  a
 court  of  the  United States or of any other court which is entitled to
 full faith and credit in this state, or on a  judgment  which  qualifies
 for  recognition  under the provisions of article 53[.] OF THIS CHAPTER;
 OR
   6. THE CAUSE OF ACTION IS BASED ON WAGE CLAIMS.  "WAGE  CLAIMS,"  WHEN
 USED IN THIS CHAPTER, SHALL INCLUDE ANY CLAIMS OF VIOLATIONS OF ARTICLES
 FIVE, SIX, AND NINETEEN OF THE LABOR LAW, SECTION TWO HUNDRED FIFTEEN OF
 THE LABOR LAW, AND THE RELATED REGULATIONS OR WAGE ORDERS PROMULGATED BY
 THE  COMMISSIONER  OF  LABOR, INCLUDING BUT NOT LIMITED TO ANY CLAIMS OF
 UNPAID, MINIMUM, OVERTIME, AND SPREAD-OF-HOURS PAY, UNLAWFULLY  RETAINED
 GRATUITIES,  UNLAWFUL  DEDUCTIONS FROM WAGES, UNPAID COMMISSIONS, UNPAID
 BENEFITS AND WAGE SUPPLEMENTS, AND RETALIATION, AND ANY CLAIMS  PURSUANT
 TO 18 U.S.C. § 1595, 29 U.S.C. § 201 ET SEQ., AND/OR EMPLOYMENT CONTRACT
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11736-01-3
              

 S. 7539                             2
 
 AS  WELL  AS THE CONCOMITANT LIQUIDATED DAMAGES AND PENALTIES AUTHORIZED
 PURSUANT TO THE LABOR LAW, THE FAIR LABOR STANDARDS ACT, OR ANY  EMPLOY-
 MENT CONTRACT.
   §  2.  Section  6210  of the civil practice law and rules, as added by
 chapter 860 of the laws of 1977, is amended to read as follows:
   § 6210. Order of attachment on notice;  temporary  restraining  order;
 contents.  Upon a motion on notice for an order of attachment, the court
 may, without notice to the  defendant,  grant  a  temporary  restraining
 order  prohibiting  the transfer of assets by a garnishee as provided in
 subdivision (b) of section 6214. WHEN ATTACHMENT IS SOUGHT  PURSUANT  TO
 SUBDIVISION  SIX  OF  SECTION  6201,  AND  IF  THE EMPLOYER CONTESTS THE
 MOTION, THE COURT SHALL HOLD A HEARING  WITHIN  TEN  DAYS  OF  WHEN  THE
 EMPLOYER'S  RESPONSE  TO  PLAINTIFFS'  MOTION FOR ATTACHMENT IS DUE. The
 contents of the order of attachment granted  pursuant  to  this  section
 shall be as provided in subdivision (a) of section 6211.
   §  3.  Subdivision  (b)  of section 6211 of the civil practice law and
 rules, as amended by chapter 566 of the laws of 1985, is amended to read
 as follows:
   (b) Confirmation of order. Except where  an  order  of  attachment  is
 granted  on  the  ground  specified in subdivision one OR SIX of section
 6201, an order of attachment granted without notice shall  provide  that
 within  a period not to exceed five days after levy, the plaintiff shall
 move, on such notice as the court shall direct  to  the  defendant,  the
 garnishee, if any, and the sheriff, for an order confirming the order of
 attachment.  Where  an  order of attachment without notice is granted on
 the ground specified in subdivision one OR  SIX  of  section  6201,  the
 court shall direct that the statement required by section 6219 be served
 within  five days, that a copy thereof be served upon the plaintiff, and
 the plaintiff shall move  within  ten  days  after  levy  for  an  order
 confirming  the  order  of attachment. If the plaintiff upon such motion
 shall show that the statement has not been served and that the plaintiff
 will be unable to satisfy the requirement of subdivision (b) of  section
 6223 until the statement has been served, the court may grant one exten-
 sion of the time to move for confirmation for a period not to exceed ten
 days. If plaintiff fails to make such motion within the required period,
 the  order  of  attachment and any levy thereunder shall have no further
 effect and shall be vacated upon motion. Upon the motion to confirm, the
 provisions of subdivision (b) of section 6223 shall apply. An  order  of
 attachment  granted  without notice may provide that the sheriff refrain
 from taking any property levied upon into his  OR  HER  actual  custody,
 pending further order of the court.
   §  4.  Subdivisions (b) and (e) of rule 6212 of the civil practice law
 and rules, subdivision (b) as separately amended by chapters 15 and  860
 of  the  laws of 1977 and subdivision (e) as added by chapter 860 of the
 laws of 1977, are amended to read as follows:
   (b) Undertaking. [On] 1. EXCEPT WHERE AN ORDER OF ATTACHMENT IS SOUGHT
 ON THE GROUND SPECIFIED IN SUBDIVISION SIX OF SECTION 6201, ON a  motion
 for  an order of attachment, the plaintiff shall give an undertaking, in
 a total amount fixed by the  court,  but  not  less  than  five  hundred
 dollars,  a  specified part thereof conditioned that the plaintiff shall
 pay to the defendant all costs and damages, including reasonable  attor-
 ney's  fees,  which  may be sustained by reason of the attachment if the
 defendant recovers judgment or if it is finally decided that the  plain-
 tiff  was not entitled to an attachment of the defendant's property, and
 the balance conditioned that the plaintiff shall pay to the sheriff  all
 of his OR HER allowable fees.
 S. 7539                             3
 
   2.  ON  A  MOTION  FOR  AN  ATTACHMENT  PURSUANT TO SUBDIVISION SIX OF
 SECTION 6201, THE COURT SHALL ORDER THAT THE PLAINTIFF GIVE AN  ACCESSI-
 BLE UNDERTAKING OF NO MORE THAN FIVE HUNDRED DOLLARS, OR IN THE ALTERNA-
 TIVE,  MAY WAIVE THE UNDERTAKING ALTOGETHER. The attorney for the plain-
 tiff shall not be liable to the sheriff for such fees. The surety on the
 undertaking shall not be discharged except upon notice to the sheriff.
   (e)  Damages.  [The]  EXCEPT WHERE AN ORDER OF ATTACHMENT IS SOUGHT ON
 THE GROUND SPECIFIED IN SUBDIVISION SIX OF SECTION 6201,  THE  plaintiff
 shall  be  liable  to the defendant for all costs and damages, including
 reasonable attorney's fees, which may be  sustained  by  reason  of  the
 attachment  if  the  defendant  recovers  judgment,  or if it is finally
 decided that the plaintiff was not entitled  to  an  attachment  of  the
 defendant's  property. Plaintiff's liability shall not be limited by the
 amount of the undertaking.
   § 5. Paragraph (b) of section 624 of the business corporation law,  as
 amended  by  chapter  449  of  the  laws  of 1997, is amended to read as
 follows:
   (b) Any person who shall have been a shareholder of record of a corpo-
 ration, OR WHO IS OR SHALL HAVE BEEN A  LABORER,  SERVANT  OR  EMPLOYEE,
 upon  at least five days' written demand shall have the right to examine
 in person or by agent or attorney,  during  usual  business  hours,  its
 minutes  of the proceedings of its shareholders and record of sharehold-
 ers and to make extracts therefrom for any purpose reasonably related to
 such person's interest as a shareholder, LABORER, SERVANT  OR  EMPLOYEE,
 PROVIDED  THE  PURPOSE  REASONABLY  RELATED  TO A PERSON'S INTEREST AS A
 LABORER, SERVANT OR EMPLOYEE SHALL BE TO OBTAIN  THE  NAMES,  ADDRESSES,
 AND  VALUE  OF  SHAREHOLDERS'  INTERESTS  IN THE CORPORATION. Holders of
 voting trust certificates representing shares of the  corporation  shall
 be  regarded  as shareholders for the purpose of this section.  Any such
 agent or attorney shall be authorized in a writing  that  satisfies  the
 requirements  of a writing under paragraph (b) of section 609 (Proxies).
 A corporation requested to provide information pursuant  to  this  para-
 graph  shall  make available such information in written form and in any
 other format in which such information is maintained by the  corporation
 and  shall  not  be  required  to  provide such information in any other
 format. If a request made pursuant to this paragraph includes a  request
 to  furnish  information  regarding  beneficial  owners, the corporation
 shall make available such information in its possession regarding  bene-
 ficial  owners  as is provided to the corporation by a registered broker
 or dealer or a bank, association or other entity that exercises  fiduci-
 ary  powers  in  connection  with  the forwarding of information to such
 owners. The corporation shall not  be  required  to  obtain  information
 about beneficial owners not in its possession.
   §  6.  Section  630  of the business corporation law, paragraph (a) as
 amended by chapter 5 of the laws of 2016, paragraph (c)  as  amended  by
 chapter 746 of the laws of 1963, is amended to read as follows:
 § 630. Liability  of shareholders for wages due to laborers, servants or
          employees.
   (a) The ten largest shareholders, as determined by the fair  value  of
 their beneficial interest as of the beginning of the period during which
 the  unpaid services referred to in this section are performed, of every
 domestic corporation or of any  foreign  corporation,  when  the  unpaid
 services were performed in the state, no shares of which are listed on a
 national  securities exchange or regularly quoted in an over-the-counter
 market by one or more members of a national or an affiliated  securities
 association,  shall  jointly  and severally be personally liable for all
 S. 7539                             4
 
 debts, wages or salaries due and owing to any of its laborers,  servants
 or  employees other than contractors, for services performed by them for
 such corporation. [Before such laborer, servant or employee shall charge
 such  shareholder  for such services, he shall give notice in writing to
 such shareholder that he intends to hold him liable under this  section.
 Such  notice  shall  be  given  within one hundred and eighty days after
 termination of such services, except that if, within  such  period,  the
 laborer,  servant  or  employee  demands an examination of the record of
 shareholders under paragraph (b) of  section  624  (Books  and  records;
 right  of inspection, prima facie evidence) of this article, such notice
 may be given within sixty days after he has been given  the  opportunity
 to examine the record of shareholders. An action to enforce such liabil-
 ity  shall  be  commenced  within  ninety  days  after  the return of an
 execution unsatisfied against the corporation upon a judgment  recovered
 against  it  for  such services.] The provisions of this paragraph shall
 not apply to an investment company registered as such under  an  act  of
 congress entitled "Investment Company Act of 1940."
   (b) For the purposes of this section, wages or salaries shall mean all
 compensation  and  benefits payable by an employer to or for the account
 of the employee for personal services rendered by such employee  INCLUD-
 ING  ANY CONCOMITANT LIQUIDATED DAMAGES, PENALTIES, INTEREST, ATTORNEY'S
 FEES OR COSTS.  These shall specifically include but not be  limited  to
 salaries,  overtime,  vacation,  holiday  and  severance  pay;  employer
 contributions to or payments of insurance or welfare benefits;  employer
 contributions to pension or annuity funds; and any other moneys properly
 due or payable for services rendered by such employee.
   (c)  A  shareholder  who  has paid more than his OR HER pro rata share
 under this section shall be entitled to contribution pro rata  from  the
 other  shareholders liable under this section with respect to the excess
 so paid, over and above his OR HER pro rata  share,  and  may  sue  them
 jointly  or  severally  or  any number of them to recover the amount due
 from them.  Such recovery may be had in a separate action.  As  used  in
 this  paragraph,  "pro  rata"  means  in  proportion to beneficial share
 interest. Before a shareholder may claim contribution from other  share-
 holders  under  this  paragraph, he OR SHE shall[, unless they have been
 given notice by a laborer, servant or  employee  under  paragraph  (a),]
 give  them  notice  in  writing  that  he OR SHE intends to hold them so
 liable to him OR HER. Such notice shall be given by him  OR  HER  within
 twenty  days  after the date that [notice was given to him by] HE OR SHE
 BECAME AWARE THAT a laborer, servant or employee MAY SEEK TO HOLD HIM OR
 HER LIABLE under paragraph (a).
   § 7. Subdivision (c) of section 609 of the limited  liability  company
 law,  as  amended by chapter 620 of the laws of 2019, is amended to read
 as follows:
   (c) Notwithstanding the provisions of subdivisions (a) and (b) of this
 section, the ten members with the largest percentage ownership interest,
 as determined as of the beginning of the period during which the  unpaid
 services  referred  to  in this section are performed, of every domestic
 limited liability company, or of any foreign limited liability  company,
 when  the unpaid services were performed in the state, shall jointly and
 severally be personally liable for all debts, wages or salaries due  and
 owing  to  any  of  its  laborers,  servants  or employees, for services
 performed by them for  such  limited  liability  company.  [Before  such
 laborer, servant or employee shall charge such member for such services,
 he  or  she  shall  give notice in writing to such member that he or she
 intends to hold such member liable under this section. Such notice shall
 S. 7539                             5

 be given within one  hundred  eighty  days  after  termination  of  such
 services.  An action to enforce such liability shall be commenced within
 ninety days after the return of an  execution  unsatisfied  against  the
 limited  liability company upon a judgment recovered against it for such
 services.] A member who has paid more than his or  her  pro  rata  share
 under  this  section shall be entitled to contribution pro rata from the
 other members liable under this section with respect to  the  excess  so
 paid, over and above his or her pro rata share, and may sue them jointly
 or  severally or any number of them to recover the amount due from them.
 Such recovery may be had in a separate action. As used in this  subdivi-
 sion,  "pro  rata" means in proportion to percentage ownership interest.
 Before a member may claim contribution from  other  members  under  this
 section,  he  or  she  shall  give them notice in writing that he or she
 intends to hold them so liable to him or her.
   § 8. Section 1102 of the limited liability company law is  amended  by
 adding a new subdivision (e) to read as follows:
   (E) ANY PERSON WHO IS OR SHALL HAVE BEEN A LABORER, SERVANT OR EMPLOY-
 EE  OF  A  LIMITED  LIABILITY  COMPANY, UPON AT LEAST FIVE DAYS' WRITTEN
 DEMAND SHALL HAVE THE RIGHT TO EXAMINE IN PERSON OR BY AGENT  OR  ATTOR-
 NEY,  DURING USUAL BUSINESS HOURS, RECORDS DESCRIBED IN PARAGRAPH TWO OF
 SUBDIVISION (A) OF THIS SECTION THROUGHOUT THE  PERIOD  OF  TIME  DURING
 WHICH SUCH LABORER, SERVANT OR EMPLOYEE PROVIDED SERVICES TO SUCH COMPA-
 NY. A COMPANY REQUESTED TO PROVIDE INFORMATION PURSUANT TO THIS SUBDIVI-
 SION  SHALL MAKE AVAILABLE SUCH RECORDS IN WRITTEN FORM AND IN ANY OTHER
 FORMAT IN WHICH SUCH INFORMATION IS MAINTAINED BY THE COMPANY AND  SHALL
 NOT  BE  REQUIRED TO PROVIDE SUCH INFORMATION IN ANY OTHER FORMAT.  UPON
 REFUSAL BY THE COMPANY OR BY AN OFFICER  OR  AGENT  OF  THE  COMPANY  TO
 PERMIT  AN  INSPECTION OF THE RECORDS DESCRIBED IN THIS SUBDIVISION, THE
 PERSON MAKING THE DEMAND FOR INSPECTION MAY APPLY TO THE  SUPREME  COURT
 IN  THE  JUDICIAL  DISTRICT  WHERE THE OFFICE OF THE COMPANY IS LOCATED,
 UPON SUCH NOTICE AS THE COURT MAY DIRECT, FOR  AN  ORDER  DIRECTING  THE
 COMPANY,  ITS  MEMBERS OR MANAGERS TO SHOW CAUSE WHY AN ORDER SHOULD NOT
 BE GRANTED PERMITTING SUCH INSPECTION BY THE APPLICANT.  UPON THE RETURN
 DAY OF THE ORDER TO SHOW CAUSE, THE COURT SHALL HEAR THE PARTIES SUMMAR-
 ILY, BY AFFIDAVIT OR OTHERWISE, AND IF IT APPEARS THAT THE APPLICANT  IS
 QUALIFIED  AND  ENTITLED  TO  SUCH  INSPECTION, THE COURT SHALL GRANT AN
 ORDER COMPELLING SUCH INSPECTION AND AWARDING SUCH FURTHER RELIEF AS  TO
 THE  COURT  MAY  SEEM  JUST  AND PROPER. IF THE APPLICANT IS FOUND TO BE
 QUALIFIED AND ENTITLED TO SUCH INSPECTION, THE  COMPANY  SHALL  PAY  ALL
 REASONABLE  ATTORNEY'S  FEES  AND COSTS OF SAID APPLICANT RELATED TO THE
 DEMAND FOR INSPECTION OF THE RECORDS.
   § 9. Subdivision 5 of section 218 of the labor law, as added by  chap-
 ter 537 of the laws of 2014, is amended to read as follows:
   5.  An employer similar in operation and ownership to a prior employer
 which had been found in violation of article six, nineteen or nineteen-A
 of this chapter, shall be deemed the same employer for the  purposes  of
 this  section AND ARTICLES SIX, NINETEEN, AND NINETEEN-A OF THIS CHAPTER
 if the employees of the new employer are engaged  in  substantially  the
 same  work  in  substantially the same working conditions under substan-
 tially the same supervisors, or if the subsequent employer has  substan-
 tially  the  same  production  process,  produces substantially the same
 products and has substantially the same body of customers.  Such  subse-
 quent  employer  shall continue to be subject to this section and liable
 for the acts of the prior employer under this section.
   § 10. Subdivision 4 of section 219 of the labor law, as added by chap-
 ter 537 of the laws of 2014, is amended to read as follows:
 S. 7539                             6
 
   4. An employer similar in operation and ownership to a prior  employer
 found  to be in violation of article six, nineteen or nineteen-A of this
 chapter, shall be deemed the same employer  for  the  purposes  of  this
 section  AND  ARTICLES  SIX, NINETEEN, NINETEEN-A OF THIS CHAPTER if the
 employees  of  the  subsequent employer are engaged in substantially the
 same work in substantially the same working  conditions  under  substan-
 tially  the same supervisors, or if the new entity has substantially the
 same production process, produces substantially the  same  products  and
 has substantially the same body of customers. Such a subsequent employer
 will  continue to be subject to this section and shall be liable for the
 acts of the prior employer under this section.
   § 11. This act shall take effect on the thirtieth day after  it  shall
 have become a law.  The procedures and rights created in this act may be
 used  by  employees,  laborers or servants in connection with claims for
 liabilities that arose prior to the effective date of this act.