Bill Text: NY A06698 | 2011-2012 | General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relates to payment of independent contractors and authorizes the department of labor to investigate complaints, make claims for compensation, assess liquid damages, civil penalties and criminal penalties; authorizes the award of attorney fees and liquidated damages; excludes construction contractors.

Spectrum: Partisan Bill (Democrat 26-0)

Status: (Engrossed - Dead) 2012-06-21 - REFERRED TO RULES [A06698 Detail]

Download: New_York-2011-A06698-Amended.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                        6698--C
                                                               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 -- again amended on
         third reading, 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:
    1    Section 1. The labor law is amended by adding two new  sections  196-b
    2  and 196-c to read as follows:
    3    S  196-B.  DEFINITIONS.  FOR  PURPOSES OF THIS SECTION AND SECTION ONE
    4  HUNDRED NINETY-SIX-C OF THIS ARTICLE, THE TERM:
    5    1. "COMPENSATION" MEANS THE EARNINGS  OF  AN  INDEPENDENT  CONTRACTOR.
    6  THE TERM "COMPENSATION" ALSO INCLUDES REIMBURSEMENT FOR EXPENSES.
    7    2.  "INDEPENDENT  CONTRACTOR"  MEANS  A  SOLE PROPRIETOR WHO IS NOT AN
    8  EMPLOYEE AND WHO IS HIRED OR RETAINED BY A CLIENT FOR AN AMOUNT EQUAL TO
    9  OR  GREATER  THAN  SIX  HUNDRED  DOLLARS;  BUT  SHALL  NOT   INCLUDE   A
   10  CONSTRUCTION CONTRACTOR.
   11    3.  "CLIENT"  INCLUDES A CORPORATION, LIMITED LIABILITY COMPANY, PART-
   12  NERSHIP, ASSOCIATION OR NON-PROFITMAKING ORGANIZATION  CONTRACTING  WITH
   13  AN  INDEPENDENT  CONTRACTOR IN ANY OCCUPATION, INDUSTRY, TRADE, BUSINESS
   14  OR SERVICE FOR  COMPENSATION  EQUAL  TO  OR  GREATER  THAN  SIX  HUNDRED
   15  DOLLARS.    THE  TERM  "CLIENT" SHALL NOT INCLUDE A GOVERNMENTAL ENTITY,
   16  INCLUDING BUT NOT LIMITED TO, ANY AGENCY, BOARD, DEPARTMENT,  COMMISSION
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD10169-10-2
       A. 6698--C                          2
    1  OF  THE STATE OR ANY POLITICAL SUBDIVISION THEREOF; AND CLIENT SHALL NOT
    2  INCLUDE A PERSON.
    3    4.  "CONSTRUCTION CONTRACTOR" MEANS ANY PERSON, SOLE PROPRIETOR, PART-
    4  NERSHIP, FIRM, CORPORATION, LIMITED LIABILITY  COMPANY,  ASSOCIATION  OR
    5  OTHER LEGAL ENTITY WHO BY ONESELF OR THROUGH OTHERS OFFERS TO UNDERTAKE,
    6  OR  HOLDS  ONESELF  OUT  AS BEING ABLE TO UNDERTAKE, OR DOES UNDERTAKE A
    7  CONSTRUCTION PROJECT.
    8    5.  "CONSTRUCTION  PROJECT"  MEANS  THE  PROVIDING  OF  ANY  LABOR  OR
    9  SERVICES,  AND  THE USE OF ANY MATERIALS OR EQUIPMENT IN ORDER TO ALTER,
   10  BUILD, EXCAVATE, ADD TO, SUBTRACT FROM, IMPROVE, REPAIR, MAINTAIN, RENO-
   11  VATE, MOVE, WRECK OR DEMOLISH ANY BRIDGE, BUILDING, HIGHWAY, ROAD, RAIL-
   12  ROAD, LAND, TUNNEL, SEWER, DRAINAGE OR OTHER STRUCTURE, PROJECT,  DEVEL-
   13  OPMENT,  OR IMPROVEMENT, OR THE DOING OF ANY PART THEREOF, INCLUDING THE
   14  ERECTION OF SCAFFOLDING OR OTHER STRUCTURES OR WORKS IN CONNECTION THER-
   15  EWITH.
   16    S  196-C.  PAYMENT  OF  INDEPENDENT  CONTRACTORS.  1.  AN  INDEPENDENT
   17  CONTRACTOR  SHALL BE PAID THE COMPENSATION EARNED IN ACCORDANCE WITH THE
   18  AGREED WORK TERMS.   IF AN INDEPENDENT CONTRACTOR  AND  CLIENT  DID  NOT
   19  AGREE  ON  A  DATE  FOR  PAYMENT OF COMPENSATION EARNED, THE INDEPENDENT
   20  CONTRACTOR SHALL BE PAID THE COMPENSATION EARNED NOT LATER THAN THE LAST
   21  DAY OF THE MONTH FOLLOWING  THE  MONTH  IN  WHICH  THE  COMPENSATION  IS
   22  EARNED.    THE  AGREED WORK TERMS SHALL BE REDUCED IN WRITING, SIGNED BY
   23  BOTH THE CLIENT AND THE INDEPENDENT CONTRACTOR,  KEPT  ON  FILE  BY  THE
   24  CLIENT FOR A PERIOD OF NOT LESS THAN SIX YEARS AND MADE AVAILABLE TO THE
   25  COMMISSIONER  UPON  REQUEST. SUCH WRITING SHALL INCLUDE A DESCRIPTION OF
   26  HOW COMPENSATION EARNED AND PAYABLE SHALL BE CALCULATED. THE FAILURE  OF
   27  A CLIENT TO PRODUCE SUCH WRITTEN WORK TERMS, UPON REQUEST OF THE COMMIS-
   28  SIONER,  SHALL  GIVE RISE TO A PRESUMPTION THAT THE TERMS THAT THE INDE-
   29  PENDENT CONTRACTOR HAS PRESENTED ARE THE AGREED TERMS.
   30    2. THE COMMISSIONER SHALL INVESTIGATE AND ATTEMPT TO ADJUST  EQUITABLY
   31  CONTROVERSIES  BETWEEN  CLIENTS  AND INDEPENDENT CONTRACTORS RELATING TO
   32  THIS SECTION.
   33    3. THE COMMISSIONER MAY TAKE ASSIGNMENTS OF CLAIMS FOR COMPENSATION AS
   34  DEFINED IN SECTION ONE HUNDRED NINETY-SIX-B OF THIS ARTICLE  FROM  INDE-
   35  PENDENT  CONTRACTORS  OR  THIRD  PARTIES  IN  TRUST FOR SUCH INDEPENDENT
   36  CONTRACTORS OR FOR THE VARIOUS FUNDS FOR SUCH  INDEPENDENT  CONTRACTORS.
   37  ALL  SUCH ASSIGNMENTS SHALL RUN TO THE COMMISSIONER AND HIS SUCCESSOR IN
   38  OFFICE. THE COMMISSIONER MAY SUE CLIENTS  ON  COMPENSATION  CLAIMS  THUS
   39  ASSIGNED.  HE  MAY  JOIN  IN  A SINGLE ACTION ANY NUMBER OF COMPENSATION
   40  CLAIMS AGAINST THE SAME COMPANY.
   41    4. ANY  INDEPENDENT  CONTRACTOR  MAY  FILE  WITH  THE  COMMISSIONER  A
   42  COMPLAINT  REGARDING A VIOLATION OF THIS ARTICLE FOR AN INVESTIGATION OF
   43  SUCH COMPLAINT AND STATEMENT SETTING THE  APPROPRIATE  REMEDY,  IF  ANY.
   44  FAILURE  OF A CLIENT TO KEEP ADEQUATE RECORDS SHALL NOT OPERATE AS A BAR
   45  TO FILING OF A COMPLAINT BY AN INDEPENDENT CONTRACTOR.  IN SUCH  A  CASE
   46  THE  CLIENT  IN  VIOLATION  SHALL  BEAR  THE  BURDEN OF PROVING THAT THE
   47  COMPLAINING INDEPENDENT CONTRACTOR WAS PAID COMPENSATION.
   48    5. ON BEHALF OF ANY INDEPENDENT CONTRACTOR PAID LESS THAN THE  COMPEN-
   49  SATION  TO WHICH HE OR SHE IS ENTITLED UNDER THE AGREED WORK TERMS UNDER
   50  THE PROVISIONS OF THIS ARTICLE, THE COMMISSIONER  MAY  BRING  ANY  LEGAL
   51  ACTION NECESSARY, INCLUDING ADMINISTRATIVE ACTION, TO COLLECT SUCH CLAIM
   52  AND  AS PART OF SUCH LEGAL ACTION, IN ADDITION TO ANY OTHER REMEDIES AND
   53  PENALTIES OTHERWISE AVAILABLE UNDER THIS ARTICLE, THE COMMISSIONER SHALL
   54  ASSESS AGAINST THE CLIENT AN ADDITIONAL AMOUNT  AS  LIQUIDATED  DAMAGES,
   55  UNLESS  THE  CLIENT  PROVES  A  GOOD  FAITH BASIS FOR BELIEVING THAT ITS
   56  UNDERPAYMENT OF COMPENSATION WAS IN COMPLIANCE WITH THE LAW.  LIQUIDATED
       A. 6698--C                          3
    1  DAMAGES  SHALL  BE  CALCULATED  BY  THE COMMISSIONER AS NO MORE THAN ONE
    2  HUNDRED PERCENT OF THE TOTAL AMOUNT OF COMPENSATION FOUND TO BE DUE.  IN
    3  ANY ACTION  INSTITUTED IN THE COURTS UPON A  COMPENSATION  CLAIM  BY  AN
    4  INDEPENDENT  CONTRACTOR  OR  THE  COMMISSIONER  IN WHICH THE INDEPENDENT
    5  CONTRACTOR PREVAILS, THE COURT SHALL ALLOW SUCH  INDEPENDENT  CONTRACTOR
    6  ALL  REASONABLE  ATTORNEY'S FEES, PREJUDGMENT INTEREST AS REQUIRED UNDER
    7  THE CIVIL PRACTICE LAW AND RULES, AND, UNLESS THE CLIENT PROVES  A  GOOD
    8  FAITH  BASIS  TO  BELIEVE  THAT  ITS UNDERPAYMENT OF COMPENSATION WAS IN
    9  COMPLIANCE WITH THE LAW, AN  ADDITIONAL  AMOUNT  AS  LIQUIDATED  DAMAGES
   10  EQUAL  TO  ONE HUNDRED PERCENT OF THE TOTAL AMOUNT OF COMPENSATION FOUND
   11  TO BE DUE. THE REMEDIES PROVIDED BY THIS ARTICLE MAY BE ENFORCED  SIMUL-
   12  TANEOUSLY OR CONSECUTIVELY SO FAR AS NOT INCONSISTENT WITH EACH OTHER.
   13    6.  NOTWITHSTANDING  ANY  OTHER PROVISION OF LAW, AN ACTION TO RECOVER
   14  UPON A LIABILITY IMPOSED BY THIS ARTICLE MUST BE  COMMENCED  WITHIN  SIX
   15  YEARS.  ALL INDEPENDENT CONTRACTORS SHALL HAVE THE RIGHT TO RECOVER FULL
   16  COMPENSATION  ACCRUED DURING THE SIX YEARS PREVIOUS TO THE COMMENCING OF
   17  SUCH ACTION, WHETHER  SUCH  ACTION  IS  INSTITUTED  BY  THE  INDEPENDENT
   18  CONTRACTOR OR BY THE COMMISSIONER.
   19    7.  EACH  INDEPENDENT  CONTRACTOR  WHO  FILES  A COMPLAINT REGARDING A
   20  VIOLATION OF A PROVISION OF THIS ARTICLE SHALL BE PROVIDED WITH A  WRIT-
   21  TEN  DESCRIPTION OF THE ANTICIPATED PROCESSING OF THE COMPLAINT, INCLUD-
   22  ING INVESTIGATION, CASE CONFERENCE, POTENTIAL CIVIL AND CRIMINAL  PENAL-
   23  TIES, AND COLLECTION PROCEDURES.
   24    8.  EACH INDEPENDENT CONTRACTOR AND HIS OR HER REPRESENTATIVE SHALL BE
   25  NOTIFIED IN WRITING OF ANY CASE CONFERENCE BEFORE IT IS HELD  AND  GIVEN
   26  THE OPPORTUNITY TO ATTEND.
   27    9.  EACH INDEPENDENT CONTRACTOR AND HIS OR HER REPRESENTATIVE SHALL BE
   28  NOTIFIED IN WRITING OF ANY AWARD AND COLLECTION OF BACK COMPENSATION AND
   29  CIVIL PENALTIES, AND OF ANY INTENT TO SEEK CRIMINAL  PENALTIES.  IN  THE
   30  EVENT  THAT CRIMINAL PENALTIES ARE SOUGHT THE INDEPENDENT CONTRACTOR AND
   31  HIS OR HER REPRESENTATIVE SHALL BE NOTIFIED OF  THE  OUTCOME  OF  PROSE-
   32  CUTION.
   33    10.  IF  THE  COMMISSIONER  DETERMINES  THAT  A  CLIENT HAS VIOLATED A
   34  PROVISION OF THIS ARTICLE, OR A RULE OR  REGULATION  PROMULGATED  THERE-
   35  UNDER,  BY FAILING TO PAY THE COMPENSATION OF THEIR INDEPENDENT CONTRAC-
   36  TORS, THE COMMISSIONER SHALL ISSUE TO  THE  CLIENT  AN  ORDER  DIRECTING
   37  COMPLIANCE  THEREWITH,  WHICH  SHALL DESCRIBE PARTICULARLY THE NATURE OF
   38  THE ALLEGED VIOLATION, AND ORDER THE PAYMENT OF INTEREST AT THE RATE  OF
   39  INTEREST  THEN IN EFFECT AS PRESCRIBED PURSUANT TO SECTION FOURTEEN-A OF
   40  THE BANKING LAW PER ANNUM FROM THE DATE OF THE UNDERPAYMENT TO THE  DATE
   41  OF  THE  PAYMENT. IN ADDITION TO DIRECTING PAYMENT OF COMPENSATION FOUND
   42  TO BE DUE, SUCH ORDER, IF ISSUED TO A CLIENT  WHO  PREVIOUSLY  HAS  BEEN
   43  FOUND  IN  VIOLATION  OF THOSE PROVISIONS, RULES OR REGULATIONS, OR TO A
   44  CLIENT WHOSE VIOLATION IS WILLFUL OR EGREGIOUS, SHALL DIRECT PAYMENT  TO
   45  THE  COMMISSIONER  OF  AN ADDITIONAL SUM AS A CIVIL PENALTY IN AN AMOUNT
   46  EQUAL TO DOUBLE THE TOTAL AMOUNT FOUND TO BE DUE.
   47    11. EVERY CLIENT WHO DOES NOT PAY THE COMPENSATION OF ALL OF ITS INDE-
   48  PENDENT CONTRACTORS IN ACCORDANCE WITH THE PROVISIONS OF  THIS  CHAPTER,
   49  AND  THE  OFFICERS  AND  AGENTS  OF  ANY CLIENT WHO KNOWINGLY PERMIT THE
   50  CLIENT TO VIOLATE THIS CHAPTER BY FAILING TO PAY THE COMPENSATION OF ANY
   51  OF ITS INDEPENDENT CONTRACTORS IN ACCORDANCE WITH THE PROVISIONS  THERE-
   52  OF,  SHALL  BE  GUILTY  OF  A MISDEMEANOR FOR THE FIRST OFFENSE AND UPON
   53  CONVICTION THEREFOR SHALL BE FINED NOT LESS THAN FIVE HUNDRED  NOR  MORE
   54  THAN  TWENTY  THOUSAND DOLLARS OR IMPRISONED FOR NOT MORE THAN ONE YEAR,
   55  AND, IN THE EVENT THAT ANY SECOND OR SUBSEQUENT  OFFENSE  OCCURS  WITHIN
   56  SIX YEARS OF THE DATE OF CONVICTION FOR A PRIOR OFFENSE, SHALL BE GUILTY
       A. 6698--C                          4
    1  OF  A  FELONY  FOR THE SECOND OR SUBSEQUENT OFFENSE, AND UPON CONVICTION
    2  THEREFOR, SHALL BE FINED NOT LESS THAN FIVE HUNDRED NOR MORE THAN TWENTY
    3  THOUSAND DOLLARS OR IMPRISONED FOR NOT MORE THAN ONE YEAR PLUS ONE  DAY,
    4  OR PUNISHED BY BOTH SUCH FINE AND IMPRISONMENT, FOR EACH SUCH OFFENSE.
    5    12. THIS SECTION SHALL NOT APPLY TO:  (A) REAL ESTATE BROKERS, ASSOCI-
    6  ATE BROKERS OR SALESPERSONS LICENSED PURSUANT TO ARTICLE TWELVE-A OF THE
    7  REAL PROPERTY LAW;
    8    (B) WORK PERFORMED ON ONE OR TWO FAMILY DWELLINGS; OR
    9    (C) CONSTRUCTION CONTRACTORS OR CONSTRUCTION PROJECTS.
   10    S 2. This act shall take effect immediately.