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- Referred to corporations, authorities and commissions
- Referred to corporations, authorities and commissions
Companion bill
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Relates to the liability of members of limited liability companies for wages due to laborers, servants or employees
In Assembly Committee · Corporations, Authorities And Commissions · Sponsor James F. Brennan
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S3219
Title of bill
An act to amend the limited liability company law, in relation to the liability of members for wages due to laborers, servants or employees
Purpose
To impose limited liability upon the top ten members of a Limited Liability Company for wages due employees; comparable to the liability imposed by Business Corporation Law Section 630 (Liability of shareholders for wages due to laborers, servants or employees) for personal services rendered by employees, upon the top ten members of a Limited Liability Company.
Summary of provisions
Section one creates a new sub-section (c) under the existing section 609 of the Limited Liability Company Law (Liability of members, managers and agents), imposing liability upon the top ten members of a Limited Liability Company for personal services rendered by its employees, upon the return of an execution unsatisfied against the Limited Liability Company upon a judgment recovered against it for such services.
Section two is the effective date.
Justification
Currently, in recognition of the fact that employee wages are significantly different from other debt obligations of a business, New York's Business Corporation Law Section 630 imposes liability upon a corporation's top ten shareholders for unpaid wages and personal services rendered by its employees.
In order to reinforce the public policy that earned wages and employee compensations should take a priority position against other company debts regardless of the technical form of the employer entity, this bill mirrors the liability imposed by BCL section 630, in the Limited Liability Company Law, as it serves no legitimate public purpose to continue shielding the owners of such a business entity against wages earned by its employees. All other limited liability protections remain unaffected.
Any action to enforce such liability against a member must be based upon a judgment first obtained against the employer company which failed to pay wages, the execution of which has been unsuccessful, which would normally leave the unpaid worker without recourse. This bill would provide the successful plaintiff the ability to proceed against the company's top ten owners in the event that the company has been made insolvent or otherwise dissipated its assets.
Legislative history
S.6912 (2014)
Fiscal implications
None to the state.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.