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History
- Referred to labor
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Provides for personal liability of corporate officers, members of limited liablity companies and partners for delinquent unemployment contributions
In Assembly Committee · Ways And Means · Sponsor Michele Titus
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
Title of bill
An act to amend the labor law, in relation to unemployment insurance
Purpose of the bill
The purpose of this bill is to make corporate officers, members and managers of limited liability companies, general partners, and certain limited partners personally liable for unpaid unemployment insurance ("UI") contributions.
Summary of provisions
Section 1 of the bill would add a new section 573-a to the Labor Law. This new section would impose personal liability 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 partners of partnerships to the extent that such limited partners are liable to third parties under the Partnership Law. These individuals would receive a determination from the Commissioner of Labor setting forth the basis for personal liability and the total amount of contributions, penalties and interest due and unpaid. The bill also provides that the liability of such individuals may not be relieved by the dissolution of the corporation, limited liability company, or partnership. Finally, the bill provides that any person determined to be personally liable under this section shall have all rights of appeal set forth in title eight of Article 18 of the Labor Law with respect to the determination regarding his or her personal liability.
Section 2 of the bill provides that the bill would become effective immediately, but shall apply to amounts that become due in the quarter after the effective date of the bill.
Justification
Currently corporate officers, members or managers of limited liability companies, and limited partners cannot be held personally liable for unpaid UI contributions. 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 out-of-business corporations, limited liability companies, 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.
The bill would also 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 a new bill.
Fiscal implications
The enhanced collection authority set forth in this bill would result in an increase in UI Trust Fund revenues. The ability to collect against the individuals covered by this bill would result in an estimated increase of up to $20 million per year in UI contributions.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.