Skip to content
S6469Senate2019-2020 SessionSame asA8035

Clarify Employer for Unemployment

Official title

“Relates to the definition of employer for purposes of the unemployment insurance law”

Sponsor Jessica RamosSD-13
Status
Senate Floor Calendar
Impact
5/10
Moderate
Outcome
Companion signed

Bill progress

Signed via A8035

What's happening

This bill clarifies which entity is considered the employer for unemployment insurance when multiple entities are involved in supervising and paying a worker.

Why it matters

  1. Reduces confusion for workers with multiple supervising entities (such as temp agencies or staffing firms). by clearly designating who is responsible for unemployment insurance—generally, the entity that pays the worker, unless there’s a contract specifying a different employer.

  2. Limits legal disputes and administrative burdens. for both businesses and workers by providing a straightforward rule for determining the "employer" when more than one organization is involved in assigning, supervising, and paying a worker.

  3. Protects payroll service agencies from unintended liability. by specifying that companies only processing payroll (without directing or placing the worker) are not considered the employer for unemployment insurance purposes.

  4. Ensures continuity and proper transfer of unemployment insurance obligations. when the role of employer shifts between entities, aligning with existing provisions on business transfers under New York labor law.

The daily · weekday mornings

Albany, before your first meeting.

Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.

Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.

Who cares

Headline styles

Clarify Employer for Unemployment

Plain English, a few words. Used as the page title.

Sponsors

Primary sponsor
Jessica Ramos

Senator · Senate District 13

Chair, Labor

No co-sponsors yet.

History

  1. Substituted by A8035
  2. Ordered to third reading cal.1724
  3. Referred to rules

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.

A8035Assembly

Clarify Employer for Unemployment Benefits

Signed by Governor · Sponsor Charles Fall

Impact 5 · ModerateSigned into law

Full text

1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗

STATE OF NEW YORK

6469

2019-2020 Regular Sessions

IN SENATE

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 the definition of employer for purposes of the unemployment insurance law

The People of the State of New York, represented in Senate and Assembly, do enact as follows:

Section 1. Section 512 of the labor law is amended by adding a new subdivision 4 to read as follows:

4. Whenever the commissioner determines that services performed by an individual constitute employment but the supervision, direction and control are exercised by one or more entities, and one entity places the individual with, or provides the individual to, another entity to perform the services, the entity that pays the individual for the services shall be the employer under this article unless by contract the individual is specified to be the employee of another entity, in which case the other entity shall be the employer. Whenever such employer is replaced by another entity such replacement shall be considered a transfer pursuant to section five hundred eighty-one of this article. This subdivision shall not apply to a payroll agency that the commissioner determines provides payroll services on behalf of another employer.

§ 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law.

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD09255-01-9

Reflowed for reading: line numbers and page breaks removed. Cite the official text.

Sponsor's memo

Title of bill

An act to amend the labor law, in relation to the definition of employer for purposes of the unemployment insurance law

Purpose of the bill

This bill would amend Article 18 of the Labor Law to establish the "employer" among multiple entities as the entity that pays an individual for services performed when the supervision, direction, and control is exercised jointly by the referring entity and by clients of an entity that refers and pays workers.

Summary of provisions

Section 1 of this bill would add a new subsection (4) to Labor Law § 512 establishing the "employer" among multiple entities as the entity that pays an individual for services performed that constitute employment. This bill would allow an exception based upon written contractual agree- ments.

Section 1 of this bill would also provide that among the multiple enti- ties, if one entity provides payment, the experience rating of that payment entity will transfer to a new payment entity.

Section 2 of this bill would make it effective on the first of January next succeeding the date on which it shall have become law.

Justification

Labor Law § 512 defines "employer" and Labor Law § 560 provides condi- tions for "terms of coverage" but both do not address situations where an individual is paid by one entity but performs services for another entity. Among multiple entities, each entity may successfully argue it is not an employer, and hence not responsible for Unemployment Insurance ("UI") obligations under Article 18 of the Labor Law.

This bill would close a loophole in current law that allows employers to avoid UI contributions in situations involving multiple entities where an individual is paid by one entity and provides services to another entity (e.g., employment agencies and their client businesses).

Under current law, one entity may argue an absence of direction, super- vision, and control over an individual that, for example, the entity has placed with another entity. Alternatively, another entity, may argue that it is not the entity that paid the individual for the services that constitute employment.

For example, in Matter of John Lack Associates, LLC, Memorandum and Order 516638 (3rd Dept., 2013), an agency called John Lack Associates, LLC provides waiters to restaurants. The agency explains the duties and requirements of a particular job to individuals on a list, the individ- ual provides the uniform and equipment, the job site provides the place where services are performed, and the agency pays the individual. Under current law, the Appellate Division was unable to find that the agency is an employer. The job sites may be multiple in a situation such as this and holding the job sites responsible is equally challenging.

Legislative history

This bill was introduced in both houses as Departmental Bill 61 in 2015 (A.7504/ S.4850); it passed the Assembly on June 2, 2015, and again on May 3, 2016, but failed to pass the Senate.

Fiscal implications

None.

Effective date

This bill would take effect on the first of January following the date on which it was enacted.

Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.