What's happening
This bill establishes the crime of misappropriating payroll funds, making it a class E felony in New York.
Why it matters
Creates a criminal penalty specifically targeting the misuse of money set aside for employee pay or payroll taxes. this means business owners, managers, or others responsible for payroll could face felony charges if they intentionally divert these funds for other uses.
Exempts payroll processors from liability when following proper procedures. the law recognizes that payroll companies aren’t at fault if delays are due to fraud investigations or if employers fail to provide enough money, protecting third-party processors from undue prosecution.
Extends criminal liability to corporations. if an agent of a company misappropriates payroll funds within their job duties, both the individual and the corporation itself could potentially be held criminally responsible, raising the stakes for corporate compliance and oversight.
Establishes clear boundaries for lawful and unlawful handling of payroll funds. by spelling out what does and doesn’t count as misappropriation, the bill aims to give both employers and payroll processors clear guidance and deter wage theft or payroll tax evasion.
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Who cares
Headline styles
Make Payroll Theft a Crime
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 38
No co-sponsors yet.
History
- Referred to codes
- Delivered to assembly
- Passed senateVote 60–2
- Amended on third reading 6725a
- Advanced to third reading
- 2nd report cal.
- 1st report cal.63
- Referred to codes
- 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.
Criminalize Payroll Fund Theft
In Assembly Committee · Codes · Sponsor Jeffrey Dinowitz
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
6725--A Cal. No. 63
2019-2020 Regular Sessions
IN SENATE
September 18, 2019
Introduced by Sen. CARLUCCI -- read twice and ordered printed, and when printed to be committed to the Committee on Rules -- recommitted to the Committee on Codes in accordance with Senate Rule 6, sec. 8 -reported favorably from said committee, ordered to first and second report, ordered to a third reading, amended and ordered reprinted, retaining its place in the order of third reading
AN ACT to amend the penal law, in relation to the misappropriation of payroll funds
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The penal law is amended by adding a new section 165.80 to read as follows: § 165.80 Misappropriation of payroll funds.
A person is guilty of misappropriation of payroll funds when he or she knows that funds are designated for use as employee payroll funds or as payment of payroll taxes, and intentionally prevents the funds from being used for their designated purpose. A delayed transfer of funds, in accordance with an agreement between a payroll processing company and an employer for the purpose of investigating potentially fraudulent or incorrect transactions, shall not constitute misappropriation of payroll funds. A payroll processing company shall not be responsible for an employer's failure to provide sufficient funds.
Misappropriation of payroll funds is a class E felony.
§ 2. Paragraph (c) of subdivision 2 of section 20.20 of the penal law, as amended by chapter 671 of the laws of 1986, is amended to read as follows:
(c) The conduct constituting the offense is engaged in by an agent of the corporation while acting within the scope of his or her employment and in behalf of the corporation, and the offense is (i) a misdemeanor or a violation, (ii) one defined by a statute which clearly indicates a legislative intent to impose such criminal liability on a corporation,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13785-02-0
S. 6725--A 2
[or] (iii) any offense set forth in title twenty-seven of article seventy-one of the environmental conservation law, or (iv) misappropriation of payroll funds as defined in section 165.80 of this chapter.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the penal law, in relation to the misappropriation of payroll funds
Purpose or general idea of bill
The purpose of this bill is to establish the crime of misappropriation of payroll funds in New York.
Summary of provisions
Section one establishes the crime of Misappropriation of Payroll Funds. States that a delay in the transfer of funds when related to an investi- gation cannot be considered a misappropriation.
Section two establishes corporate criminal liability for the crime of Misappropriation of Payroll Funds.
Section three establishes the effective date.
Justification
Recent events have underscored that employee payroll funds deserve and require further protection under New York law. When payroll funds are misused, employees cannot he compensated for the work they have performed. Bad actors purposefully causing late or missing paychecks can wreak havoc on employees lives, making it difficult to pay bills or put food on the table.
In order to ensure that companies, including payroll companies, are adequately protecting payroll funds, and funds earmarked to pay payroll taxes, it is vital that the Legislature establish penalties for the misuse of payroll funds.
Prior legislative history
2019: New bill
Fiscal implications
None.
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.