New Legislation Will Hold Out-Of-State LLC Members Accountable for Denying Fair Wages to Employees in New York
State Labor Commissioner Will Have Enhanced Authority to Issue Orders Against Business Owners Who Steal From Workers
Governor Andrew M. Cuomo today announced a series of actions to further strengthen New York's efforts to crack down on wage theft.
This new proposal would amend State law to hold the top 10 members of out-of-state limited liability companies personally financially liable for unsatisfied judgments for unpaid wages. This liability already applies to in-state and out-of-state corporations, and to in-state LLCs, but not to out-of-state LLCs. Further, the Governor will advance legislation to empower the Labor Commissioner to directly enforce all wage liabilities on behalf of workers with unpaid wage claims. Combined, these measures will get more money back into the hands of the hardworking New Yorkers who earned it.
"New York is committed to ensuring a fair day's pay for a fair days work and has zero tolerance for those to seek to exploit their workers and deny them the wages they rightfully earned,” Governor Cuomo said. “With this proposal we will help ensure that no matter where bad actors try to hide, they will not be able to skirt their obligations to hard working New Yorkers."
Currently, the state Labor Law does not allow the New York State Department of Labor to pursue judgments against the top 10 owners of any corporations or LLCs, foreign or domestic. What’s more, many workers are left waiting to receive unpaid wages because businesses go bankrupt, form new businesses or hide their assets in other ways. As of September 2016, there are 5,306 individuals owed $67.8 million in stolen wages from 2014, 2015 and 2016 who are unable to collect because of this loophole.
Under Governor Cuomo’s leadership, New York has returned more stolen wages to workers than ever before. In 2014, the state Department of Labor collected and distributed a record $30.2 million to 27,000 workers – a 35 percent increase in recovered funds from the previous year.
As part of his administration’s focus on worker protection, in 2015, Governor Cuomo launched the Exploited Workers Task Force to root out worker exploitation issues in multiple industries in New York State. In its first year, the Task Force directed 1,547 businesses to pay nearly $4 million in back wages and damages to more than 7,500 workers. This targeted worker protection initiative enabled New York State to achieve a new record wage recovery in 2015, returning $31.5 million in unpaid wages to over 28,000 workers.