January 11, 2016
By Stephanie West
New York, NY – New York State Governor Andrew Cuomo is proposing the amending of State law to hold 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. In addition, the Governor will advance legislation to empower the Labor Commissioner to directly enforce all wage liabilities on behalf of workers with unpaid wage claims.
“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.
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. 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 record wage recovery in 2015, returning $31.5 million in unpaid wages to over 28,000 workers.