Amd Lien L, generally; amd §§199-a & 663, Lab L; amd §§6201, 6210 & 6211, R6212, CPLR; amd §§624 & 630, BC L;
amd §§609 & 1102, Lim Lil L
Relates to securing payment of wages for work already performed; creates a lien remedy for all employees; provides grounds for attachment; relates to procedures where employees may hold shareholders of non-publicly traded corporations personally liable for wage theft; relates to rights for victims of wage theft to hold the ten members with the largest ownership interests in a company personally liable for wage theft.
STATE OF NEW YORK
________________________________________________________________________
766
2021-2022 Regular Sessions
IN ASSEMBLY(Prefiled)
January 6, 2021
___________
Introduced by M. of A. L. ROSENTHAL, AUBRY, GOTTFRIED, TAYLOR, SAYEGH,
SIMON, COLTON, REYES -- read once and referred to the Committee on
Judiciary
AN ACT to amend the lien law, in relation to employee liens; to amend
the labor law, in relation to employee complaints; to amend the civil
practice law and rules, in relation to grounds for attachment; to
amend the business corporation law, in relation to streamlining proce-
dures where employees may hold shareholders of non-publicly traded
corporations personally liable for wage theft; and to amend the limit-
ed liability company law, in relation to creating a right for victims
of wage theft to hold the ten members with the largest ownership
interests in a company personally liable for wage theft
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 2 of the lien law is amended by adding three new
2 subdivisions 21, 22 and 23 to read as follows:
3 21. Employee. The term "employee", when used in this chapter, shall
4 have the same meaning as "employee" pursuant to articles one, six, nine-
5 teen and nineteen-A of the labor law, as applicable, or the Fair Labor
6 Standards Act, 29 U.S.C. § 201 et. seq., as applicable.
7 22. Employer. The term "employer", when used in this chapter, shall
8 have the same meaning as "employer" pursuant to articles one, six, nine-
9 teen and nineteen-A of the labor law, as applicable, or the Fair Labor
10 Standards Act, 29 U.S.C. § 201 et. seq., as applicable, except that the
11 term "employer" shall not include a governmental agency.
12 23. Wage claim. The term "wage claim", when used in this chapter,
13 means a claim that an employee has suffered a violation of sections one
14 hundred seventy, one hundred ninety-three, one hundred ninety-six-d, six
15 hundred fifty-two or six hundred seventy-three of the labor law or the
16 related regulations and wage orders promulgated by the commissioner, a
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00839-01-1
A. 766 2
1 claim for wages due to an employee pursuant to an employment contract
2 that were unpaid in violation of that contract, or a claim that an
3 employee has suffered a violation of 29 U.S.C. § 206 or 207.
4 § 2. Section 3 of the lien law, as amended by chapter 137 of the laws
5 of 1985, is amended to read as follows:
6 § 3. Mechanic's lien and employee's lien on [real] property. 1.
7 Mechanic's lien. A contractor, subcontractor, laborer, materialman,
8 landscape gardener, nurseryman or person or corporation selling fruit or
9 ornamental trees, roses, shrubbery, vines and small fruits, who performs
10 labor or furnishes materials for the improvement of real property with
11 the consent or at the request of the owner thereof, or of his agent,
12 contractor or subcontractor, and any trust fund to which benefits and
13 wage supplements are due or payable for the benefit of such laborers,
14 shall have a lien for the principal and interest, of the value, or the
15 agreed price, of such labor, including benefits and wage supplements due
16 or payable for the benefit of any laborer, or materials upon the real
17 property improved or to be improved and upon such improvement, from the
18 time of filing a notice of such lien as prescribed in this chapter.
19 Where the contract for an improvement is made with a husband or wife and
20 the property belongs to the other or both, the husband or wife contract-
21 ing shall also be presumed to be the agent of the other, unless such
22 other having knowledge of the improvement shall, within ten days after
23 learning of the contract give the contractor written notice of his or
24 her refusal to consent to the improvement. Within the meaning of the
25 provisions of this chapter, materials actually manufactured for but not
26 delivered to the real property, shall also be deemed to be materials
27 furnished.
28 2. Employee's lien. An employee who has a wage claim as that term is
29 defined in subdivision twenty-three of section two of this chapter shall
30 have a lien on his or her employer's interest in property for the value
31 of that employee's wage claim arising out of the employment, including
32 liquidated damages pursuant to subdivision one-a of section one hundred
33 ninety-eight, section six hundred sixty-three or section six hundred
34 eighty-one of the labor law, or 29 U.S.C. § 216 (b), from the time of
35 filing a notice of such lien as prescribed in this chapter. An employ-
36 ee's lien based on a wage claim may be had against the employer's inter-
37 est in real property and against the employer's interest in personal
38 property that can be sufficiently described within the meaning of
39 section 9-108 of the uniform commercial code, except that an employee's
40 lien shall not extend to deposit accounts or goods as those terms are
41 defined in section 9-102 of the uniform commercial code. The department
42 of labor and the attorney general may obtain an employee's lien for the
43 value of wage claims of the employees who are the subject of their
44 investigations, court actions or administrative agency actions.
45 3. As used in this article and unless otherwise specified, a lien
46 shall mean an employee's lien or a mechanic's lien.
47 § 3. Subdivisions 1 and 2 of section 4 of the lien law, subdivision 1
48 as amended by chapter 515 of the laws of 1929 and subdivision 2 as added
49 by chapter 704 of the laws of 1985, are amended to read as follows:
50 (1) [Such] A mechanic's or employee's lien and employee's lien against
51 real property shall extend to the owner's right, title or interest in
52 the real property and improvements, existing at the time of filing the
53 notice of lien, or thereafter acquired, except as hereinafter in this
54 article provided. If an owner assigns his interest in such real property
55 by a general assignment for the benefit of creditors, within thirty days
56 prior to such filing, the lien shall extend to the interest thus
A. 766 3
1 assigned. If any part of the real property subjected to such lien be
2 removed by the owner or by any other person, at any time before the
3 discharge thereof, such removal shall not affect the rights of the
4 lienor, either in respect to the remaining real property, or the part so
5 removed. If labor is performed for, or materials furnished to, a
6 contractor or subcontractor for an improvement, the mechanic's lien
7 shall not be for a sum greater than the sum earned and unpaid on the
8 contract at the time of filing the notice of lien, and any sum subse-
9 quently earned thereon. In no case shall the owner be liable to pay by
10 reason of all mechanic's liens created pursuant to this article a sum
11 greater than the value or agreed price of the labor and materials
12 remaining unpaid, at the time of filing notices of such liens, except as
13 hereinafter provided.
14 (2) [Such] A mechanic's or employee's lien shall not extend to the
15 owner's right, title or interest in real property and improvements,
16 existing at the time of filing the notice of lien if such lien arises
17 from the failure of a lessee of the right to explore, develop or produce
18 natural gas or oil, to pay for, compensate or render value for improve-
19 ments made with the consent or at the request of such lessee by a
20 contractor, subcontractor, materialman, equipment operator or owner,
21 landscaper, nurseryman, or person or corporation who performs labor or
22 furnishes materials for the exploration, development, or production of
23 oil or natural gas or otherwise improves such leased property. Such
24 mechanic's or employee's lien shall extend to the improvements made for
25 the exploration, development and production of oil and natural gas, and
26 the working interest held by a lessee of the right to explore, develop
27 or produce oil and natural gas.
28 § 4. The opening paragraph of section 4-a of the lien law, as amended
29 by chapter 696 of the laws of 1959, is amended to read as follows:
30 The proceeds of any insurance which by the terms of the policy are
31 payable to the owner of real property improved, and actually received or
32 to be received by him because of the destruction or removal by fire or
33 other casualty of an improvement on which lienors have performed labor
34 or services or for which they have furnished materials, or upon which an
35 employee has established an employee's lien, shall after the owner has
36 been reimbursed therefrom for premiums paid by him, if any, for such
37 insurance, be subject to liens provided by this act to the same extent
38 and in the same order of priority as the real property would have been
39 had such improvement not been so destroyed or removed.
40 § 5. Subdivisions 1, 2 and 5 of section 9 of the lien law, as amended
41 by chapter 515 of the laws of 1929, are amended to read as follows:
42 1. The name of the lienor, and either the residence of the lienor or
43 the name and business address of the lienor's attorney, if any; and if
44 the lienor is a partnership or a corporation, the business address of
45 such firm, or corporation, the names of partners and principal place of
46 business, and if a foreign corporation, its principal place of business
47 within the state.
48 2. The name of the owner of the [real] property against whose interest
49 therein a lien is claimed, and the interest of the owner as far as known
50 to the lienor.
51 5. The amount unpaid to the lienor for such labor or materials, or the
52 amount of the wage claim if a wage claim is the basis for establishment
53 of the lien, the items of the wage claim and the value thereof which
54 make up the amount for which the lienor claims a lien.
55 § 6. Subdivision 1 of section 10 of the lien law, as amended by chap-
56 ter 367 of the laws of 2011, is amended to read as follows:
A. 766 4
1 1. (a) Notice of mechanic's lien may be filed at any time during the
2 progress of the work and the furnishing of the materials, or, within
3 eight months after the completion of the contract, or the final perform-
4 ance of the work, or the final furnishing of the materials, dating from
5 the last item of work performed or materials furnished; provided, howev-
6 er, that where the improvement is related to real property improved or
7 to be improved with a single family dwelling, the notice of mechanic's
8 lien may be filed at any time during the progress of the work and the
9 furnishing of the materials, or, within four months after the completion
10 of the contract, or the final performance of the work, or the final
11 furnishing of the materials, dating from the last item of work performed
12 or materials furnished; and provided further where the notice of mechan-
13 ic's lien is for retainage, the notice of mechanic's lien may be filed
14 within ninety days after the date the retainage was due to be released;
15 except that in the case of a mechanic's lien by a real estate broker,
16 the notice of mechanic's lien may be filed only after the performance of
17 the brokerage services and execution of lease by both lessor and lessee
18 and only if a copy of the alleged written agreement of employment or
19 compensation is annexed to the notice of lien, provided that where the
20 payment pursuant to the written agreement of employment or compensation
21 is to be made in installments, then a notice of lien may be filed within
22 eight months after the final payment is due, but in no event later than
23 a date five years after the first payment was made. For purposes of this
24 section, the term "single family dwelling" shall not include a dwelling
25 unit which is a part of a subdivision that has been filed with a munici-
26 pality in which the subdivision is located when at the time the lien is
27 filed, such property in the subdivision is owned by the developer for
28 purposes other than his personal residence. For purposes of this
29 section, "developer" shall mean and include any private individual,
30 partnership, trust or corporation which improves two or more parcels of
31 real property with single family dwellings pursuant to a common scheme
32 or plan. [The]
33 (b) Notice of employee's lien may be filed at any time not later than
34 three years following the end of the employment giving rise to the wage
35 claim.
36 (c) A notice of lien, other than for a lien on personal property, must
37 be filed in the clerk's office of the county where the property is situ-
38 ated. If such property is situated in two or more counties, the notice
39 of lien shall be filed in the office of the clerk of each of such coun-
40 ties. The county clerk of each county shall provide and keep a book to
41 be called the "lien docket," which shall be suitably ruled in columns
42 headed "owners," "lienors," "lienor's attorney," "property," "amount,"
43 "time of filing," "proceedings had," in each of which he shall enter the
44 particulars of the notice, properly belonging therein. The date, hour
45 and minute of the filing of each notice of lien shall be entered in the
46 proper column. Except where the county clerk maintains a block index,
47 the names of the owners shall be arranged in such book in alphabetical
48 order. The validity of the lien and the right to file a notice thereof
49 shall not be affected by the death of the owner before notice of the
50 lien is filed. A notice of employee's lien on personal property must be
51 filed, together with a financing statement, in the filing office as set
52 forth in section 9-501 of the uniform commercial code.
53 § 7. Section 11 of the lien law, as amended by chapter 147 of the laws
54 of 1996, is amended to read as follows:
55 § 11. Service of copy of notice of lien. 1. Within five days before
56 or thirty days after filing the notice of a mechanic's lien, the lienor
A. 766 5
1 shall serve a copy of such notice upon the owner, if a natural person,
2 (a) by delivering the same to him personally, or if the owner cannot be
3 found, to his agent or attorney, or (b) by leaving it at his last known
4 place of residence in the city or town in which the real property or
5 some part thereof is situated, with a person of suitable age and
6 discretion, or (c) by registered or certified mail addressed to his last
7 known place of residence, or (d) if such owner has no such residence in
8 such city or town, or cannot be found, and he has no agent or attorney,
9 by affixing a copy thereof conspicuously on such property, between the
10 hours of nine o'clock in the forenoon and four o'clock in the afternoon;
11 if the owner be a corporation, said service shall be made (i) by deliv-
12 ering such copy to and leaving the same with the president, vice-presi-
13 dent, secretary or clerk to the corporation, the cashier, treasurer or a
14 director or managing agent thereof, personally, within the state, or
15 (ii) if such officer cannot be found within the state by affixing a copy
16 thereof conspicuously on such property between the hours of nine o'clock
17 in the forenoon and four o'clock in the afternoon, or (iii) by regis-
18 tered or certified mail addressed to its last known place of business.
19 Failure to file proof of such a service with the county clerk within
20 thirty-five days after the notice of lien is filed shall terminate the
21 notice as a lien. Until service of the notice has been made, as above
22 provided, an owner, without knowledge of the lien, shall be protected in
23 any payment made in good faith to any contractor or other person claim-
24 ing a lien.
25 2. Within five days before or thirty days after filing the notice of
26 an employee's lien, the lienor shall serve a copy of such notice upon
27 the employer, if a natural person, (a) by delivering the same to him
28 personally, or if the employer cannot be found, to his agent or attor-
29 ney, or (b) by leaving it as his last known place of residence or busi-
30 ness, with a person of suitable age and discretion, or (c) by registered
31 or certified mail addressed to his last known place of residence or
32 business, or (d) if such employer owns real property, by affixing a copy
33 thereof conspicuously on such property, between the hours of nine
34 o'clock in the forenoon and four o'clock in the afternoon. The lienor
35 also shall, within thirty days after filing the notice of employee's
36 lien, affix a copy thereof conspicuously on the real property identified
37 in the notice of employee's lien, between the hours of nine o'clock in
38 the forenoon and four o'clock in the afternoon. If the employer be a
39 corporation, said service shall be made (i) by delivering such copy to
40 and leaving the same with the president, vice-president, secretary or
41 clerk to the corporation, the cashier, treasurer or a director or manag-
42 ing agent thereof, personally, within the state, or (ii) if such officer
43 cannot be found within the state by affixing a copy thereof conspicuous-
44 ly on such property between the hours of nine o'clock in the forenoon
45 and four o'clock in the afternoon, or (iii) by registered or certified
46 mail addressed to its last known place of business, or (iv) by delivery
47 to the secretary of the department of state in the same manner as
48 required by subparagraph one of paragraph (b) of section three hundred
49 six of the business corporation law. Failure to file proof of such a
50 service with the county clerk within thirty-five days after the notice
51 of lien is filed shall terminate the notice as a lien. Until service of
52 the notice has been made, as above provided, an owner, without knowledge
53 of the lien, shall be protected in any payment made in good faith to any
54 other person claiming a lien.
55 § 8. Section 11-b of the lien law, as amended by chapter 147 of the
56 laws of 1996, is amended to read as follows:
A. 766 6
1 § 11-b. Copy of notice of mechanic's lien to a contractor or subcon-
2 tractor. Within five days before or thirty days after filing a notice
3 of mechanic's lien in accordance with section ten of this chapter or the
4 filing of an amendment of notice of mechanic's lien in accordance with
5 section twelve-a of this [chapter] article the lienor shall serve a copy
6 of such notice or amendment by certified mail on the contractor, subcon-
7 tractor, assignee or legal representative for whom he was employed or to
8 whom he furnished materials or if the lienor is a contractor or subcon-
9 tractor to the person, firm or corporation with whom the contract was
10 made. A lienor having a direct contractual relationship with a subcon-
11 tractor or a sub-subcontractor but not with a contractor shall also
12 serve a copy of such notice or amendment by certified mail to the
13 contractor. Failure to file proof of such a service with the county
14 clerk within thirty-five days after the notice of lien is filed shall
15 terminate the notice as a lien. Any lienor, or a person acting on behalf
16 of a lienor, who fails to serve a copy of the notice of mechanic's lien
17 as required by this section shall be liable for reasonable attorney's
18 fees, costs and expenses, as determined by the court, incurred in
19 obtaining such copy.
20 § 9. Subdivision 1 of section 12-a of the lien law, as amended by
21 chapter 1048 of the laws of 1971, is amended to read as follows:
22 1. Within sixty days after the original filing, a lienor may amend his
23 lien upon twenty days notice to existing lienors, mortgagees and the
24 owner, provided that no action or proceeding to enforce or cancel the
25 mechanics' lien or employee's lien has been brought in the interim,
26 where the purpose of the amendment is to reduce the amount of the lien,
27 except the question of wilful exaggeration shall survive such amendment.
28 § 10. Subdivision 1 of section 13 of the lien law, as amended by chap-
29 ter 878 of the laws of 1947, is amended to read as follows:
30 (1) [A] An employee's lien, or a lien for materials furnished or labor
31 performed in the improvement of real property, shall have priority over
32 a conveyance, mortgage, judgment or other claim against such property
33 not recorded, docketed or filed at the time of the filing of the notice
34 of such lien, except as hereinafter in this chapter provided; over
35 advances made upon any mortgage or other encumbrance thereon after such
36 filing, except as hereinafter in this article provided; and over the
37 claim of a creditor who has not furnished materials or performed labor
38 upon such property, if such property has been assigned by the owner by a
39 general assignment for the benefit of creditors, within thirty days
40 before the filing of either of such notices; and also over an attachment
41 hereafter issued or a money judgment hereafter recovered upon a claim,
42 which, in whole or in part, was not for materials furnished, labor
43 performed or moneys advanced for the improvement of such real property;
44 and over any claim or lien acquired in any proceedings upon such judg-
45 ment. Such liens shall also have priority over advances made upon a
46 contract by an owner for an improvement of real property which contains
47 an option to the contractor, his successor or assigns to purchase the
48 property, if such advances were made after the time when the labor began
49 or the first item of material was furnished, as stated in the notice of
50 lien. If several buildings are demolished, erected, altered or repaired,
51 or several pieces or parcels of real property are improved, under one
52 contract, and there are conflicting liens thereon, each lienor shall
53 have priority upon the particular part of the real property or upon the
54 particular building or premises where his labor is performed or his
55 materials are used. Persons shall have no priority on account of the
56 time of filing their respective notices of liens, but all liens shall be
A. 766 7
1 on a parity except as hereinafter in section fifty-six of this chapter
2 provided; and except that in all cases laborers for daily or weekly
3 wages with a mechanic's lien, and employees with an employee's lien,
4 shall have preference over all other claimants under this article.
5 § 11. Section 17 of the lien law, as amended by chapter 324 of the
6 laws of 2000, is amended to read as follows:
7 § 17. Duration of lien. 1. (a) No mechanic's lien specified in this
8 article shall be a lien for a longer period than one year after the
9 notice of lien has been filed, unless within that time an action is
10 commenced to foreclose the lien, and a notice of the pendency of such
11 action, whether in a court of record or in a court not of record, is
12 filed with the county clerk of the county in which the notice of lien is
13 filed, containing the names of the parties to the action, the object of
14 the action, a brief description of the real property affected thereby,
15 and the time of filing the notice of lien; or unless an extension to
16 such lien, except for a lien on real property improved or to be improved
17 with a single family dwelling, is filed with the county clerk of the
18 county in which the notice of lien is filed within one year from the
19 filing of the original notice of lien, continuing such lien and such
20 lien shall be redocketed as of the date of filing such extension. Such
21 extension shall contain the names of the lienor and the owner of the
22 real property against whose interest therein such lien is claimed, a
23 brief description of the real property affected by such lien, the amount
24 of such lien, and the date of filing the notice of lien. No lien shall
25 be continued by such extension for more than one year from the filing
26 thereof. In the event an action is not commenced to foreclose the lien
27 within such extended period, such lien shall be extinguished unless an
28 order be granted by a court of record or a judge or justice thereof,
29 continuing such lien, and such lien shall be redocketed as of the date
30 of granting such order and a statement made that such lien is continued
31 by virtue of such order. A lien on real property improved or to be
32 improved with a single family dwelling may only be extended by an order
33 of a court of record, or a judge or justice thereof. No lien shall be
34 continued by court order for more than one year from the granting there-
35 of, but a new order and entry may be made in each of two successive
36 years. If a lienor is made a party defendant in an action to enforce
37 another lien, and the plaintiff or such defendant has filed a notice of
38 the pendency of the action within the time prescribed in this section,
39 the lien of such defendant is thereby continued. Such action shall be
40 deemed an action to enforce the lien of such defendant lienor. The fail-
41 ure to file a notice of pendency of action shall not abate the action as
42 to any person liable for the payment of the debt specified in the notice
43 of lien, and the action may be prosecuted to judgment against such
44 person. The provisions of this section in regard to continuing liens
45 shall apply to liens discharged by deposit or by order on the filing of
46 an undertaking. Where a lien is discharged by deposit or by order, a
47 notice of pendency of action shall not be filed.
48 (b) A lien, the duration of which has been extended by the filing of a
49 notice of the pendency of an action as above provided, shall neverthe-
50 less terminate as a lien after such notice has been canceled as provided
51 in section sixty-five hundred fourteen of the civil practice law and
52 rules or has ceased to be effective as constructive notice as provided
53 in section sixty-five hundred thirteen of the civil practice law and
54 rules.
55 2. (a) No employee's lien on real property shall be a lien for a long-
56 er period than one year after the notice of lien has been filed, unless
A. 766 8
1 an extension to such lien is filed with the county clerk of the county
2 in which the notice of lien is filed within one year from the filing of
3 the original notice of lien, continuing such lien and such lien shall be
4 redocketed as of the date of filing such extension. Such extension shall
5 contain the names of the lienor and the owner of the real property
6 against whose interest therein such lien is claimed, a brief description
7 of the property affected by such lien, the amount of such lien, and the
8 date of filing the notice of lien. No lien shall be continued by such
9 extension for more than one year from the filing thereof. In the event
10 an action is not commenced to obtain judgment on the wage claim or to
11 foreclose the lien within such extended period, such lien shall be auto-
12 matically extinguished unless an order be granted by a court of record
13 or a judge or justice thereof, continuing such lien, and such lien shall
14 be redocketed as of the date of granting such order and a statement made
15 that such lien is continued by virtue of such order.
16 (b) No employee's lien on personal property shall be a lien for a
17 longer period than one year after the financing statement has been
18 recorded, unless an extension to such lien, is filed with the filing
19 office in which the financing statement is required to be filed pursuant
20 to section 9-501 of the uniform commercial code within one year from the
21 filing of the original financing statement, continuing such lien. Such
22 extension shall contain the names of the lienor and the owner of the
23 property against whose interest therein such lien is claimed, a brief
24 description of the prior financing statement to be extended, and the
25 date of filing the prior financing statement. No lien shall be contin-
26 ued by such extension for more than one year from the filing thereof. In
27 the event an action is not commenced to obtain judgment on the wage
28 claim or to foreclose the lien within such extended period, such lien
29 shall be automatically extinguished unless an order be granted by a
30 court of record or a judge or justice thereof, continuing such lien, and
31 such lien shall be refiled as of the date of granting such order and a
32 statement made that such lien is continued by virtue of such order.
33 (c) If a lienor is made a party defendant in an action to enforce
34 another lien, and the plaintiff or such defendant has filed a notice of
35 the pendency of the action within the time prescribed in this section,
36 the lien of such defendant is thereby continued. Such action shall be
37 deemed an action to enforce the lien of such defendant lienor. The fail-
38 ure to file a notice of pendency of action shall not abate the action as
39 to any person liable for the payment of the debt specified in the notice
40 of lien, and the action may be prosecuted to judgment against such
41 person. The provisions of this section in regard to continuing liens
42 shall apply to liens discharged by deposit or by order on the filing of
43 an undertaking. Where a lien is discharged by deposit or by order, a
44 notice of pendency of action shall not be filed.
45 (d) Notwithstanding the foregoing, if a lienor commences a foreclosure
46 action or an action to obtain a judgment on the wage claim within one
47 year from the filing of the notice of lien on real property or the
48 recording of the financing statement creating lien on personal property,
49 the lien shall be extended during the pendency of the action and for one
50 hundred twenty days following the entry of final judgment in such
51 action, unless the action results in a final judgment or administrative
52 order in the lienor's favor on the wage claims and the lienor commences
53 a foreclosure action, in which instance the lien shall be valid during
54 the pendency of the foreclosure action, provided, that the lien will be
55 automatically extinguished if, after a dismissal with prejudice of the
56 wage claims on which it is based, the lienor fails to file a notice of
A. 766 9
1 appeal within the prescribed period to file a notice of appeal. If a
2 lien is extended due to the pendency of a foreclosure action or an
3 action to obtain a judgment on the wage claim, the lienor shall file a
4 notice of such pendency and extension with the county clerk of the coun-
5 ty in which the notice of lien is filed, containing the names of the
6 parties to the action, the object of the action, a brief description of
7 the property affected thereby, and the time of filing the notice of
8 lien, or in the case of a lien on personal property shall file such
9 notice with the office authorized to accept financing statements pursu-
10 ant to section 9-501 of the uniform commercial code. For purposes of
11 this section, an action to obtain judgment on a wage claim includes an
12 action brought in any court of competent jurisdiction, the submission of
13 a complaint to the department of labor or the submission of a claim to
14 arbitration pursuant to an arbitration agreement. An action also
15 includes an investigation of wage claims by the commissioner of labor or
16 the attorney general of the state of New York, regardless of whether
17 such investigation was initiated by a complaint.
18 (e) A lien, the duration of which has been extended by the filing of a
19 notice of the pendency of an action as above provided, shall neverthe-
20 less terminate as a lien after such notice has been canceled as provided
21 in section sixty-five hundred fourteen of the civil practice law and
22 rules or has ceased to be effective as constructive notice as provided
23 in section sixty-five hundred thirteen of the civil practice law and
24 rules.
25 § 12. Subdivisions 2 and 4 of section 19 of the lien law, subdivision
26 2 as amended by chapter 310 of the laws of 1962, subdivision 4 as added
27 by chapter 582 of the laws of 2002 and paragraph a of subdivision 4 as
28 further amended by section 104 of part A of chapter 62 of the laws of
29 2011, are amended to read as follows:
30 (2) By failure to begin an action to foreclose such lien or to secure
31 an order continuing it, within one year from the time of filing the
32 notice of lien, unless (i) an action be begun within the same period to
33 foreclose a mortgage or another mechanic's lien upon the same property
34 or any part thereof and a notice of pendency of such action is filed
35 according to law, or (ii) an action is commenced to obtain a judgment on
36 a wage claim pursuant to subdivision two of section seventeen of this
37 article, but a lien, the duration of which has been extended by the
38 filing of a notice of the pendency of an action as herein provided,
39 shall nevertheless terminate as a lien after such notice has been
40 cancelled or has ceased to be effective as constructive notice.
41 (4) Either before or after the beginning of an action by the employer,
42 owner or contractor executing a bond or undertaking in an amount equal
43 to one hundred ten percent of such lien conditioned for the payment of
44 any judgment which may be rendered against the property or employer for
45 the enforcement of the lien:
46 a. The execution of any such bond or undertaking by any fidelity or
47 surety company authorized by the laws of this state to transact busi-
48 ness, shall be sufficient; and where a certificate of qualification has
49 been issued by the superintendent of financial services under the
50 provisions of section one thousand one hundred eleven of the insurance
51 law, and has not been revoked, no justification or notice thereof shall
52 be necessary. Any such company may execute any such bond or undertaking
53 as surety by the hand of its officers, or attorney, duly authorized
54 thereto by resolution of its board of directors, a certified copy of
55 which resolution, under the seal of said company, shall be filed with
56 each bond or undertaking. Any such bond or undertaking shall be filed
A. 766 10
1 with the clerk of the county in which the notice of lien is filed, and a
2 copy shall be served upon the adverse party. The undertaking is effec-
3 tive when so served and filed. If a certificate of qualification issued
4 pursuant to subsections (b), (c) and (d) of section one thousand one
5 hundred eleven of the insurance law is not filed with the undertaking, a
6 party may except, to the sufficiency of a surety and by a written notice
7 of exception served upon the adverse party within ten days after
8 receipt, a copy of the undertaking. Exceptions deemed by the court to
9 have been taken unnecessarily, or for vexation or delay, may, upon
10 notice, be set aside, with costs. Where no exception to sureties is
11 taken within ten days or where exceptions taken are set aside, the
12 undertaking shall be allowed.
13 b. In the case of bonds or undertakings not executed pursuant to para-
14 graph a of this subdivision, the employer, owner or contractor shall
15 execute an undertaking with two or more sufficient sureties, who shall
16 be free holders, to the clerk of the county where the premises are situ-
17 ated. The sureties must together justify in at least double the sum
18 named in the undertaking. A copy of the undertaking, with notice that
19 the sureties will justify before the court, or a judge or justice there-
20 of, at the time and place therein mentioned, must be served upon the
21 lienor or his attorney, not less than five days before such time. Upon
22 the approval of the undertaking by the court, judge or justice an order
23 shall be made by such court, judge or justice discharging such lien.
24 c. If the lienor cannot be found, or does not appear by attorney,
25 service under this subsection may be made by leaving a copy of such
26 undertaking and notice at the lienor's place of residence, or if a
27 corporation at its principal place of business within the state as stat-
28 ed in the notice of lien, with a person of suitable age and discretion
29 therein, or if the house of his abode or its place of business is not
30 stated in said notice of lien and is not known, then in such manner as
31 the court may direct. The premises, if any, described in the notice of
32 lien as the lienor's residence or place of business shall be deemed to
33 be his said residence or its place of business for the purposes of said
34 service at the time thereof, unless it is shown affirmatively that the
35 person servicing the papers or directing the service had knowledge to
36 the contrary. Notwithstanding the other provisions of this subdivision
37 relating to service of notice, in any case where the mailing address of
38 the lienor is outside the state such service may be made by registered
39 or certified mail, return receipt requested, to such lienor at the mail-
40 ing address contained in the notice of lien.
41 d. Except as otherwise provided in this subdivision, the provisions of
42 article twenty-five of the civil practice law and rules regulating
43 undertakings is applicable to a bond or undertaking given for the
44 discharge of a lien on account of private improvements or of an employ-
45 ee's lien.
46 § 13. Section 24 of the lien law, as amended by chapter 515 of the
47 laws of 1929, is amended to read as follows:
48 § 24. Enforcement of [mechanic's] lien. (1) Real property. The
49 [mechanics'] liens on real property specified in this article may be
50 enforced against the property specified in the notice of lien and which
51 is subject thereto and against any person liable for the debt upon which
52 the lien is founded, as prescribed in article three of this chapter.
53 (2) Personal property. An employee's lien on personal property speci-
54 fied in this article may immediately be enforced against the property
55 through a foreclosure as prescribed in article nine of the uniform
56 commercial code, or upon judgment obtained by the employee, commissioner
A. 766 11
1 of labor or attorney general of the state of New York, may be enforced
2 in any manner available to the judgment creditor pursuant to article
3 nine of the uniform commercial code or other applicable laws.
4 § 14. Section 26 of the lien law, as amended by chapter 373 of the
5 laws of 1977, is amended to read as follows:
6 § 26. Subordination of liens after agreement with owner. In case an
7 owner of real property shall execute to one or more persons, or a corpo-
8 ration, as trustee or trustees, a bond and mortgage or a note and mort-
9 gage affecting such property in whole or in part, or an assignment of
10 the moneys due or to become due under a contract for a building loan in
11 relation to such property, and in case such mortgage, if any, shall be
12 recorded in the office of the register of the county where such real
13 property is situated, or if such county has no register then in the
14 office of the clerk of such county, and in case such assignment, if any,
15 shall be filed in the office of the clerk of the county where such real
16 property is situated; and in case lienors having [mechanics'] liens
17 against said real property, notices of which have been filed up to and
18 not later than fifteen days after the recording of such mortgage or the
19 filing of such assignment, and which liens have not been discharged as
20 in this article provided, shall, to the extent of at least fifty-five
21 per centum of the aggregate amount for which such notices of liens have
22 been so filed, approve such bond and mortgage or such note and mortgage,
23 if any, and such assignment, if any, by an instrument or instruments in
24 writing, duly acknowledged and filed in the office of such county clerk,
25 then all mechanics' liens for labor performed or material furnished
26 prior to the recording of such mortgage or filing of such assignment,
27 whether notices thereof have been theretofore or are thereafter filed
28 and which have not been discharged as in this article provided, shall be
29 subordinate to the lien of such trust bond and mortgage or such trust
30 note and mortgage to the extent of the aggregate amount of all certif-
31 icates of interest therein issued by such trustee or trustees, or their
32 successors, for moneys loaned, materials furnished, labor performed and
33 any other indebtedness incurred after said trust mortgage shall have
34 been recorded, and for expenses in connection with said trust mortgage,
35 and shall also be subordinate to the lien of the bond and mortgage or
36 note and mortgage, given to secure the amount agreed to be advanced
37 under such contract for a building loan to the extent of the amount
38 which shall be advanced by the holder of such bond and mortgage or such
39 note and mortgage to the trustee or trustees, or their successors, under
40 such assignment. The provisions of this section shall apply to all bonds
41 and mortgages and notes and mortgages and all assignments of moneys due,
42 or to become due under building loan contracts executed by such owner,
43 in like manner, and recorded or filed, from time to time as hereinbefore
44 provided. In case of an assignment to trustees under the provisions of
45 this section, the trustees and their successors shall be the agents of
46 the assignor to receive and receipt for any and all sums advanced by the
47 holder of the building loan bond and mortgage or the building loan note
48 and mortgage under the building loan contract and such assignment. No
49 lienor shall have any priority over the bond and mortgage or note and
50 mortgage given to secure the money agreed to be advanced under a build-
51 ing loan contract or over the advances made thereunder, by reason of any
52 act preceding the making and approval of such assignment.
53 § 15. Section 38 of the lien law, as amended by chapter 859 of the
54 laws of 1930, is amended to read as follows:
55 § 38. Itemized statement may be required of lienor. A lienor who has
56 filed a notice of mechanic's lien shall, on demand in writing, deliver
A. 766 12
1 to the owner or contractor making such demand a statement in writing
2 which shall set forth the items of labor and/or material and the value
3 thereof which make up the amount for which he claims a lien, and which
4 shall also set forth the terms of the contract under which such items
5 were furnished. The statement shall be verified by the lienor or his
6 agent in the form required for the verification of notices in section
7 nine of this [chapter] article. If the lienor shall fail to comply with
8 such a demand within five days after the same shall have been made by
9 the owner or contractor, or if the lienor delivers an insufficient
10 statement, the person aggrieved may petition the supreme court of this
11 state or any justice thereof, or the county court of the county where
12 the premises are situated, or the county judge of such county for an
13 order directing the lienor within a time specified in the order to
14 deliver to the petitioner the statement required by this section. Two
15 days' notice in writing of such application shall be served upon the
16 lienor. Such service shall be made in the manner provided by law for the
17 personal service of a summons. The court or a justice or judge thereof
18 shall hear the parties and upon being satisfied that the lienor has
19 failed, neglected or refused to comply with the requirements of this
20 section shall have an appropriate order directing such compliance. In
21 case the lienor fails to comply with the order so made within the time
22 specified, then upon five days' notice to the lienor, served in the
23 manner provided by law for the personal service of a summons, the court
24 or a justice or judge thereof may make an order cancelling the lien.
25 § 16. Section 39 of the lien law, as added by chapter 859 of the laws
26 of 1930, is amended to read as follows:
27 § 39. Lien wilfully exaggerated is void. In any action or proceeding
28 to enforce a mechanic's lien upon a private or public improvement or an
29 employee's lien, or in which the validity of the lien is an issue, if
30 the court shall find that a lienor has wilfully exaggerated the amount
31 for which he claims a lien as stated in his notice of lien, his lien
32 shall be declared to be void and no recovery shall be had thereon. No
33 such lienor shall have a right to file any other or further lien for the
34 same claim. A second or subsequent lien filed in contravention of this
35 section may be vacated upon application to the court on two days'
36 notice.
37 § 17. Section 39-a of the lien law, as added by chapter 859 of the
38 laws of 1930, is amended to read as follows:
39 § 39-a. Liability of lienor where lien has been declared void on
40 account of wilful exaggeration. Where in any action or proceeding to
41 enforce a mechanic's lien upon a private or public improvement or an
42 employee's lien the court shall have declared said lien to be void on
43 account of wilful exaggeration the person filing such notice of lien
44 shall be liable in damages to the owner or contractor. The damages which
45 said owner or contractor shall be entitled to recover, shall include the
46 amount of any premium for a bond given to obtain the discharge of the
47 lien or the interest on any money deposited for the purpose of discharg-
48 ing the lien, reasonable attorney's fees for services in securing the
49 discharge of the lien, and, in an action or proceeding to enforce a
50 mechanic's lien, an amount equal to the difference by which the amount
51 claimed to be due or to become due as stated in the notice of lien
52 exceeded the amount actually due or to become due thereon.
53 § 18. Section 40 of the lien law, as amended by chapter 515 of the
54 laws of 1929, is amended to read as follows:
55 § 40. Construction of article. This article is to be construed in
56 connection with article two of this chapter, and provides proceedings
A. 766 13
1 for the enforcement of employee's liens on real property, as well as
2 liens for labor performed and materials furnished in the improvement of
3 real property, created by virtue of such article.
4 § 19. Section 41 of the lien law, as amended by chapter 807 of the
5 laws of 1952, is amended to read as follows:
6 § 41. Enforcement of mechanic's or employee's lien on real property. A
7 mechanic's lien or employee's lien on real property may be enforced
8 against such property, and against a person liable for the debt upon
9 which the lien is founded, by an action, by the lienor, his assignee or
10 legal representative, in the supreme court or in a county court other-
11 wise having jurisdiction, regardless of the amount of such debt, or in a
12 court which has jurisdiction in an action founded on a contract for a
13 sum of money equivalent to the amount of such debt.
14 § 20. Section 43 of the lien law, as amended by chapter 310 of the
15 laws of 1962, is amended to read as follows:
16 § 43. Action in a court of record; consolidation of actions. The
17 provisions of the real property actions and proceedings law relating to
18 actions for the foreclosure of a mortgage upon real property, and the
19 sale and the distribution of the proceeds thereof apply to actions in a
20 court of record, to enforce mechanics' liens and employees' liens on
21 real property, except as otherwise provided in this article. If actions
22 are brought by different lienors in a court of record, the court in
23 which the first action was brought, may, upon its own motion, or upon
24 the application of any party in any of such actions, consolidate all of
25 such actions.
26 § 21. Section 46 of the lien law, as amended by chapter 515 of the
27 laws of 1929, is amended to read as follows:
28 § 46. Action in a court not of record. If an action to enforce a
29 mechanic's lien or employee's lien against real property is brought in a
30 court not of record, it shall be commenced by the personal service upon
31 the owner of a summons and complaint verified in the same manner as a
32 complaint in an action in a court of record. The complaint must set
33 forth substantially the facts contained in the notice of lien, and the
34 substance of the agreement under which the labor was performed or the
35 materials were furnished, or if the lien is based upon a wage claim as
36 defined in section two of this chapter, the basis for such wage claim.
37 The form and contents of the summons shall be the same as provided by
38 law for the commencement of an action upon a contract in such court. The
39 summons must be returnable not less than twelve nor more than twenty
40 days after the date of the summons, or if service is made by publica-
41 tion, after the day of the last publication of the summons. Service
42 must be made at least eight days before the return day.
43 § 22. Section 50 of the lien law, as amended by chapter 515 of the
44 laws of 1929, is amended to read as follows:
45 § 50. Execution. Execution may be issued upon a judgment obtained in
46 an action to enforce a mechanic's lien or an employee's lien against
47 real property in a court not of record, which shall direct the officer
48 to sell the title and interest of the owner in the premises, upon which
49 the lien set forth in the complaint existed at the time of filing the
50 notice of lien.
51 § 23. Section 53 of the lien law, as amended by chapter 515 of the
52 laws of 1929, is amended to read as follows:
53 § 53. Costs and disbursements. If an action is brought to enforce a
54 mechanic's lien or an employee's lien against real property in a court
55 of record, the costs and disbursements shall rest in the discretion of
56 the court, and may be awarded to the prevailing party. The judgment
A. 766 14
1 rendered in such an action shall include the amount of such costs and
2 specify to whom and by whom the costs are to be paid. If such action is
3 brought in a court not of record, they shall be the same as allowed in
4 civil actions in such court. The expenses incurred in serving the
5 summons by publication may be added to the amount of costs now allowed
6 in such court.
7 § 24. Section 59 of the lien law, as amended by chapter 515 of the
8 laws of 1929, is amended to read as follows:
9 § 59. Vacating of a [mechanic's] lien; cancellation of bond; return of
10 deposit, by order of court. 1. A mechanic's lien notice of which has
11 been filed on real property or a bond given to discharge the same may be
12 vacated and cancelled or a deposit made to discharge a lien pursuant to
13 section twenty of this chapter may be returned, by an order of a court
14 of record. Before such order shall be granted, a notice shall be served
15 upon the lienor, either personally or by leaving it as his last known
16 place of residence, with a person of suitable age, with directions to
17 deliver it to the lienor. Such notice shall require the lienor to
18 commence an action to enforce the lien, within a time specified in the
19 notice, not less than thirty days from the time of service, or show
20 cause at a special term of a court of record, or at a county court, in a
21 county in which the property is situated, at a time and place specified
22 therein, why the notice of lien filed or the bond given should not be
23 vacated and cancelled, or the deposit returned, as the case may be.
24 Proof of such service and that the lienor has not commenced the action
25 to foreclose such lien, as directed in the notice, shall be made by
26 affidavit, at the time of applying for such order.
27 2. An employee's lien notice of which has been filed on real property
28 or a bond given to discharge the same may be vacated and cancelled or a
29 deposit made to discharge a lien pursuant to section twenty of this
30 chapter may be returned, by an order of a court of record. Before such
31 order shall be granted, a notice shall be served upon the lienor, either
32 personally or by leaving it at his last known place of residence or
33 attorney's place of business, with a person of suitable age, with
34 directions to deliver it to the lienor. Such notice shall require the
35 lienor to commence an action to enforce the lien, or to commence an
36 action to obtain judgment on the wage claim upon which the lien was
37 established, within a time specified in the notice, not less than thirty
38 days from the time of service, or show cause at a special term of a
39 court of record, or at a county court, in a county in which the property
40 is situated, at a time and place specified therein, why the notice of
41 lien filed or the bond given should not be vacated and cancelled, or the
42 deposit returned, as the case may be. Proof of such service and that the
43 lienor has not commenced the action to foreclose such lien or an action
44 to obtain judgment on the wage claim upon which the lien was estab-
45 lished, as directed in the notice, shall be made by affidavit, at the
46 time of applying for such order.
47 § 25. Section 62 of the lien law, as amended by chapter 697 of the
48 laws of 1934, is amended to read as follows:
49 § 62. Bringing in new parties. A lienor who has filed a notice of lien
50 after the commencement of an action in a court of record to foreclose or
51 enforce an employee's lien or a mechanic's lien against real property or
52 a public improvement, may at any time up to and including the day
53 preceding the day on which the trial of such action is commenced, make
54 application upon notice to the plaintiff or his attorney in such action,
55 to be made a party therein. Upon good cause shown, the court must order
56 such lienor to be brought in by amendment. If the application is made by
A. 766 15
1 any other party in said action to make such lienor or other person a
2 party, the court may in its discretion direct such lienor or other
3 person to be brought in by like amendment. The order to be entered on
4 such application shall provide the time for and manner of serving the
5 pleading of such additional lienor or other person and shall direct that
6 the pleadings, papers and proceedings of the other several parties in
7 such action, shall be deemed amended, so as not to require the making or
8 serving of papers other than said order to effectuate such amendment,
9 and shall further provide that the allegations in the answer of such
10 additional lienor or other person shall, for the purposes of the action,
11 be deemed denied by the other parties therein. The action shall be so
12 conducted by the court as not to cause substantially any delay in the
13 trial thereof. The bringing in of such additional lienor or other
14 person shall be without prejudice to the proceedings had, and if the
15 action be on the calendar of the court, same shall retain its place on
16 such calendar without the necessity of serving a new note of issue and
17 new notices of trial.
18 § 26. Subdivision 3 of section 199-a of the labor law, as amended by
19 chapter 564 of the laws of 2010, is amended to read as follows:
20 3. Each employee and his or her authorized representative shall be
21 notified in writing, of the termination of the commissioner's investi-
22 gation of the employee's complaint and the result of such investigation,
23 of any award and collection of back wages and civil penalties, and of
24 any intent to seek criminal penalties. In the event that criminal penal-
25 ties are sought the employee and his or her authorized representative
26 shall be notified of the outcome of prosecution.
27 § 27. Subdivision 2 of section 663 of the labor law, as amended by
28 chapter 564 of the laws of 2010, is amended to read as follows:
29 2. By commissioner. On behalf of any employee paid less than the wage
30 to which the employee is entitled under the provisions of this article,
31 the commissioner may bring any legal action necessary, including admin-
32 istrative action, to collect such claim, and the employer shall be
33 required to pay the full amount of the underpayment, plus costs, and
34 unless the employer proves a good faith basis to believe that its under-
35 payment was in compliance with the law, an additional amount as liqui-
36 dated damages. Liquidated damages shall be calculated by the commission-
37 er as no more than one hundred percent of the total amount of
38 underpayments found to be due the employee. In any action brought by the
39 commissioner in a court of competent jurisdiction, liquidated damages
40 shall be calculated as an amount equal to one hundred percent of under-
41 payments found to be due the employee. Each employee or his or her
42 authorized representative shall be notified in writing of the outcome of
43 any legal action brought on the employee's behalf pursuant to this
44 section.
45 § 28. Subdivision 5 of section 6201 of the civil practice law and
46 rules, as amended by chapter 860 of the laws of 1977 and as renumbered
47 by chapter 618 of the laws of 1992, is amended and a new subdivision 6
48 is added to read as follows:
49 5. the cause of action is based on a judgment, decree or order of a
50 court of the United States or of any other court which is entitled to
51 full faith and credit in this state, or on a judgment which qualifies
52 for recognition under the provisions of article 53[.] of this chapter;
53 or
54 6. the cause of action is based on wage claims. "Wage claims," when
55 used in this chapter, shall include any claims of violations of articles
56 five, six, and nineteen of the labor law, section two hundred fifteen of
A. 766 16
1 the labor law, and the related regulations or wage orders promulgated by
2 the commissioner of labor, including but not limited to any claims of
3 unpaid, minimum, overtime, and spread-of-hours pay, unlawfully retained
4 gratuities, unlawful deductions from wages, unpaid commissions, unpaid
5 benefits and wage supplements, and retaliation, and any claims pursuant
6 to 18 U.S.C. § 1595, 29 U.S.C. § 201 et seq., and/or employment contract
7 as well as the concomitant liquidated damages and penalties authorized
8 pursuant to the labor law, the Fair Labor Standards Act, or any employ-
9 ment contract.
10 § 29. Section 6210 of the civil practice law and rules, as added by
11 chapter 860 of the laws of 1977, is amended to read as follows:
12 § 6210. Order of attachment on notice; temporary restraining order;
13 contents. Upon a motion on notice for an order of attachment, the court
14 may, without notice to the defendant, grant a temporary restraining
15 order prohibiting the transfer of assets by a garnishee as provided in
16 subdivision (b) of section 6214. When attachment is sought pursuant to
17 subdivision six of section 6201, and if the employer contests the
18 motion, the court shall hold a hearing within ten days of when the
19 employer's response to plaintiffs' motion for attachment is due. The
20 contents of the order of attachment granted pursuant to this section
21 shall be as provided in subdivision (a) of section 6211.
22 § 30. Subdivision (b) of section 6211 of the civil practice law and
23 rules, as amended by chapter 566 of the laws of 1985, is amended to read
24 as follows:
25 (b) Confirmation of order. Except where an order of attachment is
26 granted on the ground specified in subdivision one or six of section
27 6201, an order of attachment granted without notice shall provide that
28 within a period not to exceed five days after levy, the plaintiff shall
29 move, on such notice as the court shall direct to the defendant, the
30 garnishee, if any, and the sheriff, for an order confirming the order of
31 attachment. Where an order of attachment without notice is granted on
32 the ground specified in subdivision one or six of section 6201, the
33 court shall direct that the statement required by section 6219 be served
34 within five days, that a copy thereof be served upon the plaintiff, and
35 the plaintiff shall move within ten days after levy for an order
36 confirming the order of attachment. If the plaintiff upon such motion
37 shall show that the statement has not been served and that the plaintiff
38 will be unable to satisfy the requirement of subdivision (b) of section
39 6223 until the statement has been served, the court may grant one exten-
40 sion of the time to move for confirmation for a period not to exceed ten
41 days. If plaintiff fails to make such motion within the required period,
42 the order of attachment and any levy thereunder shall have no further
43 effect and shall be vacated upon motion. Upon the motion to confirm, the
44 provisions of subdivision (b) of section 6223 shall apply. An order of
45 attachment granted without notice may provide that the sheriff refrain
46 from taking any property levied upon into his actual custody, pending
47 further order of the court.
48 § 31. Subdivisions (b) and (e) of rule 6212 of the civil practice law
49 and rules, subdivision (b) as separately amended by chapters 15 and 860
50 of the laws of 1977 and subdivision (e) as added by chapter 860 of the
51 laws of 1977, are amended to read as follows:
52 (b) Undertaking. [On] 1. Except where an order of attachment is sought
53 on the ground specified in subdivision six of section 6201, on a motion
54 for an order of attachment, the plaintiff shall give an undertaking, in
55 a total amount fixed by the court, but not less than five hundred
56 dollars, a specified part thereof conditioned that the plaintiff shall
A. 766 17
1 pay to the defendant all costs and damages, including reasonable attor-
2 ney's fees, which may be sustained by reason of the attachment if the
3 defendant recovers judgment or if it is finally decided that the plain-
4 tiff was not entitled to an attachment of the defendant's property, and
5 the balance conditioned that the plaintiff shall pay to the sheriff all
6 of his allowable fees.
7 2. On a motion for an attachment pursuant to subdivision six of
8 section 6201, the court shall order that the plaintiff give an accessi-
9 ble undertaking of no more than five hundred dollars, or in the alterna-
10 tive, may waive the undertaking altogether. The attorney for the plain-
11 tiff shall not be liable to the sheriff for such fees. The surety on the
12 undertaking shall not be discharged except upon notice to the sheriff.
13 (e) Damages. [The] Except where an order of attachment is sought on
14 the ground specified in subdivision six of section 6201, the plaintiff
15 shall be liable to the defendant for all costs and damages, including
16 reasonable attorney's fees, which may be sustained by reason of the
17 attachment if the defendant recovers judgment, or if it is finally
18 decided that the plaintiff was not entitled to an attachment of the
19 defendant's property. Plaintiff's liability shall not be limited by the
20 amount of the undertaking.
21 § 32. Paragraph (b) of section 624 of the business corporation law, as
22 amended by chapter 449 of the laws of 1997, is amended to read as
23 follows:
24 (b) Any person who shall have been a shareholder of record of a corpo-
25 ration, or who is or shall have been a laborer, servant or employee,
26 upon at least five days' written demand shall have the right to examine
27 in person or by agent or attorney, during usual business hours, its
28 minutes of the proceedings of its shareholders and record of sharehold-
29 ers and to make extracts therefrom for any purpose reasonably related to
30 such person's interest as a shareholder, laborer, servant or employee,
31 provided the purpose reasonably related to a person's interest as a
32 laborer, servant or employee shall be to obtain the names, addresses,
33 and value of shareholders' interests in the corporation. Holders of
34 voting trust certificates representing shares of the corporation shall
35 be regarded as shareholders for the purpose of this section. Any such
36 agent or attorney shall be authorized in a writing that satisfies the
37 requirements of a writing under paragraph (b) of section 609 (Proxies).
38 A corporation requested to provide information pursuant to this para-
39 graph shall make available such information in written form and in any
40 other format in which such information is maintained by the corporation
41 and shall not be required to provide such information in any other
42 format. If a request made pursuant to this paragraph includes a request
43 to furnish information regarding beneficial owners, the corporation
44 shall make available such information in its possession regarding bene-
45 ficial owners as is provided to the corporation by a registered broker
46 or dealer or a bank, association or other entity that exercises fiduci-
47 ary powers in connection with the forwarding of information to such
48 owners. The corporation shall not be required to obtain information
49 about beneficial owners not in its possession.
50 § 33. Section 630 of the business corporation law, paragraph (a) as
51 amended by chapter 5 of the laws of 2016, paragraph (c) as amended by
52 chapter 746 of the laws of 1963, is amended to read as follows:
53 § 630. Liability of shareholders for wages due to laborers, servants or
54 employees.
55 (a) The ten largest shareholders, as determined by the fair value of
56 their beneficial interest as of the beginning of the period during which
A. 766 18
1 the unpaid services referred to in this section are performed, of every
2 domestic corporation or of any foreign corporation, when the unpaid
3 services were performed in the state, no shares of which are listed on a
4 national securities exchange or regularly quoted in an over-the-counter
5 market by one or more members of a national or an affiliated securities
6 association, shall jointly and severally be personally liable for all
7 debts, wages or salaries due and owing to any of its laborers, servants
8 or employees other than contractors, for services performed by them for
9 such corporation. [Before such laborer, servant or employee shall charge
10 such shareholder for such services, he shall give notice in writing to
11 such shareholder that he intends to hold him liable under this section.
12 Such notice shall be given within one hundred and eighty days after
13 termination of such services, except that if, within such period, the
14 laborer, servant or employee demands an examination of the record of
15 shareholders under paragraph (b) of section 624 (Books and records;
16 right of inspection, prima facie evidence) of this article, such notice
17 may be given within sixty days after he has been given the opportunity
18 to examine the record of shareholders. An action to enforce such liabil-
19 ity shall be commenced within ninety days after the return of an
20 execution unsatisfied against the corporation upon a judgment recovered
21 against it for such services.] The provisions of this paragraph shall
22 not apply to an investment company registered as such under an act of
23 congress entitled "Investment Company Act of 1940."
24 (b) For the purposes of this section, wages or salaries shall mean all
25 compensation and benefits payable by an employer to or for the account
26 of the employee for personal services rendered by such employee includ-
27 ing any concomitant liquidated damages, penalties, interest, attorney's
28 fees or costs. These shall specifically include but not be limited to
29 salaries, overtime, vacation, holiday and severance pay; employer
30 contributions to or payments of insurance or welfare benefits; employer
31 contributions to pension or annuity funds; and any other moneys properly
32 due or payable for services rendered by such employee.
33 (c) A shareholder who has paid more than his pro rata share under this
34 section shall be entitled to contribution pro rata from the other share-
35 holders liable under this section with respect to the excess so paid,
36 over and above his pro rata share, and may sue them jointly or severally
37 or any number of them to recover the amount due from them. Such recov-
38 ery may be had in a separate action. As used in this paragraph, "pro
39 rata" means in proportion to beneficial share interest. Before a share-
40 holder may claim contribution from other shareholders under this para-
41 graph, he shall[, unless they have been given notice by a laborer, serv-
42 ant or employee under paragraph (a),] give them notice in writing that
43 he intends to hold them so liable to him. Such notice shall be given by
44 him within twenty days after the date that [notice was given to him by]
45 he became aware that a laborer, servant or employee may seek to hold him
46 liable under paragraph (a).
47 § 34. Subdivision (c) of section 609 of the limited liability company
48 law, as amended by chapter 620 of the laws of 2019, is amended to read
49 as follows:
50 (c) Notwithstanding the provisions of subdivisions (a) and (b) of this
51 section, the ten members with the largest percentage ownership interest,
52 as determined as of the beginning of the period during which the unpaid
53 services referred to in this section are performed, of every domestic
54 limited liability company, or of any foreign limited liability company,
55 when the unpaid services were performed in the state, shall jointly and
56 severally be personally liable for all debts, wages or salaries due and
A. 766 19
1 owing to any of its laborers, servants or employees, for services
2 performed by them for such limited liability company. [Before such
3 laborer, servant or employee shall charge such member for such services,
4 he or she shall give notice in writing to such member that he or she
5 intends to hold such member liable under this section. Such notice shall
6 be given within one hundred eighty days after termination of such
7 services. An action to enforce such liability shall be commenced within
8 ninety days after the return of an execution unsatisfied against the
9 limited liability company upon a judgment recovered against it for such
10 services.] A member who has paid more than his or her pro rata share
11 under this section shall be entitled to contribution pro rata from the
12 other members liable under this section with respect to the excess so
13 paid, over and above his or her pro rata share, and may sue them jointly
14 or severally or any number of them to recover the amount due from them.
15 Such recovery may be had in a separate action. As used in this subdivi-
16 sion, "pro rata" means in proportion to percentage ownership interest.
17 Before a member may claim contribution from other members under this
18 section, he or she shall give them notice in writing that he or she
19 intends to hold them so liable to him or her.
20 § 35. Section 1102 of the limited liability company law is amended by
21 adding a new subdivision (e) to read as follows:
22 (e) Any person who is or shall have been a laborer, servant or employ-
23 ee of a limited liability company, upon at least five days' written
24 demand shall have the right to examine in person or by agent or attor-
25 ney, during usual business hours, records described in paragraph two of
26 subdivision (a) of this section throughout the period of time during
27 which such laborer, servant or employee provided services to such compa-
28 ny. A company requested to provide information pursuant to this para-
29 graph shall make available such records in written form and in any other
30 format in which such information is maintained by the company and shall
31 not be required to provide such information in any other format. Upon
32 refusal by the company or by an officer or agent of the company to
33 permit an inspection of the records described in this paragraph, the
34 person making the demand for inspection may apply to the supreme court
35 in the judicial district where the office of the company is located,
36 upon such notice as the court may direct, for an order directing the
37 company, its members or managers to show cause why an order should not
38 be granted permitting such inspection by the applicant. Upon the return
39 day of the order to show cause, the court shall hear the parties summar-
40 ily, by affidavit or otherwise, and if it appears that the applicant is
41 qualified and entitled to such inspection, the court shall grant an
42 order compelling such inspection and awarding such further relief as to
43 the court may seem just and proper. If the applicant is found to be
44 qualified and entitled to such inspection, the company shall pay all
45 reasonable attorney's fees and costs of said applicant related to the
46 demand for inspection of the records.
47 § 36. This act shall take effect on the thirtieth day after it shall
48 have become a law. The procedures and rights created in this act may be
49 used by employees, laborers or servants in connection with claims for
50 liabilities that arose prior to the effective date.
