BILL NUMBER: S4188B
SPONSOR: COMRIE
 
TITLE OF BILL:
An act to amend the penal law, in relation to the misappropriation of
payroll funds
 
PURPOSE:
The purpose of this bill is to establish the crime of misappropriation
of payroll funds in New York.
 
SUMMARY OF PROVISIONS:
Section one of the bill adds § 165.80 to the penal law to establish the
crime of misappropriation of payroll funds, designating it a class A
misdemeanor, and makes a person guilty of such when they delayed trans-
fer of funds which they know are designated for use as employee payroll
funds or as payment of payroll taxes and intentionally prevent the funds
from being used for their designated purpose. This section stipulates
that a delay in the transfer of funds when related to an investigation
shall not be considered a misappropriation of payroll funds. This
section also states that a payroll processing company shall not be
responsible for an employer's failure to provide sufficient funds.
Section two of the bill provides 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 be 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. This includes ensuring that corporations are
also held criminally liable when conduct is engaged in by an agent of a
corporation, while acting within the scope of their employment and on
behalf of the corporation while perpetrating the crime of misappropri-
ation of payroll funds.
 
PRIOR LEGISLATIVE HISTORY:
2025: 3382-A - Rules / S.4188-A - Passed Senate
2023-24: A.3280 - Rules / S.7205 - Passed Senate
2022: A.2425 - Rules / S.3791 - Passed Senate
2021: A.2425 - Codes / S.3791 - Passed Senate
2019-20: A.8649-A - Codes/ S.S6725-A - Passed Senate
 
FISCAL IMPLICATIONS:
None
 
EFFECTIVE DATE:
Immediately.

Statutes affected:
S4188: 20.20 penal law, 20.20(2) penal law