BILL NUMBER: S4477
SPONSOR: RAMOS
 
TITLE OF BILL:
An act to amend the labor law, in relation to employers' obligations to
report wages for the purposes of unemployment benefits, the payment of
unemployment benefits, and employer penalties for non-compliance
 
PURPOSE:
The purpose of this bill is to ensure that all employers that have been
ruled covered by New òYork's unemployment insurance laws report their
employees' wages and contribute to the UI Trust Fund.
 
SUMMARY OF PROVISIONS:
Section One. Amends section 570 of the Labor Law to include those
employers presumed liable. pursuant to the definition set out in
Section two of the bill, who arc required to pay contributions to the
New York Unemployment Insurance Trust Fund (UI Trust Fund).
Section Two. States that the Department of Labor determines that any
person is an employee under the UI law, there shall be a presumption
that such determination applies to all others performing similar
services for the employer and such employer is required to report the
wages of all such employees and make contributions based on the wages of
all such employees.
Section Three. States that in any determination by the Department of
Labor or by the UI Appeal Board that a claimant is an employee under the
UI law, the employer of such claimant shall be considered an employer of
all those performing similar services for the employer. The obligations
of such employer to report their employees' earnings shall continue
unless and until reversed by administrative or judicial review and all
further appeals have been exhausted.
Section Four. States that lack of knowledge and/or a misunderstanding
regarding the presumption of liability shall not constitute good cause
for failure to comply with the wage reporting laws. This
Section also increases the penalties for employers who provide complete
and correct wage reporting. Further, the Section also requires the DOL
to apply to the state Supreme Court for an order requiring the employer
to report their employees' wages. In addition, the Section provides a
private right of action allowing workers to require employers to report
their employees' wages. Increases the penalty for those employers who
fraudulently avoid contributions to the UI Trust Fund and expands the
definition of fraud to include an employer who knew or should have known
that its employees were covered under the UI law.
Section Five. Amendments to Section 570 Sub-Section 4 of LL: Ilan
employer continues to pay employees as independent contractors after
being determined employees, it is considered fraud. This makes the defi-
nition of fraud clearer and increases the fraud fees from 50 to 100
percent.
Section Six. Amendments to Section 597 pf LL: Amends to ensure the
commissioner issued a monetary benefit determination with an explana-
tion. Suggested adding language access here.
Section Seven. Amendments to Section 620 pf LL: Amends for consistency
to include that once employee status is determined, it is established
for all similar services.
Section Eight. Effective Date
 
JUSTIFICATION:
Many NY employers have refused to pay the ordinary Unemployment Insur-
ance (UI) taxes that all other NY employers must pay. They have also
been failing to report their employees' wages to the NYS Department of
Labor (D01.), which slows down the delivery of crucial Unemployment
Insurance (UI) benefits by months. This is all despite the fact that
state courts and agencies have repeatedly ruled, for years, that many of
these corporations are covered by NY's UI law and their workers are
entitled to receive benefits. These employers' failure to pay into the
UI Trust. Fund has added millions to the UI Trust Fund debt. The large
UI Trust Fund debt, currently 6.8 billion dollars, has triggered higher
UI tax rates for the rest of NY employers and has hurt workers by forc-
ing NY's maximum weekly benefit rate, the lowest in the Northeast
Region, to remain frozen at 5504 per week since 2019. Not only is the
failure of employers to report wages bad for workers. it also creates an
unequal playing field with employers who do the right thing and pay into
the Trust Fund while others skirt the system, gaining an unfair advan-
tage by paying nothing.
The majority of these employers fail to make contributions because they
misclassify their workers as independent contractors instead of employ-
ees. When employers fail to report a worker's wages to New York State,
the worker is unable to collect UI if they lose their job because the
DOL does not have a record of earnings upon which to determine monetary
eligibility. The burden is then put on the unemployed worker to prove
not only the amount of their earnings but also that they are an employee
and not an independent contractor.
Misclassified workers are forced to request a reconsideration to the
DOL, answer numerous questionnaires and provide extensive documentation
of wages - a process that takes at least 3 months and often more than 6
months to complete. Most misclassified workers either don't apply for UI
because they don't know they are eligible or give tip after they have
applied because of the excessive bureaucracy.
New York Ul law requires employers to make contributions to the UlTrust
Fund based on the amount of wages that they pay their employees. The DOL
uses audits of employers to determine if their workers are employees
under the NY Ul law and then assesses contributions and penalties.
Audits are backward-looking, which means they determine liability for
failure to contribute in the past, but do not then require the employers
to report their current workers' wages. The current audit process is
ineffective because the DOL does not require companies that have been
determined to be employers to start reporting wages and making contrib-
utions for its similarly situated employees going forward. In addition,
penalties for failing to report wages and make contributions are
extremely low, which provides little incentive for employers to follow
the law. This bill addresses the inadequacies of the current enforcement
mechanisms by requiring employers to report their workers' earnings and
contribute to the UI Trust Fund. It creates a presumption that DOL
determinations finding individual workers to he employees apply to all
of the employer's workers who provide similar services and makes clear
that employers must report all of their employees' earnings and make
contributions on those earnings. The bill also substantially increases
penalties for failure to report earnings and make contributions and
creates a new tool beyond audits to deal with non-complying employers by
requiring the DOL to apply to the state Supreme Court for an order
requiring the non-complying employer to report their employees' wages.
In addition, the bill provides a private right of action to allow work-
ers to require employers to report their employees' wages. Finally, the
bill makes it easier and faster to establish UI monetary eligibility for
workers of employers who fail to report their wages.
 
LEGISLATIVE HISTORY:
2024: S.8555 - Referred to Labor
 
FISCAL IMPACT:
To he Determined.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S4477: 570 labor law, 570(1) labor law, 572 labor law, 575-a labor law, 570(4) labor law, 620 labor law, 620(1) labor law