BILL NUMBER: S8387
SPONSOR: RAMOS
 
TITLE OF BILL:
An act to amend the workers' compensation law, in relation to authoriz-
ing certain penalties to be assessed against members of limited liabil-
ity companies and partners of limited liability partnerships and part-
nerships
 
PURPOSE OF THE BILL:
The purpose of this bill is to update the law to remove an inequity a
loophole in the law. Currently, directors and officers of corporations
may have penalties assessed against them for failure to maintain
required workers' compensation coverage, however there is no similar
provision for members of LLPs and LLCs.
 
SUMMARY OF PROVISIONS:
The bill text adds references to limited liability company, limited
liability partnership or partnerships to section 26-a, 52, 131, and 220
of the Workers' Compensation Law (WCL).
A paragraph is added to section 26-a of the WCL as well mirroring the
language regarding partnerships and officers for members of LLCs or
self-employed persons.
Some language throughout these sections were also changed to gender-neu-
tral terms.
 
JUSTIFICATION:
It is fundamental to a functioning workers' compensation system that New
York businesses have the appropriate workers' compensation insurance to
protect their workforce. Currently, the workers' compensation laws hold
corporate officers, such as president, secretary, and treasurer of
corporations personally liable for their failure to secure the payment
of compensation for their employees. In that spirit, the current laws as
written need to be amended to consider the various business forms that
have grown in use exponentially, to close the loophole that allows
certain employers to evade personal liability when failing to comply
with New York's strong worker protection laws. Under the current law, an
uneven playing field has been created by allowing for an exemption from
personal liability for members and partners of limited liability compa-
nies and limited liability partnerships, respectively, for their failure
to secure compensation insurance. While officers of corporations are
held personally liable for such failure, members and partners of both
limited liability companies and limited liability partnerships evade
such personal liability under the current laws.
 
LEGISLATIVE HISTORY:
This proposal was introduced in the Senate (Departmental Bill 79) on
5/31/23 as S7487.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This bill would take effect immediately.