Bill Text: NY A00046 | 2023-2024 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: 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.

Spectrum: Partisan Bill (Democrat 26-1)

Status: (Introduced) 2024-01-03 - referred to codes [A00046 Detail]

Download: New_York-2023-A00046-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                           46

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                       (Prefiled)

                                     January 4, 2023
                                       ___________

        Introduced  by  M.  of  A.  L. ROSENTHAL,  AUBRY, TAYLOR, SIMON, SAYEGH,
          DINOWITZ, REYES, COLTON,  MAMDANI,  GONZALEZ-ROJAS,  RAMOS,  MITAYNES,
          FORREST,  OTIS,  EPSTEIN, GLICK, FALL -- 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  section  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

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00720-01-3

        A. 46                               2

     1  related regulations and wage orders promulgated by the  commissioner,  a
     2  claim  for  wages  due to an employee pursuant to an employment contract
     3  that were unpaid in violation of that  contract,  or  a  claim  that  an
     4  employee has suffered a violation of 29 U.S.C. § 206 or 207.
     5    §  2. Section 3 of the lien law, as amended by chapter 137 of the laws
     6  of 1985, is amended to read as follows:
     7    § 3. Mechanic's lien  and  employee's  lien  on  [real]  property.  1.
     8  Mechanic's  lien.  A  contractor,  subcontractor,  laborer, materialman,
     9  landscape gardener, nurseryman or person or corporation selling fruit or
    10  ornamental trees, roses, shrubbery, vines and small fruits, who performs
    11  labor or furnishes materials for the improvement of real  property  with
    12  the  consent  or  at  the request of the owner thereof, or of his or her
    13  agent, contractor or subcontractor, and any trust fund to which benefits
    14  and wage supplements are due or payable for the benefit of  such  labor-
    15  ers,  shall have a lien for the principal and interest, of the value, or
    16  the agreed price, of such labor, including benefits and wage supplements
    17  due or payable for the benefit of any laborer,  or  materials  upon  the
    18  real property improved or to be improved and upon such improvement, from
    19  the  time of filing a notice of such lien as prescribed in this chapter.
    20  Where the contract for an improvement is made with a husband or wife and
    21  the property belongs to the other or both, the husband or wife contract-
    22  ing shall also be presumed to be the agent of  the  other,  unless  such
    23  other  having  knowledge of the improvement shall, within ten days after
    24  learning of the contract give the contractor written notice  of  his  or
    25  her  refusal  to  consent  to the improvement. Within the meaning of the
    26  provisions of this chapter, materials actually manufactured for but  not
    27  delivered  to  the  real  property, shall also be deemed to be materials
    28  furnished.
    29    2. Employee's lien. An employee who has a wage claim as that  term  is
    30  defined in subdivision twenty-three of section two of this chapter shall
    31  have  a lien on his or her employer's interest in property for the value
    32  of that employee's wage claim arising out of the  employment,  including
    33  liquidated  damages pursuant to subdivision one-a of section one hundred
    34  ninety-eight, section six hundred sixty-three  or  section  six  hundred
    35  eighty-one  of  the  labor law, or 29 U.S.C. § 216 (b), from the time of
    36  filing a notice of such lien as prescribed in this chapter.  An  employ-
    37  ee's lien based on a wage claim may be had against the employer's inter-
    38  est  in  real  property  and against the employer's interest in personal
    39  property that can  be  sufficiently  described  within  the  meaning  of
    40  section  9-108 of the uniform commercial code, except that an employee's
    41  lien shall not extend to deposit accounts or goods as  those  terms  are
    42  defined in section 9-102 of the uniform commercial code.  The department
    43  of  labor and the attorney general may obtain an employee's lien for the
    44  value of wage claims of the employees  who  are  the  subject  of  their
    45  investigations, court actions or administrative agency actions.
    46    3.  As  used  in  this  article and unless otherwise specified, a lien
    47  shall mean an employee's lien or a mechanic's lien.
    48    § 3. Subdivisions 1 and 2 of section 4 of the lien law, subdivision  1
    49  as amended by chapter 515 of the laws of 1929 and subdivision 2 as added
    50  by chapter 704 of the laws of 1985, are amended to read as follows:
    51    (1) [Such] A mechanic's or employee's lien and employee's lien against
    52  real  property  shall  extend to the owner's right, title or interest in
    53  the real property and improvements, existing at the time of  filing  the
    54  notice  of  lien,  or thereafter acquired, except as hereinafter in this
    55  article provided. If an owner assigns his or her interest in  such  real
    56  property  by  a  general assignment for the benefit of creditors, within

        A. 46                               3

     1  thirty days prior to such filing, the lien shall extend to the  interest
     2  thus  assigned.  If any part of the real property subjected to such lien
     3  be removed by the owner or by any other person, at any time  before  the
     4  discharge  thereof,  such  removal  shall  not  affect the rights of the
     5  lienor, either in respect to the remaining real property, or the part so
     6  removed. If labor  is  performed  for,  or  materials  furnished  to,  a
     7  contractor  or  subcontractor  for  an  improvement, the mechanic's lien
     8  shall not be for a sum greater than the sum earned  and  unpaid  on  the
     9  contract  at  the  time of filing the notice of lien, and any sum subse-
    10  quently earned thereon. In no case shall the owner be liable to  pay  by
    11  reason  of  all  mechanic's liens created pursuant to this article a sum
    12  greater than the value or  agreed  price  of  the  labor  and  materials
    13  remaining unpaid, at the time of filing notices of such liens, except as
    14  hereinafter provided.
    15    (2)  [Such]  A  mechanic's  or employee's lien shall not extend to the
    16  owner's right, title or interest  in  real  property  and  improvements,
    17  existing  at  the  time of filing the notice of lien if such lien arises
    18  from the failure of a lessee of the right to explore, develop or produce
    19  natural gas or oil, to pay for, compensate or render value for  improve-
    20  ments  made  with  the  consent  or  at  the request of such lessee by a
    21  contractor, subcontractor, materialman,  equipment  operator  or  owner,
    22  landscaper,  nurseryman,  or person or corporation who performs labor or
    23  furnishes materials for the exploration, development, or  production  of
    24  oil  or  natural  gas  or  otherwise improves such leased property. Such
    25  mechanic's or employee's lien shall extend to the improvements made  for
    26  the  exploration, development and production of oil and natural gas, and
    27  the working interest held by a lessee of the right to  explore,  develop
    28  or produce oil and natural gas.
    29    §  4. The opening paragraph of section 4-a of the lien law, as amended
    30  by chapter 696 of the laws of 1959, is amended to read as follows:
    31    The proceeds of any insurance which by the terms  of  the  policy  are
    32  payable to the owner of real property improved, and actually received or
    33  to  be  received by him because of the destruction or removal by fire or
    34  other casualty of an improvement on which lienors have  performed  labor
    35  or services or for which they have furnished materials, or upon which an
    36  employee  has  established an employee's lien, shall after the owner has
    37  been reimbursed therefrom for premiums paid by him,  if  any,  for  such
    38  insurance,  be  subject to liens provided by this act to the same extent
    39  and in the same order of priority as the real property would  have  been
    40  had such improvement not been so destroyed or removed.
    41    §  5. Subdivisions 1, 2 and 5 of section 9 of the lien law, as amended
    42  by chapter 515 of the laws of 1929, are amended to read as follows:
    43    1. The name of the lienor, and either the residence of the  lienor  or
    44  the  name  and business address of the lienor's attorney, if any; and if
    45  the lienor is a partnership or a corporation, the  business  address  of
    46  such  firm, or corporation, the names of partners and principal place of
    47  business, and if a foreign corporation, its principal place of  business
    48  within the state.
    49    2. The name of the owner of the [real] property against whose interest
    50  therein a lien is claimed, and the interest of the owner as far as known
    51  to the lienor.
    52    5. The amount unpaid to the lienor for such labor or materials, or the
    53  amount  of the wage claim if a wage claim is the basis for establishment
    54  of the lien, the items of the wage claim and  the  value  thereof  which
    55  make up the amount for which the lienor claims a lien.

        A. 46                               4

     1    §  6. Subdivision 1 of section 10 of the lien law, as amended by chap-
     2  ter 367 of the laws of 2011, is amended to read as follows:
     3    1.  (a)  Notice of mechanic's lien may be filed at any time during the
     4  progress of the work and the furnishing of  the  materials,  or,  within
     5  eight months after the completion of the contract, or the final perform-
     6  ance  of the work, or the final furnishing of the materials, dating from
     7  the last item of work performed or materials furnished; provided, howev-
     8  er, that where the improvement is related to real property  improved  or
     9  to  be  improved with a single family dwelling, the notice of mechanic's
    10  lien may be filed at any time during the progress of the  work  and  the
    11  furnishing of the materials, or, within four months after the completion
    12  of  the  contract,  or  the  final performance of the work, or the final
    13  furnishing of the materials, dating from the last item of work performed
    14  or materials furnished; and provided further where the notice of mechan-
    15  ic's lien is for retainage, the notice of mechanic's lien may  be  filed
    16  within  ninety days after the date the retainage was due to be released;
    17  except that in the case of a mechanic's lien by a  real  estate  broker,
    18  the notice of mechanic's lien may be filed only after the performance of
    19  the  brokerage services and execution of lease by both lessor and lessee
    20  and only if a copy of the alleged written  agreement  of  employment  or
    21  compensation  is  annexed to the notice of lien, provided that where the
    22  payment pursuant to the written agreement of employment or  compensation
    23  is to be made in installments, then a notice of lien may be filed within
    24  eight  months after the final payment is due, but in no event later than
    25  a date five years after the first payment was made. For purposes of this
    26  section, the term "single family dwelling" shall not include a  dwelling
    27  unit which is a part of a subdivision that has been filed with a munici-
    28  pality  in which the subdivision is located when at the time the lien is
    29  filed, such property in the subdivision is owned by  the  developer  for
    30  purposes  other than his or her personal residence. For purposes of this
    31  section, "developer" shall mean  and  include  any  private  individual,
    32  partnership,  trust or corporation which improves two or more parcels of
    33  real property with single family dwellings pursuant to a  common  scheme
    34  or plan. [The]
    35    (b)  Notice of employee's lien may be filed at any time not later than
    36  three years following the end of the employment giving rise to the  wage
    37  claim.
    38    (c) A notice of lien, other than for a lien on personal property, must
    39  be filed in the clerk's office of the county where the property is situ-
    40  ated.  If  such property is situated in two or more counties, the notice
    41  of lien shall be filed in the office of the clerk of each of such  coun-
    42  ties.  The  county clerk of each county shall provide and keep a book to
    43  be called the "lien docket," which shall be suitably  ruled  in  columns
    44  headed  "owners,"  "lienors," "lienor's attorney," "property," "amount,"
    45  "time of filing," "proceedings had," in each of which he  or  she  shall
    46  enter  the  particulars  of  the notice, properly belonging therein. The
    47  date, hour and minute of the filing of each  notice  of  lien  shall  be
    48  entered  in the proper column. Except where the county clerk maintains a
    49  block index, the names of the owners shall be arranged in such  book  in
    50  alphabetical  order.  The  validity  of the lien and the right to file a
    51  notice thereof shall not be affected by the death of  the  owner  before
    52  notice  of  the  lien is filed.  A notice of employee's lien on personal
    53  property must be filed, together with  a  financing  statement,  in  the
    54  filing  office  as  set forth in section 9-501 of the uniform commercial
    55  code.

        A. 46                               5

     1    § 7. Section 11 of the lien law, as amended by chapter 147 of the laws
     2  of 1996, is amended to read as follows:
     3    §  11.  Service of copy of notice of lien.  1. Within five days before
     4  or thirty days after filing the notice of a mechanic's lien, the  lienor
     5  shall  serve  a copy of such notice upon the owner, if a natural person,
     6  (a) by delivering the same to him or her personally,  or  if  the  owner
     7  cannot  be  found, to his or her agent or attorney, or (b) by leaving it
     8  at his or her last known place of residence in the city or town in which
     9  the real property or some part thereof is situated,  with  a  person  of
    10  suitable  age  and  discretion,  or  (c) by registered or certified mail
    11  addressed to his or her last known place of residence, or  (d)  if  such
    12  owner  has  no  such residence in such city or town, or cannot be found,
    13  and he or she has no agent or  attorney,  by  affixing  a  copy  thereof
    14  conspicuously on such property, between the hours of nine o'clock in the
    15  forenoon  and  four  o'clock  in the afternoon; if the owner be a corpo-
    16  ration, said service shall be made (i) by delivering such  copy  to  and
    17  leaving  the same with the president, vice-president, secretary or clerk
    18  to the corporation, the cashier, treasurer or  a  director  or  managing
    19  agent  thereof,  personally,  within  the state, or (ii) if such officer
    20  cannot be found within the state by affixing a copy thereof conspicuous-
    21  ly on such property between the hours of nine o'clock  in  the  forenoon
    22  and  four  o'clock in the afternoon, or (iii) by registered or certified
    23  mail addressed to its last known place  of  business.  Failure  to  file
    24  proof  of  such  a service with the county clerk within thirty-five days
    25  after the notice of lien is filed shall terminate the notice as a  lien.
    26  Until  service of the notice has been made, as above provided, an owner,
    27  without knowledge of the lien, shall be protected in any payment made in
    28  good faith to any contractor or other person claiming a lien.
    29    2. Within five days before or thirty days after filing the  notice  of
    30  an  employee's  lien,  the lienor shall serve a copy of such notice upon
    31  the employer, if a natural person, (a) by delivering the same to him  or
    32  her  personally, or if the employer cannot be found, to his or her agent
    33  or attorney, or (b) by leaving it as his or  her  last  known  place  of
    34  residence  or business, with a person of suitable age and discretion, or
    35  (c) by registered or certified mail addressed to his or her  last  known
    36  place  of residence or business, or (d) if such employer owns real prop-
    37  erty, by affixing a copy thereof conspicuously on such property, between
    38  the hours of nine o'clock in the forenoon and four o'clock in the after-
    39  noon. The lienor also shall, within thirty days after filing the  notice
    40  of employee's lien, affix a copy thereof conspicuously on the real prop-
    41  erty  identified  in the notice of employee's lien, between the hours of
    42  nine o'clock in the forenoon and four o'clock in the afternoon.  If  the
    43  employer  be a corporation, said service shall be made (i) by delivering
    44  such copy to and leaving the same with  the  president,  vice-president,
    45  secretary  or  clerk  to  the  corporation,  the cashier, treasurer or a
    46  director or managing agent thereof, personally,  within  the  state,  or
    47  (ii) if such officer cannot be found within the state by affixing a copy
    48  thereof conspicuously on such property between the hours of nine o'clock
    49  in  the  forenoon  and four o'clock in the afternoon, or (iii) by regis-
    50  tered or certified mail addressed to its last known place  of  business,
    51  or  (iv)  by delivery to the secretary of the department of state in the
    52  same manner as required by subparagraph one of paragraph (b) of  section
    53  three  hundred  six  of  the business corporation law.   Failure to file
    54  proof of such a service with the county clerk  within  thirty-five  days
    55  after  the notice of lien is filed shall terminate the notice as a lien.
    56  Until service of the notice has been made, as above provided, an  owner,

        A. 46                               6

     1  without knowledge of the lien, shall be protected in any payment made in
     2  good faith to any other person claiming a lien.
     3    §  8.  Section  11-b of the lien law, as amended by chapter 147 of the
     4  laws of 1996, is amended to read as follows:
     5    § 11-b. Copy of notice of mechanic's lien to a contractor  or  subcon-
     6  tractor.    Within five days before or thirty days after filing a notice
     7  of mechanic's lien in accordance with section ten of this chapter or the
     8  filing of an amendment of notice of mechanic's lien in  accordance  with
     9  section twelve-a of this [chapter] article the lienor shall serve a copy
    10  of such notice or amendment by certified mail on the contractor, subcon-
    11  tractor,  assignee  or  legal  representative  for  whom  he  or she was
    12  employed or to whom he or she furnished materials or if the lienor is  a
    13  contractor or subcontractor to the person, firm or corporation with whom
    14  the contract was made. A lienor having a direct contractual relationship
    15  with  a  subcontractor  or a sub-subcontractor but not with a contractor
    16  shall also serve a copy of such notice or amendment by certified mail to
    17  the contractor. Failure to file proof of such a service with the  county
    18  clerk  within  thirty-five  days after the notice of lien is filed shall
    19  terminate the notice as a lien. Any lienor, or a person acting on behalf
    20  of a lienor, who fails to serve a copy of the notice of mechanic's  lien
    21  as  required  by  this section shall be liable for reasonable attorney's
    22  fees, costs and expenses,  as  determined  by  the  court,  incurred  in
    23  obtaining such copy.
    24    §  9.  Subdivision  1  of  section 12-a of the lien law, as amended by
    25  chapter 1048 of the laws of 1971, is amended to read as follows:
    26    1. Within sixty days after the original filing, a lienor may amend his
    27  or her lien upon twenty days notice to existing lienors, mortgagees  and
    28  the  owner,  provided  that no action or proceeding to enforce or cancel
    29  the mechanics' lien or employee's lien has been brought in the  interim,
    30  where  the purpose of the amendment is to reduce the amount of the lien,
    31  except the question of wilful exaggeration shall survive such amendment.
    32    § 10. Subdivision 1 of section 13 of the lien law, as amended by chap-
    33  ter 878 of the laws of 1947, is amended to read as follows:
    34    (1) [A] An employee's lien, or a lien for materials furnished or labor
    35  performed in the improvement of real property, shall have priority  over
    36  a  conveyance,  mortgage,  judgment or other claim against such property
    37  not recorded, docketed or filed at the time of the filing of the  notice
    38  of  such  lien,  except  as  hereinafter  in this chapter provided; over
    39  advances made upon any mortgage or other encumbrance thereon after  such
    40  filing,  except  as  hereinafter  in this article provided; and over the
    41  claim of a creditor who has not furnished materials or  performed  labor
    42  upon such property, if such property has been assigned by the owner by a
    43  general  assignment  for  the  benefit  of creditors, within thirty days
    44  before the filing of either of such notices; and also over an attachment
    45  hereafter issued or a money judgment hereafter recovered upon  a  claim,
    46  which,  in  whole  or  in  part,  was not for materials furnished, labor
    47  performed or moneys advanced for the improvement of such real  property;
    48  and  over  any claim or lien acquired in any proceedings upon such judg-
    49  ment. Such liens shall also have priority  over  advances  made  upon  a
    50  contract  by an owner for an improvement of real property which contains
    51  an option to the contractor, his or her successor or assigns to purchase
    52  the property, if such advances were made after the time when  the  labor
    53  began  or  the  first  item  of material was furnished, as stated in the
    54  notice of lien. If several buildings are demolished, erected, altered or
    55  repaired, or several pieces or parcels of real  property  are  improved,
    56  under one contract, and there are conflicting liens thereon, each lienor

        A. 46                               7

     1  shall  have  priority  upon  the particular part of the real property or
     2  upon the particular building or premises  where  his  or  her  labor  is
     3  performed or his or her materials are used. Persons shall have no prior-
     4  ity  on account of the time of filing their respective notices of liens,
     5  but all liens shall be on a parity  except  as  hereinafter  in  section
     6  fifty-six  of this chapter provided; and except that in all cases labor-
     7  ers for daily or weekly wages with a mechanic's lien, and employees with
     8  an employee's lien, shall have preference over all other claimants under
     9  this article.
    10    § 11. Section 17 of the lien law, as amended by  chapter  324  of  the
    11  laws of 2000, is amended to read as follows:
    12    §  17.  Duration  of lien. 1. (a) No mechanic's lien specified in this
    13  article shall be a lien for a longer period  than  one  year  after  the
    14  notice  of  lien  has  been  filed, unless within that time an action is
    15  commenced to foreclose the lien, and a notice of the  pendency  of  such
    16  action,  whether  in  a  court of record or in a court not of record, is
    17  filed with the county clerk of the county in which the notice of lien is
    18  filed, containing the names of the parties to the action, the object  of
    19  the  action,  a brief description of the real property affected thereby,
    20  and the time of filing the notice of lien; or  unless  an  extension  to
    21  such lien, except for a lien on real property improved or to be improved
    22  with  a  single  family  dwelling, is filed with the county clerk of the
    23  county in which the notice of lien is filed within  one  year  from  the
    24  filing  of  the  original  notice of lien, continuing such lien and such
    25  lien shall be redocketed as of the date of filing such  extension.  Such
    26  extension  shall  contain  the  names of the lienor and the owner of the
    27  real property against whose interest therein such  lien  is  claimed,  a
    28  brief description of the real property affected by such lien, the amount
    29  of  such  lien, and the date of filing the notice of lien. No lien shall
    30  be continued by such extension for more than one year  from  the  filing
    31  thereof.  In  the event an action is not commenced to foreclose the lien
    32  within such extended period, such lien shall be extinguished  unless  an
    33  order  be  granted  by  a court of record or a judge or justice thereof,
    34  continuing such lien, and such lien shall be redocketed as of  the  date
    35  of  granting such order and a statement made that such lien is continued
    36  by virtue of such order. A lien on  real  property  improved  or  to  be
    37  improved  with a single family dwelling may only be extended by an order
    38  of a court of record, or a judge or justice thereof. No  lien  shall  be
    39  continued by court order for more than one year from the granting there-
    40  of,  but  a  new  order  and entry may be made in each of two successive
    41  years. If a lienor is made a party defendant in  an  action  to  enforce
    42  another  lien, and the plaintiff or such defendant has filed a notice of
    43  the pendency of the action within the time prescribed in  this  section,
    44  the  lien  of  such defendant is thereby continued. Such action shall be
    45  deemed an action to enforce the lien of such defendant lienor. The fail-
    46  ure to file a notice of pendency of action shall not abate the action as
    47  to any person liable for the payment of the debt specified in the notice
    48  of lien, and the action may  be  prosecuted  to  judgment  against  such
    49  person.  The  provisions  of  this section in regard to continuing liens
    50  shall apply to liens discharged by deposit or by order on the filing  of
    51  an  undertaking.  Where  a  lien is discharged by deposit or by order, a
    52  notice of pendency of action shall not be filed.
    53    (b) A lien, the duration of which has been extended by the filing of a
    54  notice of the pendency of an action as above provided,  shall  neverthe-
    55  less terminate as a lien after such notice has been canceled as provided
    56  in  section  sixty-five  hundred  fourteen of the civil practice law and

        A. 46                               8

     1  rules or has ceased to be effective as constructive notice  as  provided
     2  in  section  sixty-five  hundred  thirteen of the civil practice law and
     3  rules.
     4    2. (a) No employee's lien on real property shall be a lien for a long-
     5  er  period than one year after the notice of lien has been filed, unless
     6  an extension to such lien is filed with the county clerk of  the  county
     7  in  which the notice of lien is filed within one year from the filing of
     8  the original notice of lien, continuing such lien and such lien shall be
     9  redocketed as of the date of filing such extension. Such extension shall
    10  contain the names of the lienor and  the  owner  of  the  real  property
    11  against whose interest therein such lien is claimed, a brief description
    12  of  the property affected by such lien, the amount of such lien, and the
    13  date of filing the notice of lien.  No lien shall be continued  by  such
    14  extension  for  more than one year from the filing thereof. In the event
    15  an action is not commenced to obtain judgment on the wage  claim  or  to
    16  foreclose the lien within such extended period, such lien shall be auto-
    17  matically  extinguished  unless an order be granted by a court of record
    18  or a judge or justice thereof, continuing such lien, and such lien shall
    19  be redocketed as of the date of granting such order and a statement made
    20  that such lien is continued by virtue of such order.
    21    (b) No employee's lien on personal property shall  be  a  lien  for  a
    22  longer  period  than  one  year  after  the financing statement has been
    23  recorded, unless an extension to such lien, is  filed  with  the  filing
    24  office in which the financing statement is required to be filed pursuant
    25  to section 9-501 of the uniform commercial code within one year from the
    26  filing  of  the original financing statement, continuing such lien. Such
    27  extension shall contain the names of the lienor and  the  owner  of  the
    28  property  against  whose  interest therein such lien is claimed, a brief
    29  description of the prior financing statement to  be  extended,  and  the
    30  date  of filing the prior financing statement.  No lien shall be contin-
    31  ued by such extension for more than one year from the filing thereof. In
    32  the event an action is not commenced to  obtain  judgment  on  the  wage
    33  claim  or  to  foreclose the lien within such extended period, such lien
    34  shall be automatically extinguished unless an  order  be  granted  by  a
    35  court of record or a judge or justice thereof, continuing such lien, and
    36  such  lien  shall be refiled as of the date of granting such order and a
    37  statement made that such lien is continued by virtue of such order.
    38    (c) If a lienor is made a party defendant  in  an  action  to  enforce
    39  another  lien, and the plaintiff or such defendant has filed a notice of
    40  the pendency of the action within the time prescribed in  this  section,
    41  the  lien  of  such defendant is thereby continued. Such action shall be
    42  deemed an action to enforce the lien of such defendant lienor. The fail-
    43  ure to file a notice of pendency of action shall not abate the action as
    44  to any person liable for the payment of the debt specified in the notice
    45  of lien, and the action may  be  prosecuted  to  judgment  against  such
    46  person.    The  provisions of this section in regard to continuing liens
    47  shall apply to liens discharged by deposit or by order on the filing  of
    48  an  undertaking.  Where  a  lien is discharged by deposit or by order, a
    49  notice of pendency of action shall not be filed.
    50    (d) Notwithstanding the foregoing, if a lienor commences a foreclosure
    51  action or an action to obtain a judgment on the wage  claim  within  one
    52  year  from  the  filing  of  the  notice of lien on real property or the
    53  recording of the financing statement creating lien on personal property,
    54  the lien shall be extended during the pendency of the action and for one
    55  hundred twenty days following  the  entry  of  final  judgment  in  such
    56  action,  unless the action results in a final judgment or administrative

        A. 46                               9

     1  order in the lienor's favor on the wage claims and the lienor  commences
     2  a  foreclosure  action, in which instance the lien shall be valid during
     3  the pendency of the foreclosure action, provided, that the lien will  be
     4  automatically  extinguished  if, after a dismissal with prejudice of the
     5  wage claims on which it is based, the lienor fails to file a  notice  of
     6  appeal  within  the  prescribed period to file a notice of appeal.  If a
     7  lien is extended due to the pendency  of  a  foreclosure  action  or  an
     8  action  to  obtain a judgment on the wage claim, the lienor shall file a
     9  notice of such pendency and extension with the county clerk of the coun-
    10  ty in which the notice of lien is filed, containing  the  names  of  the
    11  parties  to the action, the object of the action, a brief description of
    12  the property affected thereby, and the time  of  filing  the  notice  of
    13  lien,  or  in  the  case  of a lien on personal property shall file such
    14  notice with the office authorized to accept financing statements  pursu-
    15  ant  to  section  9-501  of the uniform commercial code. For purposes of
    16  this section, an action to obtain judgment on a wage claim  includes  an
    17  action brought in any court of competent jurisdiction, the submission of
    18  a  complaint  to the department of labor or the submission of a claim to
    19  arbitration  pursuant  to  an  arbitration  agreement.  An  action  also
    20  includes an investigation of wage claims by the commissioner of labor or
    21  the  attorney  general  of  the state of New York, regardless of whether
    22  such investigation was initiated by a complaint.
    23    (e) A lien, the duration of which has been extended by the filing of a
    24  notice of the pendency of an action as above provided,  shall  neverthe-
    25  less terminate as a lien after such notice has been canceled as provided
    26  in  section  sixty-five  hundred  fourteen of the civil practice law and
    27  rules or has ceased to be effective as constructive notice  as  provided
    28  in  section  sixty-five  hundred  thirteen of the civil practice law and
    29  rules.
    30    § 12. Subdivisions 2 and 4 of section 19 of the lien law,  subdivision
    31  2  as amended by chapter 310 of the laws of 1962, subdivision 4 as added
    32  by chapter 582 of the laws of 2002 and paragraph a of subdivision  4  as
    33  further  amended  by  section 104 of part A of chapter 62 of the laws of
    34  2011, are amended to read as follows:
    35    (2) By failure to begin an action to foreclose such lien or to  secure
    36  an  order  continuing  it,  within  one year from the time of filing the
    37  notice of lien, unless (i) an action be begun within the same period  to
    38  foreclose  a  mortgage or another mechanic's lien upon the same property
    39  or any part thereof and a notice of pendency of  such  action  is  filed
    40  according to law, or (ii) an action is commenced to obtain a judgment on
    41  a  wage  claim  pursuant to subdivision two of section seventeen of this
    42  article, but a lien, the duration of which  has  been  extended  by  the
    43  filing  of a notice of the pendency of an action as [herein] provided in
    44  this section, shall nevertheless terminate as a lien after  such  notice
    45  has been cancelled or has ceased to be effective as constructive notice.
    46    (4) Either before or after the beginning of an action by the employer,
    47  owner  or  contractor executing a bond or undertaking in an amount equal
    48  to one hundred ten percent of such lien conditioned for the  payment  of
    49  any  judgment which may be rendered against the property or employer for
    50  the enforcement of the lien:
    51    a. The execution of any such bond or undertaking by  any  fidelity  or
    52  surety  company  authorized  by the laws of this state to transact busi-
    53  ness, shall be sufficient; and where a certificate of qualification  has
    54  been  issued  by  the  superintendent  of  financial  services under the
    55  provisions of section one thousand one hundred eleven of  the  insurance
    56  law,  and has not been revoked, no justification or notice thereof shall

        A. 46                              10

     1  be necessary. Any such company may execute any such bond or  undertaking
     2  as  surety  by  the  hand  of its officers, or attorney, duly authorized
     3  thereto by resolution of its board of directors,  a  certified  copy  of
     4  which  resolution,  under  the seal of said company, shall be filed with
     5  each bond or undertaking. Any such bond or undertaking  shall  be  filed
     6  with the clerk of the county in which the notice of lien is filed, and a
     7  copy  shall  be served upon the adverse party. The undertaking is effec-
     8  tive when so served and filed. If a certificate of qualification  issued
     9  pursuant  to  subsections  (b),  (c) and (d) of section one thousand one
    10  hundred eleven of the insurance law is not filed with the undertaking, a
    11  party may except, to the sufficiency of a surety and by a written notice
    12  of exception served  upon  the  adverse  party  within  ten  days  after
    13  receipt,  a  copy  of the undertaking. Exceptions deemed by the court to
    14  have been taken unnecessarily, or  for  vexation  or  delay,  may,  upon
    15  notice,  be  set  aside,  with  costs. Where no exception to sureties is
    16  taken within ten days or where  exceptions  taken  are  set  aside,  the
    17  undertaking shall be allowed.
    18    b. In the case of bonds or undertakings not executed pursuant to para-
    19  graph  a  of  this  subdivision, the employer, owner or contractor shall
    20  execute an undertaking with two or more sufficient sureties,  who  shall
    21  be free holders, to the clerk of the county where the premises are situ-
    22  ated.  The  sureties  must  together  justify in at least double the sum
    23  named in the undertaking. A copy of the undertaking,  with  notice  that
    24  the sureties will justify before the court, or a judge or justice there-
    25  of,  at  the  time  and place therein mentioned, must be served upon the
    26  lienor or his or her attorney, not less than five days before such time.
    27  Upon the approval of the undertaking by the court, judge or  justice  an
    28  order  shall  be  made  by such court, judge or justice discharging such
    29  lien.
    30    c. If the lienor cannot be found, or  does  not  appear  by  attorney,
    31  service  under  this  subsection  may  be made by leaving a copy of such
    32  undertaking and notice at the lienor's  place  of  residence,  or  if  a
    33  corporation at its principal place of business within the state as stat-
    34  ed  in  the notice of lien, with a person of suitable age and discretion
    35  therein, or if the house of his or her abode or its place of business is
    36  not stated in said notice of lien and is not known, then in such  manner
    37  as  the  court may direct. The premises, if any, described in the notice
    38  of lien as the lienor's residence or place of business shall  be  deemed
    39  to  be  his  or  her  said  residence  or  its place of business for the
    40  purposes of said service at the time thereof, unless it is shown  affir-
    41  matively  that  the person servicing the papers or directing the service
    42  had knowledge to the contrary. Notwithstanding the other  provisions  of
    43  this  subdivision  relating  to service of notice, in any case where the
    44  mailing address of the lienor is outside the state such service  may  be
    45  made  by registered or certified mail, return receipt requested, to such
    46  lienor at the mailing address contained in the notice of lien.
    47    d. Except as otherwise provided in this subdivision, the provisions of
    48  article twenty-five of the  civil  practice  law  and  rules  regulating
    49  undertakings  is  applicable  to  a  bond  or  undertaking given for the
    50  discharge of a lien on account of private improvements or of an  employ-
    51  ee's lien.
    52    §  13.  Section  24  of the lien law, as amended by chapter 515 of the
    53  laws of 1929, is amended to read as follows:
    54    § 24.  Enforcement  of  [mechanic's]  lien.  (1)  Real  property.  The
    55  [mechanics']  liens  on  real  property specified in this article may be
    56  enforced against the property specified in the notice of lien and  which

        A. 46                              11

     1  is subject thereto and against any person liable for the debt upon which
     2  the lien is founded, as prescribed in article three of this chapter.
     3    (2)  Personal property. An employee's lien on personal property speci-
     4  fied in this article may immediately be enforced  against  the  property
     5  through  a  foreclosure  as  prescribed  in  article nine of the uniform
     6  commercial code, or upon judgment obtained by the employee, commissioner
     7  of labor or attorney general of the state of New York, may  be  enforced
     8  in  any  manner  available  to the judgment creditor pursuant to article
     9  nine of the uniform commercial code or other applicable laws.
    10    § 14. Section 26 of the lien law, as amended by  chapter  373  of  the
    11  laws of 1977, is amended to read as follows:
    12    §  26.  Subordination  of liens after agreement with owner. In case an
    13  owner of real property shall execute to one or more persons, or a corpo-
    14  ration, as trustee or trustees, a bond and mortgage or a note and  mort-
    15  gage  affecting  such  property in whole or in part, or an assignment of
    16  the moneys due or to become due under a contract for a building loan  in
    17  relation  to  such property, and in case such mortgage, if any, shall be
    18  recorded in the office of the register of the  county  where  such  real
    19  property  is  situated,  or  if  such county has no register then in the
    20  office of the clerk of such county, and in case such assignment, if any,
    21  shall be filed in the office of the clerk of the county where such  real
    22  property  is  situated;  and  in  case lienors having [mechanics'] liens
    23  against said real property, notices of which have been filed up  to  and
    24  not  later than fifteen days after the recording of such mortgage or the
    25  filing of such assignment, and which liens have not been  discharged  as
    26  in  this  article  provided, shall, to the extent of at least fifty-five
    27  per centum of the aggregate amount for which such notices of liens  have
    28  been so filed, approve such bond and mortgage or such note and mortgage,
    29  if  any, and such assignment, if any, by an instrument or instruments in
    30  writing, duly acknowledged and filed in the office of such county clerk,
    31  then all mechanics' liens for  labor  performed  or  material  furnished
    32  prior  to  the  recording of such mortgage or filing of such assignment,
    33  whether notices thereof have been theretofore or  are  thereafter  filed
    34  and which have not been discharged as in this article provided, shall be
    35  subordinate  to  the  lien of such trust bond and mortgage or such trust
    36  note and mortgage to the extent of the aggregate amount of  all  certif-
    37  icates  of interest therein issued by such trustee or trustees, or their
    38  successors, for moneys loaned, materials furnished, labor performed  and
    39  any  other  indebtedness  incurred  after said trust mortgage shall have
    40  been recorded, and for expenses in connection with said trust  mortgage,
    41  and  shall  also  be subordinate to the lien of the bond and mortgage or
    42  note and mortgage, given to secure the  amount  agreed  to  be  advanced
    43  under  such  contract  for  a  building loan to the extent of the amount
    44  which shall be advanced by the holder of such bond and mortgage or  such
    45  note and mortgage to the trustee or trustees, or their successors, under
    46  such assignment. The provisions of this section shall apply to all bonds
    47  and mortgages and notes and mortgages and all assignments of moneys due,
    48  or  to  become due under building loan contracts executed by such owner,
    49  in like manner, and recorded or filed, from time to time as hereinbefore
    50  provided. In case of an assignment to trustees under the  provisions  of
    51  this  section,  the trustees and their successors shall be the agents of
    52  the assignor to receive and receipt for any and all sums advanced by the
    53  holder of the building loan bond and mortgage or the building loan  note
    54  and  mortgage  under  the building loan contract and such assignment. No
    55  lienor shall have any priority over the bond and mortgage  or  note  and
    56  mortgage  given to secure the money agreed to be advanced under a build-

        A. 46                              12

     1  ing loan contract or over the advances made thereunder, by reason of any
     2  act preceding the making and approval of such assignment.
     3    §  15.  Section  38  of the lien law, as amended by chapter 859 of the
     4  laws of 1930, is amended to read as follows:
     5    § 38. Itemized statement may be required of lienor. A lienor  who  has
     6  filed  a  notice of mechanic's lien shall, on demand in writing, deliver
     7  to the owner or contractor making such demand  a  statement  in  writing
     8  which  shall  set forth the items of labor and/or material and the value
     9  thereof which make up the amount for which he or she claims a lien,  and
    10  which  shall  also  set forth the terms of the contract under which such
    11  items were furnished.  The statement shall be verified by the lienor  or
    12  his or her agent in the form required for the verification of notices in
    13  section  nine  of  this  [chapter]  article. If the lienor shall fail to
    14  comply with such a demand within five days after  the  same  shall  have
    15  been  made  by  the  owner  or  contractor, or if the lienor delivers an
    16  insufficient statement, the person aggrieved may  petition  the  supreme
    17  court  of  this state or any justice thereof, or the county court of the
    18  county where the premises are situated, or  the  county  judge  of  such
    19  county  for an order directing the lienor within a time specified in the
    20  order to deliver to  the  petitioner  the  statement  required  by  this
    21  section. Two days' notice in writing of such application shall be served
    22  upon  the  lienor.  Such service shall be made in the manner provided by
    23  law for the personal service of a summons. The court  or  a  justice  or
    24  judge  thereof  shall hear the parties and upon being satisfied that the
    25  lienor has failed, neglected or refused to comply with the  requirements
    26  of  this  section shall have an appropriate order directing such compli-
    27  ance. In case the lienor fails to comply with the order so  made  within
    28  the time specified, then upon five days' notice to the lienor, served in
    29  the  manner  provided  by law for the personal service of a summons, the
    30  court or a justice or judge thereof may make  an  order  cancelling  the
    31  lien.
    32    §  16. Section 39 of the lien law, as added by chapter 859 of the laws
    33  of 1930, is amended to read as follows:
    34    § 39. Lien wilfully exaggerated is void. In any action  or  proceeding
    35  to  enforce a mechanic's lien upon a private or public improvement or an
    36  employee's lien, or in which the validity of the lien is  an  issue,  if
    37  the  court  shall find that a lienor has wilfully exaggerated the amount
    38  for which he or she claims a lien as stated in  his  or  her  notice  of
    39  lien, [his] such lien shall be declared to be void and no recovery shall
    40  be  had  thereon. No such lienor shall have a right to file any other or
    41  further lien for the same claim. A second or subsequent  lien  filed  in
    42  contravention  of  this  section  may be vacated upon application to the
    43  court on two days' notice.
    44    § 17. Section 39-a of the lien law, as added by  chapter  859  of  the
    45  laws of 1930, is amended to read as follows:
    46    §  39-a.  Liability  of  lienor  where  lien has been declared void on
    47  account of wilful exaggeration. Where in any  action  or  proceeding  to
    48  enforce  a  mechanic's  lien  upon a private or public improvement or an
    49  employee's lien the court shall have declared said lien to  be  void  on
    50  account  of  wilful  exaggeration  the person filing such notice of lien
    51  shall be liable in damages to the owner or contractor. The damages which
    52  said owner or contractor shall be entitled to recover, shall include the
    53  amount of any premium for a bond given to obtain the  discharge  of  the
    54  lien or the interest on any money deposited for the purpose of discharg-
    55  ing  the  lien,  reasonable attorney's fees for services in securing the
    56  discharge of the lien, and, in an action  or  proceeding  to  enforce  a

        A. 46                              13

     1  mechanic's  lien,  an amount equal to the difference by which the amount
     2  claimed to be due or to become due as  stated  in  the  notice  of  lien
     3  exceeded the amount actually due or to become due thereon.
     4    §  18.  Section  40  of the lien law, as amended by chapter 515 of the
     5  laws of 1929, is amended to read as follows:
     6    § 40. Construction of article. This article  is  to  be  construed  in
     7  connection  with  article  two of this chapter, and provides proceedings
     8  for the enforcement of employee's liens on real  property,  as  well  as
     9  liens  for labor performed and materials furnished in the improvement of
    10  real property, created by virtue of such article.
    11    § 19. Section 41 of the lien law, as amended by  chapter  807  of  the
    12  laws of 1952, is amended to read as follows:
    13    § 41. Enforcement of mechanic's or employee's lien on real property. A
    14  mechanic's  lien  or  employee's  lien  on real property may be enforced
    15  against such property, and against a person liable  for  the  debt  upon
    16  which  the  lien  is  founded,  by  an action, by the lienor, his or her
    17  assignee or legal representative, in the supreme court or  in  a  county
    18  court  otherwise  having  jurisdiction, regardless of the amount of such
    19  debt, or in a court which has jurisdiction in an  action  founded  on  a
    20  contract for a sum of money equivalent to the amount of such debt.
    21    §  20.  Section  43  of the lien law, as amended by chapter 310 of the
    22  laws of 1962, is amended to read as follows:
    23    § 43. Action in a court  of  record;  consolidation  of  actions.  The
    24  provisions  of the real property actions and proceedings law relating to
    25  actions for the foreclosure of a mortgage upon real  property,  and  the
    26  sale  and the distribution of the proceeds thereof apply to actions in a
    27  court of record, to enforce mechanics' liens  and  employees'  liens  on
    28  real  property, except as otherwise provided in this article. If actions
    29  are brought by different lienors in a court  of  record,  the  court  in
    30  which  the  first  action was brought, may, upon its own motion, or upon
    31  the application of any party in any of such actions, consolidate all  of
    32  such actions.
    33    §  21.  Section  46  of the lien law, as amended by chapter 515 of the
    34  laws of 1929, is amended to read as follows:
    35    § 46. Action in a court not of record.  If  an  action  to  enforce  a
    36  mechanic's lien or employee's lien against real property is brought in a
    37  court  not of record, it shall be commenced by the personal service upon
    38  the owner of a summons and complaint verified in the same  manner  as  a
    39  complaint  in  an  action  in  a court of record. The complaint must set
    40  forth substantially the facts contained in the notice of lien,  and  the
    41  substance  of  the  agreement under which the labor was performed or the
    42  materials were furnished, or if the lien is based upon a wage  claim  as
    43  defined  in  section two of this chapter, the basis for such wage claim.
    44  The form and contents of the summons shall be the same  as  provided  by
    45  law for the commencement of an action upon a contract in such court. The
    46  summons  must  be  returnable  not less than twelve nor more than twenty
    47  days after the date of the summons, or if service is  made  by  publica-
    48  tion,  after  the  day  of the last publication of the summons.  Service
    49  must be made at least eight days before the return day.
    50    § 22. Section 50 of the lien law, as amended by  chapter  515  of  the
    51  laws of 1929, is amended to read as follows:
    52    §  50.  Execution. Execution may be issued upon a judgment obtained in
    53  an action to enforce a mechanic's lien or  an  employee's  lien  against
    54  real  property  in a court not of record, which shall direct the officer
    55  to sell the title and interest of the owner in the premises, upon  which

        A. 46                              14

     1  the  lien  set  forth in the complaint existed at the time of filing the
     2  notice of lien.
     3    §  23.  Section  53  of the lien law, as amended by chapter 515 of the
     4  laws of 1929, is amended to read as follows:
     5    § 53. Costs and disbursements. If an action is brought  to  enforce  a
     6  mechanic's  lien  or an employee's lien against real property in a court
     7  of record, the costs and disbursements shall rest in the  discretion  of
     8  the  court,  and  may  be  awarded to the prevailing party. The judgment
     9  rendered in such an action shall include the amount of  such  costs  and
    10  specify  to whom and by whom the costs are to be paid. If such action is
    11  brought in a court not of record, they shall be the same as  allowed  in
    12  civil  actions  in  such  court.  The  expenses  incurred in serving the
    13  summons by publication may be added to the amount of costs  now  allowed
    14  in such court.
    15    §  24.  Section  59  of the lien law, as amended by chapter 515 of the
    16  laws of 1929, is amended to read as follows:
    17    § 59. Vacating of a [mechanic's] lien; cancellation of bond; return of
    18  deposit, by order of court. 1. A mechanic's lien  notice  of  which  has
    19  been filed on real property or a bond given to discharge the same may be
    20  vacated  and cancelled or a deposit made to discharge a lien pursuant to
    21  section twenty of this chapter may be returned, by an order of  a  court
    22  of  record. Before such order shall be granted, a notice shall be served
    23  upon the lienor, either personally or by leaving it as his or  her  last
    24  known place of residence, with a person of suitable age, with directions
    25  to  deliver  it  to  the lienor. Such notice shall require the lienor to
    26  commence an action to enforce the lien, within a time specified  in  the
    27  notice,  not  less  than  thirty  days from the time of service, or show
    28  cause at a special term of a court of record, or at a county court, in a
    29  county in which the property is situated, at a time and place  specified
    30  therein,  why  the  notice of lien filed or the bond given should not be
    31  vacated and cancelled, or the deposit returned,  as  the  case  may  be.
    32  Proof  of  such service and that the lienor has not commenced the action
    33  to foreclose such lien, as directed in the  notice,  shall  be  made  by
    34  affidavit, at the time of applying for such order.
    35    2.  An employee's lien notice of which has been filed on real property
    36  or a bond given to discharge the same may be vacated and cancelled or  a
    37  deposit  made  to  discharge  a  lien pursuant to section twenty of this
    38  chapter may be returned, by an order of a court of record.  Before  such
    39  order shall be granted, a notice shall be served upon the lienor, either
    40  personally  or by leaving it at his or her last known place of residence
    41  or attorney's place of business, with a person  of  suitable  age,  with
    42  directions  to  deliver  it to the lienor. Such notice shall require the
    43  lienor to commence an action to enforce the  lien,  or  to  commence  an
    44  action  to  obtain  judgment  on  the wage claim upon which the lien was
    45  established, within a time specified in the notice, not less than thirty
    46  days from the time of service, or show cause at  a  special  term  of  a
    47  court of record, or at a county court, in a county in which the property
    48  is  situated,  at  a time and place specified therein, why the notice of
    49  lien filed or the bond given should not be vacated and cancelled, or the
    50  deposit returned, as the case may be. Proof of such service and that the
    51  lienor has not commenced the action to foreclose such lien or an  action
    52  to  obtain  judgment  on  the  wage claim upon which the lien was estab-
    53  lished, as directed in the notice, shall be made by  affidavit,  at  the
    54  time of applying for such order.
    55    §  25.  Section  62  of the lien law, as amended by chapter 697 of the
    56  laws of 1934, is amended to read as follows:

        A. 46                              15

     1    § 62. Bringing in new parties. A lienor who has filed a notice of lien
     2  after the commencement of an action in a court of record to foreclose or
     3  enforce an employee's lien or a mechanic's lien against real property or
     4  a public improvement, may at any  time  up  to  and  including  the  day
     5  preceding  the  day on which the trial of such action is commenced, make
     6  application upon notice to the plaintiff or his or her attorney in  such
     7  action,  to  be  made  a party therein. Upon good cause shown, the court
     8  must order such lienor to be brought in by amendment. If the application
     9  is made by any other party in said action to make such lienor  or  other
    10  person  a  party,  the court may in its discretion direct such lienor or
    11  other person to be brought in by like amendment. The order to be entered
    12  on such application shall provide the time for and manner of serving the
    13  pleading of such additional lienor or other person and shall direct that
    14  the pleadings, papers and proceedings of the other  several  parties  in
    15  such action, shall be deemed amended, so as not to require the making or
    16  serving  of  papers  other than said order to effectuate such amendment,
    17  and shall further provide that the allegations in  the  answer  of  such
    18  additional lienor or other person shall, for the purposes of the action,
    19  be  deemed  denied  by the other parties therein. The action shall be so
    20  conducted by the court as not to cause substantially any  delay  in  the
    21  trial  thereof.    The  bringing  in  of such additional lienor or other
    22  person shall be without prejudice to the proceedings  had,  and  if  the
    23  action  be  on the calendar of the court, same shall retain its place on
    24  such calendar without the necessity of serving a new note of  issue  and
    25  new notices of trial.
    26    §  26.  Subdivision 3 of section 199-a of the labor law, as amended by
    27  chapter 564 of the laws of 2010, is amended to read as follows:
    28    3. Each employee and his or her  authorized  representative  shall  be
    29  notified  in  writing, of the termination of the commissioner's investi-
    30  gation of the employee's complaint and the result of such investigation,
    31  of any award and collection of back wages and civil  penalties,  and  of
    32  any intent to seek criminal penalties. In the event that criminal penal-
    33  ties  are  sought  the employee and his or her authorized representative
    34  shall be notified of the outcome of prosecution.
    35    § 27. Subdivision 2 of section 663 of the labor  law,  as  amended  by
    36  chapter 564 of the laws of 2010, is amended to read as follows:
    37    2.  By commissioner. On behalf of any employee paid less than the wage
    38  to which the employee is entitled under the provisions of this  article,
    39  the  commissioner may bring any legal action necessary, including admin-
    40  istrative action, to collect such  claim,  and  the  employer  shall  be
    41  required  to  pay  the  full amount of the underpayment, plus costs, and
    42  unless the employer proves a good faith basis to believe that its under-
    43  payment was in compliance with the law, an additional amount  as  liqui-
    44  dated damages. Liquidated damages shall be calculated by the commission-
    45  er  as  no  more  than  one  hundred  percent  of  the  total  amount of
    46  underpayments found to be due the employee. In any action brought by the
    47  commissioner in a court of competent  jurisdiction,  liquidated  damages
    48  shall  be calculated as an amount equal to one hundred percent of under-
    49  payments found to be due the employee.  Each  employee  or  his  or  her
    50  authorized representative shall be notified in writing of the outcome of
    51  any  legal  action  brought  on  the  employee's behalf pursuant to this
    52  section.
    53    § 28. Subdivision 5 of section 6201 of  the  civil  practice  law  and
    54  rules,  as  amended by chapter 860 of the laws of 1977 and as renumbered
    55  by chapter 618 of the laws of 1992, is amended and a new  subdivision  6
    56  is added to read as follows:

        A. 46                              16

     1    5.  the  cause  of action is based on a judgment, decree or order of a
     2  court of the United States or of any other court which  is  entitled  to
     3  full  faith  and  credit in this state, or on a judgment which qualifies
     4  for recognition under the provisions of article 53[.] of  this  chapter;
     5  or
     6    6.  the  cause  of action is based on wage claims. "Wage claims," when
     7  used in this chapter, shall include any claims of violations of articles
     8  five, six, and nineteen of the labor law, section two hundred fifteen of
     9  the labor law, and the related regulations or wage orders promulgated by
    10  the commissioner of labor, including but not limited to  any  claims  of
    11  unpaid,  minimum, overtime, and spread-of-hours pay, unlawfully retained
    12  gratuities, unlawful deductions from wages, unpaid  commissions,  unpaid
    13  benefits  and wage supplements, and retaliation, and any claims pursuant
    14  to 18 U.S.C. § 1595, 29 U.S.C. § 201 et seq., and/or employment contract
    15  as well as the concomitant liquidated damages and  penalties  authorized
    16  pursuant  to the labor law, the Fair Labor Standards Act, or any employ-
    17  ment contract.
    18    § 29. Section 6210 of the civil practice law and rules,  as  added  by
    19  chapter 860 of the laws of 1977, is amended to read as follows:
    20    §  6210.  Order  of attachment on notice; temporary restraining order;
    21  contents. Upon a motion on notice for an order of attachment, the  court
    22  may,  without  notice  to  the  defendant, grant a temporary restraining
    23  order prohibiting the transfer of assets by a garnishee as  provided  in
    24  subdivision  (b)  of section 6214. When attachment is sought pursuant to
    25  subdivision six of section  6201,  and  if  the  employer  contests  the
    26  motion,  the  court  shall  hold  a  hearing within ten days of when the
    27  employer's response to plaintiffs' motion for  attachment  is  due.  The
    28  contents  of  the  order  of attachment granted pursuant to this section
    29  shall be as provided in subdivision (a) of section 6211.
    30    § 30. Subdivision (b) of section 6211 of the civil  practice  law  and
    31  rules, as amended by chapter 566 of the laws of 1985, is amended to read
    32  as follows:
    33    (b)  Confirmation  of  order.  Except  where an order of attachment is
    34  granted on the ground specified in subdivision one  or  six  of  section
    35  6201,  an  order of attachment granted without notice shall provide that
    36  within a period not to exceed five days after levy, the plaintiff  shall
    37  move,  on  such  notice  as the court shall direct to the defendant, the
    38  garnishee, if any, and the sheriff, for an order confirming the order of
    39  attachment. Where an order of attachment without notice  is  granted  on
    40  the  ground  specified  in  subdivision  one or six of section 6201, the
    41  court shall direct that the statement required by section 6219 be served
    42  within five days, that a copy thereof be served upon the plaintiff,  and
    43  the  plaintiff  shall  move  within  ten  days  after  levy for an order
    44  confirming the order of attachment. If the plaintiff  upon  such  motion
    45  shall show that the statement has not been served and that the plaintiff
    46  will  be unable to satisfy the requirement of subdivision (b) of section
    47  6223 until the statement has been served, the court may grant one exten-
    48  sion of the time to move for confirmation for a period not to exceed ten
    49  days. If plaintiff fails to make such motion within the required period,
    50  the order of attachment and any levy thereunder shall  have  no  further
    51  effect and shall be vacated upon motion. Upon the motion to confirm, the
    52  provisions  of  subdivision (b) of section 6223 shall apply. An order of
    53  attachment granted without notice may provide that the  sheriff  refrain
    54  from  taking  any  property  levied upon into his or her actual custody,
    55  pending further order of the court.

        A. 46                              17

     1    § 31. Subdivisions (b) and (e) of rule 6212 of the civil practice  law
     2  and  rules, subdivision (b) as separately amended by chapters 15 and 860
     3  of the laws of 1977 and subdivision (e) as added by chapter 860  of  the
     4  laws of 1977, are amended to read as follows:
     5    (b) Undertaking. [On] 1. Except where an order of attachment is sought
     6  on  the ground specified in subdivision six of section 6201, on a motion
     7  for an order of attachment, the plaintiff shall give an undertaking,  in
     8  a  total  amount  fixed  by  the  court,  but not less than five hundred
     9  dollars, a specified part thereof conditioned that the  plaintiff  shall
    10  pay  to the defendant all costs and damages, including reasonable attor-
    11  ney's fees, which may be sustained by reason of the  attachment  if  the
    12  defendant  recovers judgment or if it is finally decided that the plain-
    13  tiff was not entitled to an attachment of the defendant's property,  and
    14  the  balance conditioned that the plaintiff shall pay to the sheriff all
    15  of his or her allowable fees.
    16    2. On a motion for  an  attachment  pursuant  to  subdivision  six  of
    17  section  6201, the court shall order that the plaintiff give an accessi-
    18  ble undertaking of no more than five hundred dollars, or in the alterna-
    19  tive, may waive the undertaking altogether. The attorney for the  plain-
    20  tiff shall not be liable to the sheriff for such fees. The surety on the
    21  undertaking shall not be discharged except upon notice to the sheriff.
    22    (e)  Damages.  [The]  Except where an order of attachment is sought on
    23  the ground specified in subdivision six of section 6201,  the  plaintiff
    24  shall  be  liable  to the defendant for all costs and damages, including
    25  reasonable attorney's fees, which may be  sustained  by  reason  of  the
    26  attachment  if  the  defendant  recovers  judgment,  or if it is finally
    27  decided that the plaintiff was not entitled  to  an  attachment  of  the
    28  defendant's  property. Plaintiff's liability shall not be limited by the
    29  amount of the undertaking.
    30    § 32. Paragraph (b) of section 624 of the business corporation law, as
    31  amended by chapter 449 of the laws  of  1997,  is  amended  to  read  as
    32  follows:
    33    (b) Any person who shall have been a shareholder of record of a corpo-
    34  ration,  or  who  is  or shall have been a laborer, servant or employee,
    35  upon at least five days' written demand shall have the right to  examine
    36  in  person  or  by  agent  or attorney, during usual business hours, its
    37  minutes of the proceedings of its shareholders and record of  sharehold-
    38  ers and to make extracts therefrom for any purpose reasonably related to
    39  such  person's  interest as a shareholder, laborer, servant or employee,
    40  provided the purpose reasonably related to  a  person's  interest  as  a
    41  laborer,  servant  or  employee shall be to obtain the names, addresses,
    42  and value of shareholders' interests  in  the  corporation.  Holders  of
    43  voting  trust  certificates representing shares of the corporation shall
    44  be regarded as shareholders for the purpose of this section.   Any  such
    45  agent  or  attorney  shall be authorized in a writing that satisfies the
    46  requirements of a writing under paragraph (b) of section 609  (Proxies).
    47  A  corporation  requested  to provide information pursuant to this para-
    48  graph shall make available such information in written form and  in  any
    49  other  format in which such information is maintained by the corporation
    50  and shall not be required to  provide  such  information  in  any  other
    51  format.  If a request made pursuant to this paragraph includes a request
    52  to furnish information  regarding  beneficial  owners,  the  corporation
    53  shall  make available such information in its possession regarding bene-
    54  ficial owners as is provided to the corporation by a  registered  broker
    55  or  dealer or a bank, association or other entity that exercises fiduci-
    56  ary powers in connection with the  forwarding  of  information  to  such

        A. 46                              18

     1  owners.  The  corporation  shall  not  be required to obtain information
     2  about beneficial owners not in its possession.
     3    §  33.  Section  630 of the business corporation law, paragraph (a) as
     4  amended by chapter 5 of the laws of 2016, paragraph (c)  as  amended  by
     5  chapter 746 of the laws of 1963, is amended to read as follows:
     6  § 630. Liability  of shareholders for wages due to laborers, servants or
     7           employees.
     8    (a) The ten largest shareholders, as determined by the fair  value  of
     9  their beneficial interest as of the beginning of the period during which
    10  the  unpaid services referred to in this section are performed, of every
    11  domestic corporation or of any  foreign  corporation,  when  the  unpaid
    12  services were performed in the state, no shares of which are listed on a
    13  national  securities exchange or regularly quoted in an over-the-counter
    14  market by one or more members of a national or an affiliated  securities
    15  association,  shall  jointly  and severally be personally liable for all
    16  debts, wages or salaries due and owing to any of its laborers,  servants
    17  or  employees other than contractors, for services performed by them for
    18  such corporation. [Before such laborer, servant or employee shall charge
    19  such shareholder for such services, he shall give notice in  writing  to
    20  such  shareholder that he intends to hold him liable under this section.
    21  Such notice shall be given within one  hundred  and  eighty  days  after
    22  termination  of  such  services, except that if, within such period, the
    23  laborer, servant or employee demands an examination  of  the  record  of
    24  shareholders  under  paragraph  (b)  of  section 624 (Books and records;
    25  right of inspection, prima facie evidence) of this article, such  notice
    26  may  be  given within sixty days after he has been given the opportunity
    27  to examine the record of shareholders. An action to enforce such liabil-
    28  ity shall be commenced  within  ninety  days  after  the  return  of  an
    29  execution  unsatisfied against the corporation upon a judgment recovered
    30  against it for such services.] The provisions of  this  paragraph  shall
    31  not  apply  to  an investment company registered as such under an act of
    32  congress entitled "Investment Company Act of 1940."
    33    (b) For the purposes of this section, wages or salaries shall mean all
    34  compensation and benefits payable by an employer to or for  the  account
    35  of  the employee for personal services rendered by such employee includ-
    36  ing any concomitant liquidated damages, penalties, interest,  attorney's
    37  fees  or costs.   These shall specifically include but not be limited to
    38  salaries,  overtime,  vacation,  holiday  and  severance  pay;  employer
    39  contributions  to or payments of insurance or welfare benefits; employer
    40  contributions to pension or annuity funds; and any other moneys properly
    41  due or payable for services rendered by such employee.
    42    (c) A shareholder who has paid more than his or  her  pro  rata  share
    43  under  this  section shall be entitled to contribution pro rata from the
    44  other shareholders liable under this section with respect to the  excess
    45  so  paid,  over  and  above  his or her pro rata share, and may sue them
    46  jointly or severally or any number of them to  recover  the  amount  due
    47  from  them.    Such recovery may be had in a separate action. As used in
    48  this paragraph, "pro rata"  means  in  proportion  to  beneficial  share
    49  interest.  Before a shareholder may claim contribution from other share-
    50  holders under this paragraph, he or she shall[, unless  they  have  been
    51  given  notice  by  a  laborer, servant or employee under paragraph (a),]
    52  give them notice in writing that he or  she  intends  to  hold  them  so
    53  liable  to  him  or her. Such notice shall be given by him or her within
    54  twenty days after the date that [notice was given to him by] he  or  she
    55  became aware that a laborer, servant or employee may seek to hold him or
    56  her liable under paragraph (a).

        A. 46                              19

     1    §  34. Subdivision (c) of section 609 of the limited liability company
     2  law, as amended by chapter 620 of the laws of 2019, is amended  to  read
     3  as follows:
     4    (c) Notwithstanding the provisions of subdivisions (a) and (b) of this
     5  section, the ten members with the largest percentage ownership interest,
     6  as  determined as of the beginning of the period during which the unpaid
     7  services referred to in this section are performed,  of  every  domestic
     8  limited  liability company, or of any foreign limited liability company,
     9  when the unpaid services were performed in the state, shall jointly  and
    10  severally  be personally liable for all debts, wages or salaries due and
    11  owing to any of  its  laborers,  servants  or  employees,  for  services
    12  performed  by  them  for  such  limited  liability company. [Before such
    13  laborer, servant or employee shall charge such member for such services,
    14  he or she shall give notice in writing to such member  that  he  or  she
    15  intends to hold such member liable under this section. Such notice shall
    16  be  given  within  one  hundred  eighty  days  after termination of such
    17  services. An action to enforce such liability shall be commenced  within
    18  ninety  days  after  the  return of an execution unsatisfied against the
    19  limited liability company upon a judgment recovered against it for  such
    20  services.]  A  member  who  has paid more than his or her pro rata share
    21  under this section shall be entitled to contribution pro rata  from  the
    22  other  members  liable  under this section with respect to the excess so
    23  paid, over and above his or her pro rata share, and may sue them jointly
    24  or severally or any number of them to recover the amount due from  them.
    25  Such  recovery may be had in a separate action. As used in this subdivi-
    26  sion, "pro rata" means in proportion to percentage  ownership  interest.
    27  Before  a  member  may  claim contribution from other members under this
    28  section, he or she shall give them notice in  writing  that  he  or  she
    29  intends to hold them so liable to him or her.
    30    §  35. Section 1102 of the limited liability company law is amended by
    31  adding a new subdivision (e) to read as follows:
    32    (e) Any person who is or shall have been a laborer, servant or employ-
    33  ee of a limited liability company, upon  at  least  five  days'  written
    34  demand  shall  have the right to examine in person or by agent or attor-
    35  ney, during usual business hours, records described in paragraph two  of
    36  subdivision  (a)  of  this  section throughout the period of time during
    37  which such laborer, servant or employee provided services to such compa-
    38  ny. A company requested to provide information pursuant to this subdivi-
    39  sion shall make available such records in written form and in any  other
    40  format  in which such information is maintained by the company and shall
    41  not be required to provide such information in any other format.    Upon
    42  refusal  by  the  company  or  by  an officer or agent of the company to
    43  permit an inspection of the records described in this  subdivision,  the
    44  person  making  the demand for inspection may apply to the supreme court
    45  in the judicial district where the office of  the  company  is  located,
    46  upon  such  notice  as  the court may direct, for an order directing the
    47  company, its members or managers to show cause why an order  should  not
    48  be granted permitting such inspection by the applicant.  Upon the return
    49  day of the order to show cause, the court shall hear the parties summar-
    50  ily,  by affidavit or otherwise, and if it appears that the applicant is
    51  qualified and entitled to such inspection,  the  court  shall  grant  an
    52  order  compelling such inspection and awarding such further relief as to
    53  the court may seem just and proper. If the  applicant  is  found  to  be
    54  qualified  and  entitled  to  such inspection, the company shall pay all
    55  reasonable attorney's fees and costs of said applicant  related  to  the
    56  demand for inspection of the records.

        A. 46                              20

     1    §  36.  This act shall take effect on the thirtieth day after it shall
     2  have become a law.  The procedures and rights created in this act may be
     3  used by employees, laborers or servants in connection  with  claims  for
     4  liabilities that arose prior to the effective date.
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