Bill Text: NY S01977 | 2023-2024 | General Assembly | Amended


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 24-0)

Status: (Introduced) 2024-01-03 - REFERRED TO JUDICIARY [S01977 Detail]

Download: New_York-2023-S01977-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         1977--A

                               2023-2024 Regular Sessions

                    IN SENATE

                                    January 17, 2023
                                       ___________

        Introduced  by Sens. RAMOS, BAILEY, BRISPORT, COMRIE, FERNANDEZ, GIANAR-
          IS, GONZALEZ, GOUNARDES, HARCKHAM,  HOYLMAN-SIGAL,  JACKSON,  KENNEDY,
          KRUEGER,  LIU,  MYRIE,  RIVERA,  SALAZAR, SANDERS, SEPULVEDA, SERRANO,
          STAVISKY -- read twice and ordered printed, and  when  printed  to  be
          committed  to the Committee on Judiciary -- committee discharged, bill
          amended, ordered reprinted as amended and recommitted to said  commit-
          tee

        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

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00720-02-3

        S. 1977--A                          2

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

        S. 1977--A                          3

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

        S. 1977--A                          4

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

        S. 1977--A                          5

     1  alphabetical order. The validity of the lien and the  right  to  file  a
     2  notice  thereof  shall  not be affected by the death of the owner before
     3  notice of the lien is filed.  A notice of employee's  lien  on  personal
     4  property  must  be  filed,  together  with a financing statement, in the
     5  filing office as set forth in section 9-501 of  the  uniform  commercial
     6  code.
     7    § 7. Section 11 of the lien law, as amended by chapter 147 of the laws
     8  of 1996, is amended to read as follows:
     9    §  11.  Service of copy of notice of lien.  1. Within five days before
    10  or thirty days after filing the notice of a mechanic's lien, the  lienor
    11  shall  serve  a copy of such notice upon the owner, if a natural person,
    12  (a) by delivering the same to him or her personally,  or  if  the  owner
    13  cannot  be  found, to his or her agent or attorney, or (b) by leaving it
    14  at his or her last known place of residence in the city or town in which
    15  the real property or some part thereof is situated,  with  a  person  of
    16  suitable  age  and  discretion,  or  (c) by registered or certified mail
    17  addressed to his or her last known place of residence, or  (d)  if  such
    18  owner  has  no  such residence in such city or town, or cannot be found,
    19  and he or she has no agent or  attorney,  by  affixing  a  copy  thereof
    20  conspicuously on such property, between the hours of nine o'clock in the
    21  forenoon  and  four  o'clock  in the afternoon; if the owner be a corpo-
    22  ration, said service shall be made (i) by delivering such  copy  to  and
    23  leaving  the same with the president, vice-president, secretary or clerk
    24  to the corporation, the cashier, treasurer or  a  director  or  managing
    25  agent  thereof,  personally,  within  the state, or (ii) if such officer
    26  cannot be found within the state by affixing a copy thereof conspicuous-
    27  ly on such property between the hours of nine o'clock  in  the  forenoon
    28  and  four  o'clock in the afternoon, or (iii) by registered or certified
    29  mail addressed to its last known place  of  business.  Failure  to  file
    30  proof  of  such  a service with the county clerk within thirty-five days
    31  after the notice of lien is filed shall terminate the notice as a  lien.
    32  Until  service of the notice has been made, as above provided, an owner,
    33  without knowledge of the lien, shall be protected in any payment made in
    34  good faith to any contractor or other person claiming a lien.
    35    2. Within five days before or thirty days after filing the  notice  of
    36  an  employee's  lien,  the lienor shall serve a copy of such notice upon
    37  the employer, if a natural person, (a) by delivering the same to him  or
    38  her  personally, or if the employer cannot be found, to his or her agent
    39  or attorney, or (b) by leaving it as his or  her  last  known  place  of
    40  residence  or business, with a person of suitable age and discretion, or
    41  (c) by registered or certified mail addressed to his or her  last  known
    42  place  of residence or business, or (d) if such employer owns real prop-
    43  erty, by affixing a copy thereof conspicuously on such property, between
    44  the hours of nine o'clock in the forenoon and four o'clock in the after-
    45  noon. The lienor also shall, within thirty days after filing the  notice
    46  of employee's lien, affix a copy thereof conspicuously on the real prop-
    47  erty  identified  in the notice of employee's lien, between the hours of
    48  nine o'clock in the forenoon and four o'clock in the afternoon.  If  the
    49  employer  be a corporation, said service shall be made (i) by delivering
    50  such copy to and leaving the same with  the  president,  vice-president,
    51  secretary  or  clerk  to  the  corporation,  the cashier, treasurer or a
    52  director or managing agent thereof, personally,  within  the  state,  or
    53  (ii) if such officer cannot be found within the state by affixing a copy
    54  thereof conspicuously on such property between the hours of nine o'clock
    55  in  the  forenoon  and four o'clock in the afternoon, or (iii) by regis-
    56  tered or certified mail addressed to its last known place  of  business,

        S. 1977--A                          6

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

        S. 1977--A                          7

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

        S. 1977--A                          8

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

        S. 1977--A                          9

     1    (d) Notwithstanding the foregoing, if a lienor commences a foreclosure
     2  action or an action to obtain a judgment on the wage  claim  within  one
     3  year  from  the  filing  of  the  notice of lien on real property or the
     4  recording of the financing statement creating lien on personal property,
     5  the lien shall be extended during the pendency of the action and for one
     6  hundred  twenty  days  following  the  entry  of  final judgment in such
     7  action, unless the action results in a final judgment or  administrative
     8  order  in the lienor's favor on the wage claims and the lienor commences
     9  a foreclosure action, in which instance the lien shall be  valid  during
    10  the  pendency of the foreclosure action, provided, that the lien will be
    11  automatically extinguished if, after a dismissal with prejudice  of  the
    12  wage  claims  on which it is based, the lienor fails to file a notice of
    13  appeal within the prescribed period to file a notice of appeal.    If  a
    14  lien  is  extended  due  to  the  pendency of a foreclosure action or an
    15  action to obtain a judgment on the wage claim, the lienor shall  file  a
    16  notice of such pendency and extension with the county clerk of the coun-
    17  ty  in  which  the  notice of lien is filed, containing the names of the
    18  parties to the action, the object of the action, a brief description  of
    19  the  property  affected  thereby,  and  the time of filing the notice of
    20  lien, or in the case of a lien on  personal  property  shall  file  such
    21  notice  with the office authorized to accept financing statements pursu-
    22  ant to section 9-501 of the uniform commercial  code.  For  purposes  of
    23  this  section,  an action to obtain judgment on a wage claim includes an
    24  action brought in any court of competent jurisdiction, the submission of
    25  a complaint to the department of labor or the submission of a  claim  to
    26  arbitration  pursuant  to  an  arbitration  agreement.  An  action  also
    27  includes an investigation of wage claims by the commissioner of labor or
    28  the attorney general of the state of New  York,  regardless  of  whether
    29  such investigation was initiated by a complaint.
    30    (e) A lien, the duration of which has been extended by the filing of a
    31  notice  of  the pendency of an action as above provided, shall neverthe-
    32  less terminate as a lien after such notice has been canceled as provided
    33  in section sixty-five hundred fourteen of the  civil  practice  law  and
    34  rules  or  has ceased to be effective as constructive notice as provided
    35  in section sixty-five hundred thirteen of the  civil  practice  law  and
    36  rules.
    37    §  12. Subdivisions 2 and 4 of section 19 of the lien law, subdivision
    38  2 as amended by chapter 310 of the laws of 1962, subdivision 4 as  added
    39  by  chapter  582 of the laws of 2002 and paragraph a of subdivision 4 as
    40  further amended by section 104 of part A of chapter 62 of  the  laws  of
    41  2011, are amended to read as follows:
    42    (2)  By failure to begin an action to foreclose such lien or to secure
    43  an order continuing it, within one year from  the  time  of  filing  the
    44  notice  of lien, unless (i) an action be begun within the same period to
    45  foreclose a mortgage or another mechanic's lien upon the  same  property
    46  or  any  part  thereof  and a notice of pendency of such action is filed
    47  according to law, or (ii) an action is commenced to obtain a judgment on
    48  a wage claim pursuant to subdivision two of section  seventeen  of  this
    49  article,  but  a  lien,  the  duration of which has been extended by the
    50  filing of a notice of the pendency of an action as [herein] provided  in
    51  this  section,  shall nevertheless terminate as a lien after such notice
    52  has been cancelled or has ceased to be effective as constructive notice.
    53    (4) Either before or after the beginning of an action by the employer,
    54  owner or contractor executing a bond or undertaking in an  amount  equal
    55  to  one  hundred ten percent of such lien conditioned for the payment of

        S. 1977--A                         10

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

        S. 1977--A                         11

     1  undertakings is applicable to  a  bond  or  undertaking  given  for  the
     2  discharge  of a lien on account of private improvements or of an employ-
     3  ee's lien.
     4    §  13.  Section  24  of the lien law, as amended by chapter 515 of the
     5  laws of 1929, is amended to read as follows:
     6    § 24.  Enforcement  of  [mechanic's]  lien.  (1)  Real  property.  The
     7  [mechanics']  liens  on  real  property specified in this article may be
     8  enforced against the property specified in the notice of lien and  which
     9  is subject thereto and against any person liable for the debt upon which
    10  the lien is founded, as prescribed in article three of this chapter.
    11    (2)  Personal property. An employee's lien on personal property speci-
    12  fied in this article may immediately be enforced  against  the  property
    13  through  a  foreclosure  as  prescribed  in  article nine of the uniform
    14  commercial code, or upon judgment obtained by the employee, commissioner
    15  of labor or attorney general of the state of New York, may  be  enforced
    16  in  any  manner  available  to the judgment creditor pursuant to article
    17  nine of the uniform commercial code or other applicable laws.
    18    § 14. Section 26 of the lien law, as amended by  chapter  373  of  the
    19  laws of 1977, is amended to read as follows:
    20    §  26.  Subordination  of liens after agreement with owner. In case an
    21  owner of real property shall execute to one or more persons, or a corpo-
    22  ration, as trustee or trustees, a bond and mortgage or a note and  mort-
    23  gage  affecting  such  property in whole or in part, or an assignment of
    24  the moneys due or to become due under a contract for a building loan  in
    25  relation  to  such property, and in case such mortgage, if any, shall be
    26  recorded in the office of the register of the  county  where  such  real
    27  property  is  situated,  or  if  such county has no register then in the
    28  office of the clerk of such county, and in case such assignment, if any,
    29  shall be filed in the office of the clerk of the county where such  real
    30  property  is  situated;  and  in  case lienors having [mechanics'] liens
    31  against said real property, notices of which have been filed up  to  and
    32  not  later than fifteen days after the recording of such mortgage or the
    33  filing of such assignment, and which liens have not been  discharged  as
    34  in  this  article  provided, shall, to the extent of at least fifty-five
    35  per centum of the aggregate amount for which such notices of liens  have
    36  been so filed, approve such bond and mortgage or such note and mortgage,
    37  if  any, and such assignment, if any, by an instrument or instruments in
    38  writing, duly acknowledged and filed in the office of such county clerk,
    39  then all mechanics' liens for  labor  performed  or  material  furnished
    40  prior  to  the  recording of such mortgage or filing of such assignment,
    41  whether notices thereof have been theretofore or  are  thereafter  filed
    42  and which have not been discharged as in this article provided, shall be
    43  subordinate  to  the  lien of such trust bond and mortgage or such trust
    44  note and mortgage to the extent of the aggregate amount of  all  certif-
    45  icates  of interest therein issued by such trustee or trustees, or their
    46  successors, for moneys loaned, materials furnished, labor performed  and
    47  any  other  indebtedness  incurred  after said trust mortgage shall have
    48  been recorded, and for expenses in connection with said trust  mortgage,
    49  and  shall  also  be subordinate to the lien of the bond and mortgage or
    50  note and mortgage, given to secure the  amount  agreed  to  be  advanced
    51  under  such  contract  for  a  building loan to the extent of the amount
    52  which shall be advanced by the holder of such bond and mortgage or  such
    53  note and mortgage to the trustee or trustees, or their successors, under
    54  such assignment. The provisions of this section shall apply to all bonds
    55  and mortgages and notes and mortgages and all assignments of moneys due,
    56  or  to  become due under building loan contracts executed by such owner,

        S. 1977--A                         12

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

        S. 1977--A                         13

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

        S. 1977--A                         14

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

        S. 1977--A                         15

     1  lien filed or the bond given should not be vacated and cancelled, or the
     2  deposit returned, as the case may be. Proof of such service and that the
     3  lienor has not commenced the action to foreclose such lien or an  action
     4  to  obtain  judgment  on  the  wage claim upon which the lien was estab-
     5  lished, as directed in the notice, shall be made by  affidavit,  at  the
     6  time of applying for such order.
     7    §  25.  Section  62  of the lien law, as amended by chapter 697 of the
     8  laws of 1934, is amended to read as follows:
     9    § 62. Bringing in new parties. A lienor who has filed a notice of lien
    10  after the commencement of an action in a court of record to foreclose or
    11  enforce an employee's lien or a mechanic's lien against real property or
    12  a public improvement, may at any  time  up  to  and  including  the  day
    13  preceding  the  day on which the trial of such action is commenced, make
    14  application upon notice to the plaintiff or his or her attorney in  such
    15  action,  to  be  made  a party therein. Upon good cause shown, the court
    16  must order such lienor to be brought in by amendment. If the application
    17  is made by any other party in said action to make such lienor  or  other
    18  person  a  party,  the court may in its discretion direct such lienor or
    19  other person to be brought in by like amendment. The order to be entered
    20  on such application shall provide the time for and manner of serving the
    21  pleading of such additional lienor or other person and shall direct that
    22  the pleadings, papers and proceedings of the other  several  parties  in
    23  such action, shall be deemed amended, so as not to require the making or
    24  serving  of  papers  other than said order to effectuate such amendment,
    25  and shall further provide that the allegations in  the  answer  of  such
    26  additional lienor or other person shall, for the purposes of the action,
    27  be  deemed  denied  by the other parties therein. The action shall be so
    28  conducted by the court as not to cause substantially any  delay  in  the
    29  trial  thereof.    The  bringing  in  of such additional lienor or other
    30  person shall be without prejudice to the proceedings  had,  and  if  the
    31  action  be  on the calendar of the court, same shall retain its place on
    32  such calendar without the necessity of serving a new note of  issue  and
    33  new notices of trial.
    34    §  26.  Subdivision 3 of section 199-a of the labor law, as amended by
    35  chapter 564 of the laws of 2010, is amended to read as follows:
    36    3. Each employee and his or her  authorized  representative  shall  be
    37  notified  in  writing, of the termination of the commissioner's investi-
    38  gation of the employee's complaint and the result of such investigation,
    39  of any award and collection of back wages and civil  penalties,  and  of
    40  any intent to seek criminal penalties. In the event that criminal penal-
    41  ties  are  sought  the employee and his or her authorized representative
    42  shall be notified of the outcome of prosecution.
    43    § 27. Subdivision 2 of section 663 of the labor  law,  as  amended  by
    44  chapter 564 of the laws of 2010, is amended to read as follows:
    45    2.  By commissioner. On behalf of any employee paid less than the wage
    46  to which the employee is entitled under the provisions of this  article,
    47  the  commissioner may bring any legal action necessary, including admin-
    48  istrative action, to collect such  claim,  and  the  employer  shall  be
    49  required  to  pay  the  full amount of the underpayment, plus costs, and
    50  unless the employer proves a good faith basis to believe that its under-
    51  payment was in compliance with the law, an additional amount  as  liqui-
    52  dated damages. Liquidated damages shall be calculated by the commission-
    53  er  as  no  more  than  one  hundred  percent  of  the  total  amount of
    54  underpayments found to be due the employee. In any action brought by the
    55  commissioner in a court of competent  jurisdiction,  liquidated  damages
    56  shall  be calculated as an amount equal to one hundred percent of under-

        S. 1977--A                         16

     1  payments found to be due the employee.  Each  employee  or  his  or  her
     2  authorized representative shall be notified in writing of the outcome of
     3  any  legal  action  brought  on  the  employee's behalf pursuant to this
     4  section.
     5    §  28.  Subdivision  5  of  section 6201 of the civil practice law and
     6  rules, as amended by chapter 860 of the laws of 1977 and  as  renumbered
     7  by  chapter  618 of the laws of 1992, is amended and a new subdivision 6
     8  is added to read as follows:
     9    5. the cause of action is based on a judgment, decree or  order  of  a
    10  court  of  the  United States or of any other court which is entitled to
    11  full faith and credit in this state, or on a  judgment  which  qualifies
    12  for  recognition  under the provisions of article 53[.] of this chapter;
    13  or
    14    6. the cause of action is based on wage claims.  "Wage  claims,"  when
    15  used in this chapter, shall include any claims of violations of articles
    16  five, six, and nineteen of the labor law, section two hundred fifteen of
    17  the labor law, and the related regulations or wage orders promulgated by
    18  the  commissioner  of  labor, including but not limited to any claims of
    19  unpaid, minimum, overtime, and spread-of-hours pay, unlawfully  retained
    20  gratuities,  unlawful  deductions from wages, unpaid commissions, unpaid
    21  benefits and wage supplements, and retaliation, and any claims  pursuant
    22  to 18 U.S.C. § 1595, 29 U.S.C. § 201 et seq., and/or employment contract
    23  as  well  as the concomitant liquidated damages and penalties authorized
    24  pursuant to the labor law, the Fair Labor Standards Act, or any  employ-
    25  ment contract.
    26    §  29.  Section  6210 of the civil practice law and rules, as added by
    27  chapter 860 of the laws of 1977, is amended to read as follows:
    28    § 6210. Order of attachment on notice;  temporary  restraining  order;
    29  contents.  Upon a motion on notice for an order of attachment, the court
    30  may, without notice to the  defendant,  grant  a  temporary  restraining
    31  order  prohibiting  the transfer of assets by a garnishee as provided in
    32  subdivision (b) of section 6214. When attachment is sought  pursuant  to
    33  subdivision  six  of  section  6201,  and  if  the employer contests the
    34  motion, the court shall hold a hearing  within  ten  days  of  when  the
    35  employer's  response  to  plaintiffs'  motion for attachment is due. The
    36  contents of the order of attachment granted  pursuant  to  this  section
    37  shall be as provided in subdivision (a) of section 6211.
    38    §  30.  Subdivision  (b) of section 6211 of the civil practice law and
    39  rules, as amended by chapter 566 of the laws of 1985, is amended to read
    40  as follows:
    41    (b) Confirmation of order. Except where  an  order  of  attachment  is
    42  granted  on  the  ground  specified in subdivision one or six of section
    43  6201, an order of attachment granted without notice shall  provide  that
    44  within  a period not to exceed five days after levy, the plaintiff shall
    45  move, on such notice as the court shall direct  to  the  defendant,  the
    46  garnishee, if any, and the sheriff, for an order confirming the order of
    47  attachment.  Where  an  order of attachment without notice is granted on
    48  the ground specified in subdivision one or  six  of  section  6201,  the
    49  court shall direct that the statement required by section 6219 be served
    50  within  five days, that a copy thereof be served upon the plaintiff, and
    51  the plaintiff shall move  within  ten  days  after  levy  for  an  order
    52  confirming  the  order  of attachment. If the plaintiff upon such motion
    53  shall show that the statement has not been served and that the plaintiff
    54  will be unable to satisfy the requirement of subdivision (b) of  section
    55  6223 until the statement has been served, the court may grant one exten-
    56  sion of the time to move for confirmation for a period not to exceed ten

        S. 1977--A                         17

     1  days. If plaintiff fails to make such motion within the required period,
     2  the  order  of  attachment and any levy thereunder shall have no further
     3  effect and shall be vacated upon motion. Upon the motion to confirm, the
     4  provisions  of  subdivision (b) of section 6223 shall apply. An order of
     5  attachment granted without notice may provide that the  sheriff  refrain
     6  from  taking  any  property  levied upon into his or her actual custody,
     7  pending further order of the court.
     8    § 31. Subdivisions (b) and (e) of rule 6212 of the civil practice  law
     9  and  rules, subdivision (b) as separately amended by chapters 15 and 860
    10  of the laws of 1977 and subdivision (e) as added by chapter 860  of  the
    11  laws of 1977, are amended to read as follows:
    12    (b) Undertaking. [On] 1. Except where an order of attachment is sought
    13  on  the ground specified in subdivision six of section 6201, on a motion
    14  for an order of attachment, the plaintiff shall give an undertaking,  in
    15  a  total  amount  fixed  by  the  court,  but not less than five hundred
    16  dollars, a specified part thereof conditioned that the  plaintiff  shall
    17  pay  to the defendant all costs and damages, including reasonable attor-
    18  ney's fees, which may be sustained by reason of the  attachment  if  the
    19  defendant  recovers judgment or if it is finally decided that the plain-
    20  tiff was not entitled to an attachment of the defendant's property,  and
    21  the  balance conditioned that the plaintiff shall pay to the sheriff all
    22  of his or her allowable fees.
    23    2. On a motion for  an  attachment  pursuant  to  subdivision  six  of
    24  section  6201, the court shall order that the plaintiff give an accessi-
    25  ble undertaking of no more than five hundred dollars, or in the alterna-
    26  tive, may waive the undertaking altogether. The attorney for the  plain-
    27  tiff shall not be liable to the sheriff for such fees. The surety on the
    28  undertaking shall not be discharged except upon notice to the sheriff.
    29    (e)  Damages.  [The]  Except where an order of attachment is sought on
    30  the ground specified in subdivision six of section 6201,  the  plaintiff
    31  shall  be  liable  to the defendant for all costs and damages, including
    32  reasonable attorney's fees, which may be  sustained  by  reason  of  the
    33  attachment  if  the  defendant  recovers  judgment,  or if it is finally
    34  decided that the plaintiff was not entitled  to  an  attachment  of  the
    35  defendant's  property. Plaintiff's liability shall not be limited by the
    36  amount of the undertaking.
    37    § 32. Paragraph (b) of section 624 of the business corporation law, as
    38  amended by chapter 449 of the laws  of  1997,  is  amended  to  read  as
    39  follows:
    40    (b) Any person who shall have been a shareholder of record of a corpo-
    41  ration,  or  who  is  or shall have been a laborer, servant or employee,
    42  upon at least five days' written demand shall have the right to  examine
    43  in  person  or  by  agent  or attorney, during usual business hours, its
    44  minutes of the proceedings of its shareholders and record of  sharehold-
    45  ers and to make extracts therefrom for any purpose reasonably related to
    46  such  person's  interest as a shareholder, laborer, servant or employee,
    47  provided the purpose reasonably related to  a  person's  interest  as  a
    48  laborer,  servant  or  employee shall be to obtain the names, addresses,
    49  and value of shareholders' interests  in  the  corporation.  Holders  of
    50  voting  trust  certificates representing shares of the corporation shall
    51  be regarded as shareholders for the purpose of this section.   Any  such
    52  agent  or  attorney  shall be authorized in a writing that satisfies the
    53  requirements of a writing under paragraph (b) of section 609  (Proxies).
    54  A  corporation  requested  to provide information pursuant to this para-
    55  graph shall make available such information in written form and  in  any
    56  other  format in which such information is maintained by the corporation

        S. 1977--A                         18

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

        S. 1977--A                         19

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

        S. 1977--A                         20

     1  ily,  by affidavit or otherwise, and if it appears that the applicant is
     2  qualified and entitled to such inspection,  the  court  shall  grant  an
     3  order  compelling such inspection and awarding such further relief as to
     4  the  court  may  seem  just  and proper. If the applicant is found to be
     5  qualified and entitled to such inspection, the  company  shall  pay  all
     6  reasonable  attorney's  fees  and costs of said applicant related to the
     7  demand for inspection of the records.
     8    § 36. This act shall take effect on the thirtieth day after  it  shall
     9  have become a law.  The procedures and rights created in this act may be
    10  used  by  employees,  laborers or servants in connection with claims for
    11  liabilities that arose prior to the effective date of this act.
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