§ 630 — Liability of shareholders for wages due to laborers, servants or employees

New York § 630

• Jurisdiction: New York
• Law BSC: Business Corporation
• Art. 6: Shareholders

Text

§ 630. Liability of shareholders for wages due to laborers, servants or\n employees.\n (a) The ten largest shareholders, as determined by the fair value of\ntheir beneficial interest as of the beginning of the period during which\nthe unpaid services referred to in this section are performed, of every\ndomestic corporation or of any foreign corporation, when the unpaid\nservices were performed in the state, no shares of which are listed on a\nnational securities exchange or regularly quoted in an over-the-counter\nmarket by one or more members of a national or an affiliated securities\nassociation, shall jointly and severally be personally liable for all\ndebts, wages or salaries due and owing to any of its laborers, servants\nor employees other than contractors, for services performed by them for\nsuch corporation. Before such laborer, servant or employee shall charge\nsuch shareholder for such services, he shall give notice in writing to\nsuch shareholder that he intends to hold him liable under this section.\nSuch notice shall be given within one hundred and eighty days after\ntermination of such services, except that if, within such period, the\nlaborer, servant or employee demands an examination of the record of\nshareholders under paragraph (b) of section 624 (Books and records;\nright of inspection, prima facie evidence) of this article, such notice\nmay be given within sixty days after he has been given the opportunity\nto examine the record of shareholders. An action to enforce such\nliability shall be commenced within ninety days after the return of an\nexecution unsatisfied against the corporation upon a judgment recovered\nagainst it for such services. The provisions of this paragraph shall not\napply to an investment company registered as such under an act of\ncongress entitled "Investment Company Act of 1940."\n (b) For the purposes of this section, wages or salaries shall mean all\ncompensation and benefits payable by an employer to or for the account\nof the employee for personal services rendered by such employee. These\nshall specifically include but not be limited to salaries, overtime,\nvacation, holiday and severance pay; employer contributions to or\npayments of insurance or welfare benefits; employer contributions to\npension or annuity funds; and any other moneys properly due or payable\nfor services rendered by such employee.\n (c) A shareholder who has paid more than his pro rata share under this\nsection shall be entitled to contribution pro rata from the other\nshareholders liable under this section with respect to the excess so\npaid, over and above his pro rata share, and may sue them jointly or\nseverally or any number of them to recover the amount due from them.\nSuch recovery may be had in a separate action. As used in this\nparagraph, "pro rata" means in proportion to beneficial share interest.\nBefore a shareholder may claim contribution from other shareholders\nunder this paragraph, he shall, unless they have been given notice by a\nlaborer, servant or employee under paragraph (a), give them notice in\nwriting that he intends to hold them so liable to him. Such notice shall\nbe given by him within twenty days after the date that notice was given\nto him by a laborer, servant or employee under paragraph (a).\n