New York has amended its Limited Liability Company Law (“LLC Law”) to make the ten members with the largest ownership interest of any Limited Liability Company, foreign or domestic, responsible for unpaid wages to employees. The legislation was proposed by the Governor Andrew M. Cuomo as part of his 2017 State of the State address and will become effective February 10, 2020.

Specifically, the amendment expands New York LLC Law § 609(c) to expressly hold members of out-of-state LLCs personally liable for “all debts, wages or salaries due and owing” for services performed within the state. Prior to the recent amendment, the law did not provide that out-of-state LLC members could be liable for wages owed. In a recent press release, the Governor stated, “This measure closes a loophole that for too long allowed certain companies to hide behind their complicated corporate structure to avoid wage theft laws currently on the books.”

The new bill clarifies that members of both New York and foreign LLCs will be treated the same under the LLC Law.  It now mirrors the similar provision of the New York Business Corporation Law (§ 630) which already provides for shareholder liability for both foreign and domestic corporations for debts, wages, or salaries due for services performed within the state.

New York LLCs should be aware of the amendment and make changes, if necessary, by the effective date.