Monday, October 28, 2013


This is an interesting question presented - when is a corporate officer/owner individually responsible for wages, payments of UI benefits, etc.

The DOL's opinion letter as to when an individual shall be deemed an employer is set forth at this link:

The most recent case I found on this issue is PICARD v. BIGSBEE ENTERPRISES, INC., 1984-13 (9-12-2013), 2013 NY SLIP Op 51495 (U) where the court noted:

"The second branch of defendants' motion seeks dismissal of the complaint
as against the two individual defendants, Joseph Mallozzi and John Mallozzi
(collectively "Individual Defendants"), on the ground that officers and
shareholders of a corporation are not subject to civil liability. In
opposition, plaintiff argues that corporate officers, agents and
shareholders may be held liable under article 6 of the Labor Law as
"employers" and that the complaint alleges sufficient facts for the
Individual Defendants to be deemed plaintiff's employer.

  Settled law holds that an individual does not bear civil liability for
unpaid wages under Labor Law article 6 ("Article 6") merely by serving as an
officer, shareholder or agent of a corporation (see Stoganovic v Dinolfo,
92 AD2d 729 [4th Dept 1983], aff'd 61 NY2d 812; Andux v Woodbury Auto Park,
Inc., 30 AD3d 362 [2d Dept 2006]). However, Article 6 does impose liability
upon "employers" (Labor Law § 190 [3]), and an officer, shareholder or agent
of a corporation who qualifies as an "employer" may be subject to a civil
suit on that basis (Bonito v Avalon Partners, Inc., 106 AD3d 625, 625-626
[1st Dept 2013] [officer]; Wing Wong v King Sun Yee, 262 AD2d 254, 255 [1st
Dept 1999] [shareholder]).

  The term "employer" is broadly defined in Article 6 to include "any
person, corporation, limited liability company, or association employing any
individual in any occupation, industry, trade, business or service." In
determining whether an individual may be subject to civil liability as an
"employer" under Article 6, courts consider factors such as whether the
individual exercises control of the day-to-day operations of the business,
including determination of the rate and method of payment of employees (see
Bonito, 106 AD3d at 625). Here, the complaint alleges that each of the
Individual Defendants "exercises sufficient control of each catering
location's day to day operations to be considered an employer of Plaintiff
and those similarly situated under New York Labor Law" (Complaint ¶¶ 30-31).
Accepting the truth of these allegations and according plaintiff the benefit
of all reasonable inferences, the Individual Defendants have failed to
demonstrate their entitlement to dismissal of the complaint at this early
stage of the litigation."


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