New York limited liability company (“LLC”) members have long been on the hook for unpaid wages. Since 2014, the 10 largest members of a New York LLC could be held personally liable for unpaid wages to employees of the LLC.
Personal liability means an employee can file a lawsuit against an LLC owner (called a “member”) if the LLC doesn’t pay up.
Effective February 11, 2020, New York LLC Law § 609(c) will extend this same liability to members of out-of-state LLCs, provided the employee was working in New York State. Simply put, the new law allows an employee who works in New York to bring a claim for unpaid wages against the individual owners of certain out-of-state employers.
It shouldn’t come as a surprise that employers – even those in financial distress – must prioritize paying employee wages. And now individual members of LLCs organized outside of New York should be mindful of this new potential liability as well.
If you’re an employer with questions about your obligations under New York law, contact us. The attorneys at The Coppola Firm would be glad to assist you.