Includes bonus in the definition of wages for purposes of the labor law when the formula under which a bonus is determined is available to the employer or when the amount of a bonus has been declared; relates to the forfeit of wages.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4283
SPONSOR: Steck TITLE OF BILL:
An act to amend the labor law, in relation to including bonus compen-
sation in the definition of wages and forfeit of wages
PURPOSE OR GENERAL IDEA OF BILL:
Labor Law 190(1) does not define bonus compensation as wages even if
such bonus compensation is contractually due the employee and is fully
earned. The bill corrects this defect in the law.
SUMMARY OF PROVISIONS:
The bill provides that bonus compensation, if fully earned, will be
treated as any other form of wages.
JUSTIFICATION:
The Court of Appeals has held that bonus compensation is wages only if
it is akin to commissions. This is unrealistic for many employees and
contrary to the law in other States. Many employees who are not in sales
have their bonus determined according to a formula based on firm profit.
For example, there is no reason why stockbrokers' bonuses should receive
protection as wages but the same not be true for the bonuses of stock
analysts or any other employees who receive bonuses based on a favorable
evaluation of their performance rather than based on specific sales.
LEGISLATIVE HISTORY:
2014: A7619 referred to labor
2015/16: A768 referred to labor
2017/18: A2500 referred to labor
2019/20: A0391 referred to labor
2020/22: A262 referred to labor
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect immediately
STATE OF NEW YORK
________________________________________________________________________
4283
2023-2024 Regular Sessions
IN ASSEMBLY
February 14, 2023
___________
Introduced by M. of A. STECK, CRUZ, DeSTEFANO, EPSTEIN, REYES, SIMON --
read once and referred to the Committee on Labor
AN ACT to amend the labor law, in relation to including bonus compen-
sation in the definition of wages and forfeit of wages
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 1 of section 190 of the labor law, as amended
2 by chapter 328 of the laws of 1972, is amended and a new subdivision 10
3 is added to read as follows:
4 1. "Wages" means the earnings of an employee for labor or services
5 rendered, regardless of whether the amount of earnings is determined on
6 a time, piece, commission, bonus, or other basis. The term "wages" also
7 includes benefits or wage supplements as defined in section one hundred
8 ninety-eight-c of this article, except for the purposes of sections one
9 hundred ninety-one and one hundred ninety-two of this article.
10 10. "Bonus" constitutes wages as defined in subdivision one of this
11 section, regardless of the source of revenue, when (a) the formula under
12 which a bonus is determined is certain and all the data utilized in
13 calculating the amount of a bonus under the formula is available to the
14 employer or (b) when the amount of a bonus has been declared by the
15 employer.
16 § 2. The labor law is amended by adding a new section 193-a to read as
17 follows:
18 § 193-a. Wages non-forfeitable. All wages covered under this article
19 shall be non-forfeitable once the amount of the wage is known or can
20 with reasonable certainty be known.
21 § 3. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05472-01-3
