N.Y. Business Corporation Law § 630: Liability of shareholders for wages due to laborers, servants or employees

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

employees.

(a) The ten largest shareholders, as determined by the fair value of

their beneficial interest as of the beginning of the period during which

the unpaid services referred to in this section are performed, of every

domestic corporation or of any foreign corporation, when the unpaid

services were performed in the state, no shares of which are listed on a

national securities exchange or regularly quoted in an over-the-counter

market by one or more members of a national or an affiliated securities

association, shall jointly and severally be personally liable for all

debts, wages or salaries due and owing to any of its laborers, servants

or employees other than contractors, for services performed by them for

such corporation. Before such laborer, servant or employee shall charge

such shareholder for such services, he shall give notice in writing to

such shareholder that he intends to hold him liable under this section.

Such notice shall be given within one hundred and eighty days after

termination of such services, except that if, within such period, the

laborer, servant or employee demands an examination of the record of

shareholders under paragraph (b) of section 624 (Books and records;

right of inspection, prima facie evidence) of this article, such notice

may be given within sixty days after he has been given the opportunity

to examine the record of shareholders. An action to enforce such

liability shall be commenced within ninety days after the return of an

execution unsatisfied against the corporation upon a judgment recovered

against it for such services. The provisions of this paragraph shall not

apply to an investment company registered as such under an act of

congress entitled "Investment Company Act of 1940."

(b) For the purposes of this section, wages or salaries shall mean all

compensation and benefits payable by an employer to or for the account

of the employee for personal services rendered by such employee. These

shall specifically include but not be limited to salaries, overtime,

vacation, holiday and severance pay; employer contributions to or

payments of insurance or welfare benefits; employer contributions to

pension or annuity funds; and any other moneys properly due or payable

for services rendered by such employee.

(c) A shareholder who has paid more than his pro rata share under this

section shall be entitled to contribution pro rata from the other

shareholders liable under this section with respect to the excess so

paid, over and above his pro rata share, and may sue them jointly or

severally or any number of them to recover the amount due from them.

Such recovery may be had in a separate action. As used in this

paragraph, "pro rata" means in proportion to beneficial share interest.

Before a shareholder may claim contribution from other shareholders

under this paragraph, he shall, unless they have been given notice by a

laborer, servant or employee under paragraph (a), give them notice in

writing that he intends to hold them so liable to him. Such notice shall

be given by him within twenty days after the date that notice was given

to him by a laborer, servant or employee under paragraph (a).