Requires a payroll services business to compile and provide annual wage and tax statements and/or year-end forms to clients

2025 Regular Session

Payroll services must provide annual wage statements and year-end forms (like W-2s) to clients and employees at no extra cost or delay, or face penalties.

REPORTED REFERRED TO RULES

Summary of Bill A 11282 (2025-2026 Session, New York)

Purpose and intent

Establishes a new requirement for payroll services businesses to ensure clients and their employees receive annual wage and tax statements and year-end forms (such as W-2s) without additional cost or delay.

Aims to protect clients from delays or withholding of essential payroll documents in the course of providing payroll services.

Key provisions and changes

New section added: § 394-j of the General Business Law.

Mandatory obligation for payroll services businesses:

When entering into a payroll service contract or agreement, the payroll services business must compile and provide the client’s and the client’s employees’ annual wage and tax statements (including W-2s) and/or year-end forms.
This must be done at no additional cost or delay.
The business may not withhold, delay, or fail to deliver these statements due to any financial or other dispute with the client.

Penalties for non-compliance:

First violation: civil penalty not to exceed $1,000.
Each subsequent violation: civil penalty not to exceed $1,500.

Definitions and scope:

A payroll services business is defined as a business (excluding an office of a certified public accountant) that:
Collects payroll-related data (hours worked, pay rates, deductions, etc.) from clients, and
Uses that data to generate paychecks, payroll reports, and tax filings.
The section allows use of standard data processing and tabulating techniques as part of providing services.

Effective date:

The act takes effect on the 90th day after it becomes law.

Who is affected

Primary: Payroll services businesses that provide payroll processing and related services under contracts with clients.

Clients and their employees:

Benefit from guaranteed delivery of annual wage and tax statements (e.g., W-2 forms) and year-end forms.

Other entities (e.g., certified public accounting firms) are explicitly excluded from the definition of “payroll services business.”

Procedural and timeline aspects

Enactment process:

Introduced May 6, 2026; referred to Consumer Affairs and Protection, then Rules/ Codes as part of the legislative process.

Compliance timeline:

Once law takes effect (90 days after enactment), the new requirement applies to future payroll service contracts or agreements.

Enforcement:

Civil penalties apply for violations; the statute outlines escalating penalties for subsequent violations.

Practical implications and considerations

For payroll service providers:

Must implement processes to automatically generate and deliver annual wage statements and year-end forms at no extra cost or delay to clients.
Should review contract templates to ensure compliance on a prospective basis.

For employers/clients:

Reduced risk of late or withheld W-2s and year-end forms, which can affect tax filing and employee communications.

Administrative impact:

May require audits or documentation to demonstrate timely delivery in case of disputes.

This summary focuses on the substantive requirements, who is affected, and the key timelines and penalties, providing a clear view of what the bill would change if enacted.