New York Law Blog

Some retired New York state educators were using a loophole in the law to collect a paycheck for returning to fill holes in the employment roster as well as receiving their pensions. The governor of the state has said no more and on Friday will be signing a bill that will close up the ability to partake in such a practice. Wanting those who have experience to fill the employment openings has lead to a gross overexpendature.

The new law requires school districts and public agencies to wait a year before hiring a retired worker into the same or similar position. Previously, there was no waiting period, although some New York City agencies like the Administration for Children’s Services had adopted a one-year waiting period on their own. In addition, school districts and agencies will now be required to show more extensive documentation that they tried to recruit nonretirees for the positions.

State Attorney General Andrew M. Cuomo, whose investigations into pension fraud in school districts led to the new law, said school superintendents and others had routinely abused the pension system this way. “This was a great game of taxpayer abuse for many years,” he said in a telephone interview on Tuesday, “and if you follow the money, you end up at the state pension fund.”

The new law has some educators concerned that they may have an even tougher time hiring competent talent to fill empty positions. Robert Lowry, the deputy director of the New York State Council of School Superintendents had these suggestions on how to make the law work best for everyone:

Mr. Lowry said school districts often have little choice but to hire retirees, and can even save money because they do not have to make pension contributions for retirees, and may not have to pay health benefits, either. He suggested a narrower approach, such as applying the one-year waiting period only to a retiree’s last district, limiting interim appointments to one year and requiring school districts to show that hiring a retiree saved money.

This week New York state governor David Patterson signed a slew of bills into law on a myriad of subjects spanning agriculture, business, consumer protection, criminal justice, education, energy and environment, healthy, housing and property, judiciary, labor, veterans, local bills, and retroactive property tax exemptions. Here are a few of the highlights from the lengthy list:

• S.8297-A Fuschillo / A.11316-A Pheffer, Children’s Product Safety and Recall Effectiveness Act of 2008
• S.8673 Fuschillo / A.2140-D Paulin, which authorizes pharmacists to administer immunizing agents to adults. (more on that here)
• A.3520 Nolan / S.5874-A Sabini - Authorizes the Commissioner of Agriculture and Markets to revoke the license of a slaughterhouse that fails three consecutive inspections
• S.7330 Fuschillo / A.11613 Rules Gottfried - Requires hotels that furnish drinking glasses, silverware or flatware in individual rooms to provide that such items are fully sanitized
• A.10622 Eddington / S.3680 Trunzo - Provides that the patients rights notification required to be given by hospitals include notice patient cannot be discriminated against because of age
• A.10741 Silver / S.8181 Padavan - Extends for an additional two years, the establishment of certain water charges for hospitals and charities in New York City

The entire list can be viewed on the state of New York website, linked above.

Despite the new law in effect that requires lenders to inform homeowners that their mortgage is about to be foreclosed on, some in the industry believe it still may not be enough to save those who are in trouble. Among the areas of New York City that are among the hardest hit, Staten Island residents are seeing foreclosure rates “354 percent higher than Brooklyn, and 533 percent higher than the Bronx.” Now homeowners who are on the verge of being foreclosed on by banks who offered bad subprime loans in the last few years are seeking legal counsel to ensure that the mortgage lending reform law is on their side.

It was enough to prompt him [attorney Michael Menicucci] to begin a letter-writing campaign to state legislators and the New York Banking Department, which earlier this month announced a new mortgage lending reform law. The law requires lenders and loan servicers to send a 90-day preforeclosure notice to troubled homeowners, giving them a chance to consult with a housing counselor and seek a loan settlement before foreclosure begins. It also calls for a mandatory settlement conference to take place within 60 days after a foreclosure starts.

But Menicucci said the law does not guarantee settlements or set specific time frames for negotiating loan modifications or short sales. The latter is when the bank agrees to take less than the mortgage owed in order to avoid foreclosure. In return, the homeowners avoid the black stain losing a house leaves on their credit.

However, what exactly does the law entail? A statement by the New York State Banking Department aims to break the law down:

A spokeswoman for the state Banking Department said the new state law encourages the lender to act in good faith and work with the homeowner. The law also establishes more consumer protections for subprime loans and minimum underwriting standards, and it classifies mortgage fraud as a crime.