- New York Passes Law Creating Presumption That All Workers On Construction Sites Are Employees
- September 16, 2010
- Law Firm: Blank Rome LLP - Philadelphia Office
In an effort to curb perceived widespread employee misclassification in the construction industry, Governor Patterson of New York signed the New York State Construction Industry Fair Play Act, which will make it much harder for contractors to classify their laborers as independent contractors rather than as employees. The Act goes into effect on October 30, 2010 and creates a presumption of employee status for all workers on construction projects unless the contractor can prove that the worker meets certain defined criteria of independent contractor status. The Act also requires contractors to post a notice to their workers advising them of their rights.
The penalties for willfully violating the Act can be significant. They include both criminal penalties and civil penalties of up to $2,500 for the first violation and $5,000 for each subsequent violation as well as the normal penalties imposed for failing to pay other statutory coverage, such as unemployment insurance, workers' compensation insurance, or corporate or personal income tax. Individual officers and shareholders may be personally liable for some of these penalties as well.
New York's passage of this law follows the trend started by the United States Department of Labor earlier this year, which announced plans to significantly enhance enforcement efforts and focus on misclassification of employees as independent contractors.