New York Construction Industry Misclassification Law Takes Effect - Provisions Include Required Posting
As previously discussed here, the New York legislature recently enacted the Construction Industry Fair Play Act. The law is effective tomorrow. In sum, the law provides that an individual providing services in the construction industry only qualifies as an “independent contractor” under the Act, if s/he meets the following test:
(1) [the worker] is free from control and direction in performing the job, both under his or her contract and in fact; (2) the service performed is outside the usual course of business; and (3) the worker is customarily engaged in an independently established trade, occupation, profession, or business that is similar to the service at issue
This is an example of what is commonly referred to as the “ABC” test for independent contractor status. It is utilized by various state agencies to define who is excluded from employee status for purposes of, for example, workers compensation or unemployment benefits. See generally 22 Berkeley J. Emp. & Lab. L. 295. The use of the phrase “and” requires that all three prongs of the test be met for contractor classification. The result is a very broad definition of “employee.”
The New York State Department of Labor has issued the mandatory posting required to be displayed by covered employers. The poster is available here.
New York construction industry employers must analyze whether they are covered by the Act (necessitating among other things immediate posting of this new NYSDOL poster), and how the Act’s narrow definition of “independent contractor” impacts their classification of workers. This legislation is similar to numerous pieces of legislation in other states. In certain instances, such legislation, and related state initiatives, is not limited to the construction industry.
