Gov. Andrew Cuomo signed an act earlier this year that will have a significant impact on employers in the transportation industry by changing the tests used to determine whether a worker is an employee or an independent contractor. The act, titled the “New York State Commercial Goods Transportation Industry Fair Play Act,” takes effect on March 11 and amends the New York Labor Law.
The new act creates a presumption that any individual who performs commercial goods transportation services for a commercial goods transportation contractor shall be classified as an employee. This presumption applies unless the worker meets specific criteria to be considered an independent contractor or as a separate business entity. The act sets forth criteria to determine whether or not an individual falls under one of two exceptions: independent contractors or separate business entities.
In order to be classified as an independent contractor, the worker must meet all three of the following criteria: (1) the individual must be contractually and factually free from control and direction when performing the job, (2) the service must be performed outside the usual course of business for which the service is performed, and (3) the individual must be customarily engaged in an independently established trade, occupation, profession, or business that is similar to the service at issue.
In order to be considered a separate business entity under the act, an eleven-prong test must be met listing elements such as the possibility to make its services available to the general public or the business community on a continuing basis. The separate business entity test applies to “any sole proprietor, partnership, corporation or entity.”
The act aims to severely limit a commercial goods transportation contractor’s ability to classify its carriers as independent contractors, after New York State discovered 35,000 misclassified workers within its borders and $457 million in unreported wages between 2007 and 2010.
For most adults, your job is your livelihood, and that should never be in jeopardy. If you or a loved one has been faced with a challenge to your role as an independent contractor or if you would like to learn more about this act, contact an experienced employment lawyer today. A skilled attorney will afford you the representation you deserve and ensure your legal rights are protected.