NY Passes Classification Law
New York has taken a strong stand on trucker misclassification by passing S5867. The bill, which takes effect April 10, creates new definitions for employee and independent contractor, with standards above and beyond the Internal Revenue Service definitions.
Under the law, employers will bear the burden of properly classifying their drivers. The law also includes a whistleblower provision for those who report misclassification.
Gov. Andrew Cuomo signed the bill into law Jan. 10, 2014, but an amendment was added this week. The amendment applies an 11-point business entity test to help determine which truckers fall into which category.
The law also outlines penalties for employers and contractors who violate the law. First-time offenders will pay a civil penalty of up to $2,500 per misclassified employee and either spend up to 30 days in prison or pay up to $25,000 in criminal fines. Subsequent offenses are penalized at $5,000 per affected employee and carry prison sentences up to 60 days and criminal fines up to $50,000.
“The major change is turning it into the company, the business, the employer to defend whether or not they have an employee or an independent contractor,” says Graig Zappia, an attorney with Tully Rinckey PLLC. “The presumption to get over the initial hurdle is now borne by the employer as opposed to in the past, where the employee had to prove they are not an independent contractor.”