In January 2014, New York State Governor Andrew Cuomo signed the Commercial Goods Transportation Industry Fair Play Act. Under the new law, commercial delivery companies that currently classify their drivers as independent contractors must reclassify them as employees.
Governor Cuomo signed the Act in an effort to crack down on employers who deliberately misclassify their employees to avoid paying the appropriate wages and taxes. Between 2007 and 2010, the state of New York discovered 35,000 workers who were misclassified, resulting in $457 million in unreported wages.
Employers who fail to comply with the new law will pay a wide range of civil penalties. Criminal penalties may also be imposed.
The new law permits a company to claim a driver is an independent contractor and not an employee if the company can prove that the driver is free from the control and direction of the hiring company in performing the work; provides a service that is different from what is being provided by that company or is otherwise not part of the usual business of the company; and is customarily engaged in carrying out the same services as an independent established trade or profession, rather than simply working for the company.
The new law, which was to go into effect on March 11th, has been returned to the state legislature, which is considering delaying its implementation for an additional thirty days and limiting its applicability to drivers of commercial vehicles with a gross weight of more than 10,000 pounds.
Employers often misclassify employees in an attempt to avoid paying overtime wages or providing other benefits. If you think you have been misclassified by your employer, call Shulman Kessler LLP.