New York Passes Law to Address Employee Misclassification
In an effort to combat employee misclassification in the construction industry — the practice of intentionally misclassifying workers as independent contractors — the New York Senate and Assembly recently passed the New York State Construction Industry Fair Play Act. The law seeks to provide approximately $92.3 million per year in savings from lost workers' compensation assessments and unemployment taxes.
State Senator George Onorato (D-Queens) states: "It is very clear that action must be taken to stop unscrupulous employers from misclassifying workers as independent contractors — a practice that costs the State at least $90 million a year, and that hurts both workers and honest employers."
Unless a worker falls under three-part criteria (in some jurisdictions referred to as the ABC Test), all construction industry workers are presumed to be employees. The three-part criteria are as follows:
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The individual is free from control and direction in performing the job.
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The service must be performed outside the contractor's usual course of business.
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The individual must be customarily engaged in an independently established trade, occupation, profession or business that is similar to the service to be performed.
The Fair Play Act also states that workers will be provided with notice of their work classification status, protection from retaliation for reporting violations, and penalties will be assessed to employers and corporate officers who knowingly allow violations to occur.
According to Senator Onorato: "Employers who knowingly misclassify workers deprive their employees of basic labor protections, including access to unemployment insurance and workers' compensation."
Senator Brian X. Foley (D-Blue Point) notes that: "[The Fair Play Act] will also provide access to proper benefits, such as unemployment insurance and workers' compensation, to hundreds of construction workers who presently cannot access those benefits due to being misclassified as independent contractors."
According to a 2009 report by the New York State Joint Enforcement Task Force on Employee Misclassification, there were 12,300 instances of employee misclassification, many of which were in the construction industry.
Thousands of reclassified employees will be eligible for workers' compensation. But how does workers' compensation affect other government benefits that may be received, including Social Security Disability?
A worker currently receiving Social Security Disability benefits can keep receiving those benefits even if he or she is injured on the job and starts to receive workers' compensation. However, the amount of Social Security Disability received may be reduced.
For questions about applying for Social Security disability or workers' compensation (or appealing denials of claims), speak with an attorney who maintains an active practice in the fields of injury and disability law.
If you'd like to learn more about this topic, or if you need assistance applying for Social Security Disability benefits or workers' compensation, contact Schwartzapfel Partners P.C. online or call our New York law firm at 888-801-1914 to schedule your free claim evaluation. Our lawyers are standing ready to assist you.
