Fair Play Act

Law to Prevent Misclassification of Drivers Takes Effect

New definition of "employee" in commercial goods transportation industry curbs misclassification.
By: | May 2, 2014 • 2 min read

Nearly 40,000 employers misclassified more than 700,000 workers in New York between 2002 and 2005. The findings by Cornell University’s School of Industrial and Labor Relations has led to the enactment of a law aimed at curbing the practice among commercial goods transportation services employees.

“This new law amends the Labor Law and the Workers’ Compensation Law to establish a presumption of employment in the commercial goods transportation industry,” according to a bulletin on the New York Workers’ Compensation Board’s website. “The technical amendments were signed by Governor Cuomo on March 17, 2014. The new statute will take effect on April 10, 2014, and for workers’ compensation purposes, applies to accidents which occur on or after that date.”

The new law redefines “employee” in the industry. It states “any person performing commercial goods transportation services for a commercial goods transportation contractor is presumed to be an employee of that commercial goods transportation contractor. Commercial goods transportation contractor is broadly defined to include any sole proprietor, partnership, firm, corporation, limited liability company, association, or other legal entity permitted to do business within the state that compensates commercial vehicle drivers who possess any state-issued commercial driver’s license to transport goods in the state of New York.”

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Because of the date of the legislation, any worker injured while performing services for a commercial goods transportation contractor on or after April 10 will be presumed to be the employee of the contractor for workers’ comp purposes. The commercial goods transportation contractor is responsible to compensate the driver for the injuries.

The Fair Play Act comes with some stiff penalties, including fines and jail time. Violators face civil penalties of up to $1,500 for a first violation and up to $5,000 for a subsequent violation within a five-year period. Those who willfully violate the law face civil penalties of up to $2,500 for the first violation per misclassified employee and up to $5,000 for each subsequent violation per misclassified employee within a five-year period.

In addition, employers who willfully violate the provisions of the law may be imprisoned for up to 30 days or fined up to $25,000. For a subsequent offense, the punishment increases to up to 60 days in jail and a fine of up to $50,000.

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]