To: All Employers, Employees, Insurance Carriers Providing Benefits under the Workers' Compensation Law; Attorneys and Licensed Representatives Appearing Before the Board
Date: December 24, 2010
On August 27, 2010, Governor Paterson signed into law the New York State Construction Industry Fair Play Act (Chapter 418). This new law amends the Labor Law and the Workers' Compensation Law to establish a presumption of employment in the construction industry. The new statute took effect on October 26, 2010, and for workers' compensation purposes, applies to accidents which occur on or after that date.
The heart of the new law is Labor Law § 861-C which provides that any person performing services for a contractor is presumed to be an employee of that contractor. 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 who engages in construction work. Labor Law § 861-C is incorporated by specific reference into Workers' Compensation Law § 2(4). Therefore, any worker performing services for a contractor who is injured on or after October 26, 2010, will be presumed the employee of that contractor for workers' compensation purposes, subject to the independent contractor test contained in the statute.
Under the Fair Play Act, any person working in construction is presumed to be the employee of the person or business for whom he or she is working.
An employer that willfully violates the Fair Play Act by failing to properly classify its employees will be subject to civil penalties of up to a $2,500 fine per misclassified employee for a first violation and up to $5,000 per misclassified employee for a second violation within a five-year period.
Employers also may be subject to criminal prosecution (a misdemeanor) for violations of the act with a penalty of up to 30 days in jail, up to a $25,000 fine and debarment from bidding on or being awarded any Public Works contracts for up to one year for a first offense. Subsequent misdemeanor offenses would be punishable by up to 60 days in jail, up to a $50,000 fine and debarment from bidding on or being awarded any Public Works contracts for up to five years.
The term "willfully violates" means a contractor knew or should have known that his or her conduct violated the law. Workers' Compensation Law Judges will impose the civil penalties contained in the new law based on the evidence presented at the hearing.
Workers' Compensation Law Judges and the Bureau of Compliance may impose the penalties contained in the Fair Play Act. Penalties under the act are in addition to all existing civil and criminal penalties for misclassification, failure to provide required coverage or other violations of the Workers' Compensation Law, Labor Law or Tax & Finance Law.
Questions regarding this release may be addressed to the Bureau of Compliance, 20 Park Street, Room 202, Albany, New York 12207, [Effective June 29, 2012 all questions should be directed to Bureau of Compliance, 328 State Street, Schenectady NY 12305-2318] (866) 298-7830.
Robert E. Beloten