Date: April 4, 2014
On January 10, 2014, Governor Cuomo signed into law the New York State Commercial Goods Transportation Industry Fair Play Act (Act) (Chapter 558). This new law amends the Labor Law and the Workers' Compensation Law to establish a presumption of employment in the commercial goods transportation industry. 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 heart of the new law is Labor Law § 862-B which provides that 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. Labor Law § 862-B is incorporated by specific reference into Workers' Compensation Law § 2(4). Therefore, any worker performing services for a commercial goods transportation contractor who is injured on or after April 10, 2014, will be presumed the employee of that commercial goods transportation contractor for workers' compensation purposes, subject to the independent contractor test contained in the statute.
Under the Fair Play Act, a driver who possesses a state-issued driver’s license, and who transports goods in the state of New York while operating a commercial motor vehicle (as defined by law), is presumed to be the employee of a commercial goods transportation contractor (as defined by law) who compensates the driver.
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 commercial goods transportation contractor knew or should have known that his, her, or its 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, 328 State Street, Schenectady, NY 12305-2318; (866) 298-7830.
Robert E. Beloten