Employee Misclassification: Guilty Until Proven Innocent

Many people that once dreamed of being their own boss could now have a big problem on their hands. And many businesses that rely on those individuals to help carry out operations could be in the same boat. 

This week the US Department of Labor and NYS Attorney General Eric Schneiderman’s office signed a Memorandum of Understanding to ‘protect the rights of employees’ by preventing the misclassification of independent contractors. This means that businesses in New York can expect greater scrutiny, and some hefty fines are likely to come down.

Although there are some bad actors that purposely misclassify employees to avoid taxation and regulation, this aggressive campaign by the feds and the AG’s Office will cast a wide net and lump together those that made honest mistakes with the bad actors. Legitimate independent contractors— from truck drivers to personal trainers to hair stylists—have reason to be concerned because the employer-employee relationship can be unclear, and standards are “amorphous,” as a recent Forbes article noted.   

This isn’t the first time that the State has taken measures with respect to classification of employees. New York State enacted legislation in 2010 entitled the New York State Construction Industry Fair Play Act that presumes workers in the construction industry are employees unless the employer proves otherwise. In the 2013, the New York State Commercial Goods Transportation Industry Fair Play Act called for independent contractor tests that, when applied to the trucking industry, would effectively eliminate the owner-operator business model. 

The trucking bill stalled in the previous legislative session, which gives the State a chance to revisit the whole issue before continuing to adopt more piecemeal legislation to try to deal with the problem. In the meantime, the focused effort in coordination with the feds only adds to the State’s reputation for being over-regulated and having zealous enforcement.

About these ads

About Mike Durant

Mike Durant was named New York State Director of NFIB in May 2011. Prior to joining NFIB as the Assistant State Director in May 2010, Durant began his career in the New York Senate working in the Office of Member Services. From there, he served in a number of positions during former New York Governor George E. Pataki’s administration. As a Research Specialist in the New York State Office of Demographic Policy, Mike was responsible for drafting a redistricting proposal for Governor Pataki. In addition, Mike served as a Research Specialist for the Empire State Development Corporation, as well as the Associate Commissioner of Human Resource Management with the New York Department of Labor. Durant also spent four years working at the Questar III BOCES as a specialist focusing on the complex formulas that drive aid to school districts across the state while also taking a lead role in the state legislative/budget process as it related to education policy. These past positions have given Mike a deep understanding of the complex political economics of the State of New York. Active in the community, Durant has served on a number of boards in both the village of Ballston Spa and Town of Milton. Durant received his bachelor’s degree from Siena College in Loudonville, New York and resides in Ballston Spa with his wife and two children.
This entry was posted in New York, Regulations, Small Business and tagged , , . Bookmark the permalink.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s