senate Bill S2556
(R, C, IP) 22nd Senate District
- In Committee
- On Floor Calendar
- Passed Senate
- Passed Assembly
- Delivered to Governor
- Signed/Vetoed by Governor
Relates to payment of independent contractors and authorizes the department of labor to investigate complaints, make claims for compensation, assess liquid damages, civil penalties and criminal penalties; authorizes the award of attorney fees and liquidated damages; excludes construction contractors.
TITLE OF BILL:
to amend the labor law, in relation to independent
To grant the Department of Labor greater oversight over employment
contracts involving independent contractors, to afford them the same
compensation guarantees as traditional employees.
SUMMARY OF PROVISIONS:
Section one amends the Labor Law by adding two new sections, 196-b and
New section 196-b adds definitions for the terms "compensation,"
"independent contractor," "client," "construction contractor," and
"construction project." These definitions apply to new section 196-b
and new section 196-c.
New section 196-c provides requirements for the payment of independent
contractors and remedies for independent contractors with payment
disputes. This new section's requirements and remedies include:
-Requiring that independent contractors to be paid in accordance with
the written agreement between the independent contractor and the
client. The agreement must include the work terms, as well as a
description of how compensation earned and payable is calculated.
Clients must retain copies of these written agreements for six years.
- Requiring that independent contractors be compensated for their work
within a reasonable amount of time, in accordance with a written
- Empowering the Commissioner of the Department of Labor to take action
to pursue violations of written agreements and recoup unpaid
compensation owed to independent contractors.
- Establishing the right of independent contractors to file complaints
with the Department of Labor concerning contract violations.
- Requiring the Department of Labor to investigate complaints filed by
independent contractors and to provide such independent contractors
with a written description of the complaint processing procedure,
investigation, case conference, potential civil and criminal
penalties, and collection procedures.
- Empowers the Commissioner of the Department of Labor to determine
whether a client has violated a written agreement regarding the
compensation. When the Department has determined that there has been a
violation, the Department may issue an order directing payment of the
compensation found to be due.
- Civil and criminal penalties for clients who fail to ray compensation
to independent contractors.
Section two provides that this act shall take effect immediately.
Currently, independent contractors currently do not receive the same
protections under the Labor Law with regard to earned remuneration as
Since the original enactment of the Labor Law, composition of the
workforce in New York State has changed significantly. The modern
economy has led to the rise of individual workers considered
"independent contractors" or "freelancers." An independent
contractor, as defined by this legislation, is a sole proprietor who
is not an employee and who is hired or retained by a client for an
amount equal to or greater than six hundred dollars, which is the
threshold for which a company or person must provide a federal
Internal Revenue Service form 1099-mist to the independent contractor.
Independent contractors often participate in work alongside
traditional employees, yet they are not afforded the same protections
under the law as their traditionally employed counterparts. They are
especially vulnerable because their compensation is not guaranteed
under the Labor Law, and their main forum for relief is Small Claims
Court. This bill seeks to correct the situation by amending the Labor
Law to extend compensation protection to this Population of workers.
A recent survey of 3,000 independent contractors revealed that they
spent 17,000 hours pursuing $3 million dollars in owed compensation.
This statistic not only indicates the disproportionate burden placed
on these individuals to collect payments that are rightfully theirs,
it also illustrates the significant loss productivity because
independent contractors are forced to spend time pursuing earned and
unpaid compensation when they could be performing valuable and
constructive work activity.
2011-2: S.4129 - Referred to Labor (Passed Assembly both years, A.6698)
To be determined.
This act shall take effect immediately.
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