S T A T E O F N E W Y O R K
________________________________________________________________________
6793
2009-2010 Regular Sessions
I N A S S E M B L Y
March 12, 2009
___________
Introduced by M. of A. BALL, TOWNSEND, ERRIGO, MILLER, CALHOUN, McDO-
NOUGH, GIGLIO -- Multi-Sponsored by -- M. of A. CROUCH, QUINN -- read
once and referred to the Committee on Labor
AN ACT to amend the tax law, the workers' compensation law and the labor
law, in relation to classifications of employees; and to repeal
certain provisions of the workers' compensation law and the labor law
relating thereto
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 170 of the tax law is amended by adding a new
subdivision 9 to read as follows:
9. THE DEPARTMENT SHALL PROMULGATE AND REGULARLY UPDATE RULES AND
REGULATIONS DEFINING AND ESTABLISHING A PROCEDURE FOR DETERMINING WHETH-
ER A PERSON IS AN EMPLOYEE.
(A) EMPLOYEE SHALL NOT INCLUDE ANY PERSON PERFORMING A SERVICE IF:
(I) THE PERSON IS FREE FROM CONTROL AND DIRECTION IN CONNECTION WITH
THE PERFORMANCE OF THE SERVICE, BOTH UNDER HIS OR HER CONTRACT FOR THE
PERFORMANCE OF SERVICE AND IN FACT;
(II) THE SERVICE IS PERFORMED OUTSIDE THE USUAL COURSE OF THE BUSINESS
OF AN EMPLOYER; AND
(III) THE PERSON IS CUSTOMARILY ENGAGED IN AN INDEPENDENTLY ESTAB-
LISHED TRADE, OCCUPATION, PROFESSION OR BUSINESS OF THE SAME NATURE AS
THAT INVOLVED IN THE SERVICE PERFORMED.
(B) THE FAILURE TO WITHHOLD FEDERAL OR STATE INCOME TAXES, OR TO PAY
UNEMPLOYMENT COMPENSATION CONTRIBUTIONS OR WORKERS' COMPENSATION PREMI-
UMS WITH RESPECT TO A PERSON'S WAGES SHALL BE CONSIDERED IN MAKING A
DETERMINATION PURSUANT TO THIS SUBDIVISION.
(C) A PERSON'S EXERCISE OF THE OPTION TO SECURE WORKERS' COMPENSATION
INSURANCE WITH A CARRIER AS A SOLE PROPRIETOR OR PARTNERSHIP SHALL NOT
BE CONSIDERED IN MAKING A DETERMINATION PURSUANT TO THIS SUBDIVISION.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10108-02-9
A. 6793 2
S 2. Paragraphs (a) and (b) of subdivision 2 of section 171-h of the
tax law, as amended by chapter 398 of the laws of 1997, are amended to
read as follows:
(a) (I) "employee" means an individual who is an employee [within the
meaning of chapter twenty-four of the internal revenue code of 1986] AS
DETERMINED BY THE DEPARTMENT, and does not include:
(A) an employee of a federal or state agency performing intelligence
or counterintelligence functions if the head of such agency has deter-
mined that a report made pursuant to this section with respect to the
individual could endanger the safety of the employee or compromise an
ongoing investigation or intelligence mission; OR
(B)(I) ANY INDIVIDUAL WHO IS FREE FROM CONTROL AND DIRECTION IN
CONNECTION WITH THE PERFORMANCE OF A SERVICE, BOTH UNDER HIS OR HER
CONTRACT FOR THE PERFORMANCE OF SERVICE OR IN FACT;
(II) THE SERVICE IS PERFORMED OUTSIDE OF THE USUAL COURSE OF BUSINESS
OF THE EMPLOYER; AND
(III) THE INDIVIDUAL IS CUSTOMARILY ENGAGED IN AN INDEPENDENTLY ESTAB-
LISHED TRADE, OCCUPATION, PROFESSION OR BUSINESS OF THE SAME NATURE AS
THAT INVOLVED IN THE SERVICE PERFORMED;
(II) THE FAILURE TO WITHHOLD FEDERAL OR STATE INCOME TAXES, OR TO PAY
UNEMPLOYMENT COMPENSATION CONTRIBUTIONS OR WORKERS' COMPENSATION PREMI-
UMS WITH RESPECT TO AN INDIVIDUAL'S WAGES SHALL NOT BE CONSIDERED IN
MAKING A DETERMINATION PURSUANT TO THIS PARAGRAPH.
(III) AN INDIVIDUAL'S EXERCISE OF THE OPTION TO SECURE WORKERS'
COMPENSATION INSURANCE WITH A CARRIER AS A SOLE PROPRIETOR OR PARTNER-
SHIP SHALL NOT BE CONSIDERED IN MAKING A DETERMINATION PURSUANT TO THIS
PARAGRAPH.
(b) "employer" means an individual or entity [within the meaning given
the term employer in section three thousand four hundred one (d) of the
internal revenue code of 1986] ENGAGED IN THE EMPLOYMENT OF ANY EMPLOYEE
OR EMPLOYEES and includes:
(i) any governmental entity, and
(ii) any labor organization as defined in section two (5) of the
national labor relations act, including any entity (also known as a
"hiring hall") which is used by such labor organization and an employer
to carry out the requirements described in section eight (f)(3) of the
national labor relations act with respect to any agreement that may
exist between the labor organization and the employer.
S 3. Section 611 of the tax law is amended by adding a new subsection
(c) to read as follows:
(C) UNDOCUMENTED WORKER. A PERSON NOR A RESIDENT OF THIS STATE NOR A
NONRESIDENT, AND CONSIDERED AN UNDOCUMENTED WORKER AS DETERMINED BY THE
DEPARTMENT, EARNING INCOME IN THIS STATE, SHALL BE TAXED AS A RESIDENT
PURSUANT TO THE PROVISIONS OF THIS ARTICLE. SHOULD SUCH PERSON FAIL TO
COMPLY WITH THE PROVISIONS OF THIS ARTICLE, EACH EMPLOYER WHO PAID
INCOME TO SUCH UNDOCUMENTED WORKER SHALL BE RESPONSIBLE FOR COMPLYING
WITH THE PROVISIONS OF THIS ARTICLE IN THE PLACE AND STEAD OF THE UNDOC-
UMENTED WORKER.
S 4. Subsection (e) of section 697 of the tax law is amended by adding
a new paragraph 3-b to read as follows:
(3-B) NOTHING IN THIS SUBSECTION SHALL BE CONSTRUED TO PROHIBIT THE
DEPARTMENT, ITS EMPLOYEES OR OFFICERS FROM REVIEWING THE WAGE PAYMENT
RECORDS AND CONTRACTS OF ANY PERSON OR ENTITY FOR THE PURPOSE OF DETER-
MINING THE CLASSIFICATION OF ANY INDIVIDUAL AS AN EMPLOYEE OF SUCH
PERSON OR EMPLOYER. ALL INFORMATION DERIVED FROM ANY SUCH REVIEW MAY BE
DISCLOSED TO THE DEPARTMENT OF LABOR AND THE WORKERS' COMPENSATION
A. 6793 3
BOARD, AND THEIR OFFICERS AND EMPLOYEES IN CONNECTION WITH THEIR LAWFUL
DUTIES.
S 5. Subdivision 4 of section 2 of the workers' compensation law is
REPEALED and a new subdivision 4 is added to read as follows:
4. "EMPLOYEE" MEANS A PERSON ENGAGED IN EMPLOYMENT IN ONE OF THE OCCU-
PATIONS ENUMERATED IN SECTION THREE OF THIS ARTICLE OR ANY OTHER EMPLOY-
MENT AS DETERMINED BY THE DEPARTMENT OF TAXATION AND FINANCE.
(A) SUCH TERM SHALL NOT INCLUDE ANY PERSON PERFORMING A SERVICE IF:
(I) THE PERSON IS FREE FROM CONTROL AND DIRECTION IN CONNECTION WITH
THE PERFORMANCE OF THE SERVICE, BOTH UNDER HIS OR HER CONTRACT FOR THE
PERFORMANCE OF SERVICE AND IN FACT;
(II) THE SERVICE IS PERFORMED OUTSIDE THE USUAL COURSE OF THE BUSINESS
OF AN EMPLOYER; AND
(III) THE PERSON IS CUSTOMARILY ENGAGED IN AN INDEPENDENTLY ESTAB-
LISHED TRADE, OCCUPATION, PROFESSION OR BUSINESS OF THE SAME NATURE AS
THAT INVOLVED IN THE SERVICE PERFORMED.
(B) THE FAILURE TO WITHHOLD FEDERAL OR STATE INCOME TAXES, OR TO PAY
UNEMPLOYMENT COMPENSATION CONTRIBUTIONS OR WORKERS' COMPENSATION PREMI-
UMS WITH RESPECT TO A PERSON'S WAGES SHALL NOT BE CONSIDERED IN MAKING A
DETERMINATION PURSUANT TO THIS SUBDIVISION.
(C) A PERSON'S EXERCISE OF THE OPTION TO SECURE WORKERS' COMPENSATION
INSURANCE WITH A CARRIER AS A SOLE PROPRIETOR OR PARTNERSHIP SHALL NOT
BE CONSIDERED IN MAKING A DETERMINATION PURSUANT TO THIS SUBDIVISION.
S 6. Subdivision 5 of section 201 of the workers' compensation law is
REPEALED and a new subdivision 5 is added to read as follows:
5. "EMPLOYEE" MEANS A PERSON ENGAGED IN ANY EMPLOYMENT AS DETERMINED
BY THE DEPARTMENT OF TAXATION AND FINANCE.
(A) SUCH TERM SHALL NOT INCLUDE ANY PERSON PERFORMING A SERVICE IF:
(I) THE PERSON IS FREE FROM CONTROL AND DIRECTION IN CONNECTION WITH
THE PERFORMANCE OF THE SERVICE, BOTH UNDER HIS OR HER CONTRACT FOR THE
PERFORMANCE OF SERVICE AND IN FACT;
(II) THE SERVICE IS PERFORMED OUTSIDE THE USUAL COURSE OF THE BUSINESS
OF AN EMPLOYER; AND
(III) THE PERSON IS CUSTOMARILY ENGAGED IN AN INDEPENDENTLY ESTAB-
LISHED TRADE, OCCUPATION, PROFESSION OR BUSINESS OF THE SAME NATURE AS
THAT INVOLVED IN THE SERVICE PERFORMED.
(B) THE FAILURE TO WITHHOLD FEDERAL OR STATE INCOME TAXES, OR TO PAY
UNEMPLOYMENT COMPENSATION CONTRIBUTIONS OR WORKERS' COMPENSATION PREMI-
UMS WITH RESPECT TO A PERSON'S WAGES SHALL NOT BE CONSIDERED IN MAKING A
DETERMINATION PURSUANT TO THIS SUBDIVISION.
(C) A PERSON'S EXERCISE OF THE OPTION TO SECURE WORKERS' COMPENSATION
INSURANCE WITH A CARRIER AS A SOLE PROPRIETOR OR PARTNERSHIP SHALL NOT
BE CONSIDERED IN MAKING A DETERMINATION PURSUANT TO THIS SUBDIVISION.
S 7. Subdivision 5 of section 2 of the labor law is amended to read as
follows:
5. "Employee" means a mechanic, workingman or laborer working for
another for hire AS DETERMINED BY THE DEPARTMENT OF TAXATION AND
FINANCE.
(A) SUCH TERM SHALL NOT INCLUDE ANY PERSON PERFORMING A SERVICE IF:
(I) THE PERSON IS FREE FROM CONTROL AND DIRECTION IN CONNECTION WITH
THE PERFORMANCE OF THE SERVICE, BOTH UNDER HIS OR HER CONTRACT FOR THE
PERFORMANCE OF SERVICE AND IN FACT;
(II) THE SERVICE IS PERFORMED OUTSIDE THE USUAL COURSE OF THE BUSINESS
OF AN EMPLOYER; AND
A. 6793 4
(III) THE PERSON IS CUSTOMARILY ENGAGED IN AN INDEPENDENTLY ESTAB-
LISHED TRADE, OCCUPATION, PROFESSION OR BUSINESS OF THE SAME NATURE AS
THAT INVOLVED IN THE SERVICE PERFORMED.
(B) THE FAILURE TO WITHHOLD FEDERAL OR STATE INCOME TAXES, OR TO PAY
UNEMPLOYMENT COMPENSATION CONTRIBUTIONS OR WORKERS' COMPENSATION PREMI-
UMS WITH RESPECT TO A PERSON'S WAGES SHALL NOT BE CONSIDERED IN MAKING A
DETERMINATION PURSUANT TO THIS SUBDIVISION.
(C) A PERSON'S EXERCISE OF THE OPTION TO SECURE WORKERS' COMPENSATION
INSURANCE WITH A CARRIER AS A SOLE PROPRIETOR OR PARTNERSHIP SHALL NOT
BE CONSIDERED IN MAKING A DETERMINATION PURSUANT TO THIS SUBDIVISION.
S 8. Subdivision 2 of section 190 of the labor law, as added by chap-
ter 548 of the laws of 1966, is amended to read as follows:
2. "Employee" means any person employed for hire by an employer in any
employment AS DETERMINED BY THE DEPARTMENT OF TAXATION AND FINANCE.
(A) SUCH TERM SHALL NOT INCLUDE ANY PERSON PERFORMING A SERVICE IF:
(I) THE PERSON IS FREE FROM CONTROL AND DIRECTION IN CONNECTION WITH
THE PERFORMANCE OF THE SERVICE, BOTH UNDER HIS OR HER CONTRACT FOR THE
PERFORMANCE OF SERVICE AND IN FACT;
(II) THE SERVICE IS PERFORMED OUTSIDE THE USUAL COURSE OF THE BUSINESS
OF AN EMPLOYER; AND
(III) THE PERSON IS CUSTOMARILY ENGAGED IN AN INDEPENDENTLY ESTAB-
LISHED TRADE, OCCUPATION, PROFESSION OR BUSINESS OF THE SAME NATURE AS
THAT INVOLVED IN THE SERVICE PERFORMED.
(B) THE FAILURE TO WITHHOLD FEDERAL OR STATE INCOME TAXES, OR TO PAY
UNEMPLOYMENT COMPENSATION CONTRIBUTIONS OR WORKERS' COMPENSATION PREMI-
UMS WITH RESPECT TO A PERSON'S WAGES SHALL NOT BE CONSIDERED IN MAKING A
DETERMINATION PURSUANT TO THIS SUBDIVISION.
(C) A PERSON'S EXERCISE OF THE OPTION TO SECURE WORKERS' COMPENSATION
INSURANCE WITH A CARRIER AS A SOLE PROPRIETOR OR PARTNERSHIP SHALL NOT
BE CONSIDERED IN MAKING A DETERMINATION PURSUANT TO THIS SUBDIVISION.
S 9. Section 511 of the labor law is amended by adding a new subdivi-
sion 23 to read as follows:
23. (A) NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION, EMPLOY-
MENT SHALL BE DEFINED BY THE DEPARTMENT OF TAXATION AND FINANCE.
EMPLOYMENT SHALL NOT INCLUDE WORK BY ANY PERSON PERFORMING A SERVICE IF:
(I) THE PERSON IS FREE FROM CONTROL AND DIRECTION IN CONNECTION WITH
THE PERFORMANCE OF THE SERVICE, BOTH UNDER HIS OR HER CONTRACT FOR THE
PERFORMANCE OF THE SERVICE AND IN FACT;
(II) THE SERVICE IS PERFORMED OUTSIDE THE USUAL COURSE OF THE BUSINESS
OF AN EMPLOYER; AND
(III) THE PERSON IS CUSTOMARILY ENGAGED IN AN INDEPENDENTLY ESTAB-
LISHED TRADE, OCCUPATION, PROFESSION OR BUSINESS OF THE SAME NATURE AS
THAT INVOLVED IN THE SERVICE PERFORMED.
(B) THE FAILURE TO WITHHOLD FEDERAL OR STATE INCOME TAXES, OR TO PAY
UNEMPLOYMENT COMPENSATION CONTRIBUTIONS OR WORKERS' COMPENSATION PREMI-
UMS WITH RESPECT TO A PERSON'S WAGES SHALL NOT BE CONSIDERED IN MAKING A
DETERMINATION PURSUANT TO THIS SUBDIVISION.
(C) A PERSON'S EXERCISE OF THE OPTION TO SECURE WORKERS' COMPENSATION
INSURANCE WITH A CARRIER AS A SOLE PROPRIETOR OR PARTNERSHIP SHALL NOT
BE CONSIDERED IN MAKING A DETERMINATION PURSUANT TO THIS SUBDIVISION.
S 10. Subdivision 5 of section 651 of the labor law is REPEALED and a
new subdivision 5 is added to read as follows:
5. "EMPLOYEE" MEANS A PERSON ENGAGED IN ANY EMPLOYMENT AS DETERMINED
BY THE DEPARTMENT OF TAXATION AND FINANCE.
(A) SUCH TERM SHALL NOT INCLUDE ANY PERSON PERFORMING A SERVICE IF:
A. 6793 5
(I) THE PERSON IS FREE FROM CONTROL AND DIRECTION IN CONNECTION WITH
THE PERFORMANCE OF THE SERVICE, BOTH UNDER HIS OR HER CONTRACT FOR THE
PERFORMANCE OF SERVICE AND IN FACT;
(II) THE SERVICE IS PERFORMED OUTSIDE THE USUAL COURSE OF THE BUSINESS
OF AN EMPLOYER; AND
(III) THE PERSON IS CUSTOMARILY ENGAGED IN AN INDEPENDENTLY ESTAB-
LISHED TRADE, OCCUPATION, PROFESSION OR BUSINESS OF THE SAME NATURE AS
THAT INVOLVED IN THE SERVICE PERFORMED.
(B) THE FAILURE TO WITHHOLD FEDERAL OR STATE INCOME TAXES OR TO PAY
UNEMPLOYMENT COMPENSATION CONTRIBUTIONS OR WORKERS' COMPENSATION PREMI-
UMS WITH RESPECT TO A PERSON'S WAGES SHALL NOT BE CONSIDERED IN MAKING A
DETERMINATION PURSUANT TO THIS SUBDIVISION.
(C) A PERSON'S EXERCISE OF THE OPTION TO SECURE WORKERS' COMPENSATION
INSURANCE WITH A CARRIER AS A SOLE PROPRIETOR OR PARTNERSHIP SHALL NOT
BE CONSIDERED IN MAKING A DETERMINATION PURSUANT TO THIS SUBDIVISION.
S 11. Subdivision 2 of section 671 of the labor law, as added by chap-
ter 552 of the laws of 1969, is amended to read as follows:
2. (A) "Employee" includes any individual employed or permitted to
work by an employer on a farm AS DETERMINED BY THE COMMISSIONER OF TAXA-
TION AND FINANCE but shall not include: [(a)] (I) domestic service in
the home of the employer; [(b)] (II) the parent, spouse, child or other
member of the employer's immediate family; [(c)] (III) a minor under
seventeen years of age employed as a hand harvest worker on the same
farm as his parent or guardian and who is paid on a piece-rate basis at
the same piece rate as employees seventeen years of age or over; [(d)]
(IV) an individual employed or permitted to work for a federal, state,
or a municipal government or political subdivision thereof; or [(e)] (V)
an individual to whom the provisions of article nineteen of this chapter
are applicable.
(B) SUCH TERM SHALL NOT INCLUDE ANY PERSON PERFORMING A SERVICE IF:
(I) THE PERSON IS FREE FROM CONTROL AND DIRECTION IN CONNECTION WITH
THE PERFORMANCE OF THE SERVICE, BOTH UNDER HIS OR HER CONTRACT FOR THE
PERFORMANCE OF SERVICE AND IN FACT;
(II) THE SERVICE IS PERFORMED OUTSIDE OF THE USUAL COURSE OF THE BUSI-
NESS OF AN EMPLOYER; AND
(III) THE PERSON IS CUSTOMARILY ENGAGED IN AN INDEPENDENTLY ESTAB-
LISHED TRADE, OCCUPATION, PROFESSION OR BUSINESS OF THE SAME NATURE AS
THAT INVOLVED IN THE SERVICE PERFORMED.
(C) THE FAILURE TO WITHHOLD FEDERAL OR STATE INCOME TAXES, OR TO PAY
UNEMPLOYMENT COMPENSATION CONTRIBUTIONS OR WORKERS' COMPENSATION PREMI-
UMS WITH RESPECT TO A PERSON'S WAGES SHALL NOT BE CONSIDERED IN MAKING A
DETERMINATION PURSUANT TO THIS SUBDIVISION.
(D) A PERSON'S EXERCISE OF THE OPTION TO SECURE WORKERS' COMPENSATION
INSURANCE WITH A CARRIER AS A SOLE PROPRIETOR OR PARTNERSHIP SHALL NOT
BE CONSIDERED IN MAKING A DETERMINATION PURSUANT TO THIS SUBDIVISION.
S 12. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law; provided that, effec-
tive immediately, any rules and regulations necessary to implement the
provisions of this act on its effective date are authorized and directed
to be completed on or before such date.