A. 8237 2
IN RECORD NUMBERS. IN ADDITION, THERE HAS BEEN AND EXPLOSION OF EMPLOY-
ERS WHO OPERATE IN THE UNDERGROUND ECONOMY AND FAIL TO REPORT ALL OR A
SIZABLE PORTION OF THEIR WORKERS.
THE LEGISLATURE HEREBY FINDS AND DECLARES THAT RECENT STUDIES OF NEW
YORK CITY'S CONSTRUCTION INDUSTRY ALONE SUGGESTS THAT AS MANY AS FIFTY
THOUSAND NEW YORK CITY CONSTRUCTION WORKERS -- NEARLY ONE IN FOUR -- ARE
EITHER MISCLASSIFIED AS INDEPENDENT CONTRACTORS OR ARE EMPLOYED BY
CONSTRUCTION CONTRACTORS COMPLETELY OFF THE BOOKS. CONSTRUCTION INDUSTRY
FRAUD REDUCES GOVERNMENT REVENUE, SHIFTS TAX AND WORKERS' COMPENSATION
INSURANCE COSTS TO LAW-ABIDING EMPLOYEES, LOWERS WORKING CONDITIONS AND
STEALS JOBS FROM LEGITIMATE EMPLOYERS AND THEIR EMPLOYEES.
IN TWO THOUSAND FIVE ALONE, IT WAS ESTIMATED THAT THE LOST PAYROLL
TAXES AND SOCIAL INSURANCE PREMIUM PAYMENTS IN NEW YORK CITY DUE TO
CLASSIFICATION FRAUD EXCEEDED TWO HUNDRED SEVENTY MILLION DOLLARS. IN
ADDITION THE GOVERNMENT AND PROVIDERS WERE FORCED TO PAY AN ADDITIONAL
ONE HUNDRED FORTY-EIGHT MILLION DOLLARS FOR HEALTH CARE COSTS FRAUDU-
LENTLY SHIFTED FROM EMPLOYERS. FINALLY, IT WAS ESTIMATED THAT THE
GOVERNMENT WAS CHEATED OUT OF ALMOST SEVENTY MILLION DOLLARS IN LOST
INCOME TAXES DUE. MISCLASSIFICATION FRAUD CREATES SIGNIFICANT PROBLEMS
FOR WORKERS. THESE WORKERS ARE NOT COVERED BY WORKERS' COMPENSATION,
UNEMPLOYMENT INSURANCE, OR TEMPORARY DISABILITY. THEY ARE LIABLE FOR
TAXES THEY DO NOT OWE AND LOSE OVERTIME AND HEALTH BENEFITS. FINALLY,
UNSCRUPULOUS CONTRACTORS WHO ENGAGE IN FRAUD ARE ABLE TO UNDERCUT LAW-A-
BIDING CONTRACTORS BY AS MUSH AS THIRTY PERCENT IN THE PRICE OF
CONSTRUCTION SERVICES.
THEREFORE, THE LEGISLATURE HEREBY FINDS AND DECLARES THAT GOVERNMENT
HAS AN OBLIGATION TO CURB THIS UNDERGROUND ECONOMY, ENFORCE LONG-STAND-
ING EMPLOYMENT LAWS, ENSURE COMPLIANCE WITH ESSENTIAL SOCIAL INSURANCE
PROTECTIONS AND ELIMINATE THE UNFAIR COMPETITIVE ADVANTAGE FROM CONTRAC-
TORS IN THE UNDERGROUND ECONOMY BY AND THROUGH THE ENACTMENT OF THE NEW
YORK STATE CONSTRUCTION INDUSTRY FAIR PLAY ACT.
S 861-B. DEFINITIONS. AS USED IN THIS ARTICLE:
1. "CONSTRUCTION" MEANS ANY CONSTRUCTING, ALTERING, RECONSTRUCTING,
REPAIRING, REHABILITATING, REFINISHING, REFURBISHING, REMODELING, REME-
DIATING, RENOVATING, CUSTOM FABRICATING, MAINTENANCE, LANDSCAPING,
IMPROVING, WRECKING, PAINTING, DECORATING, DEMOLISHING, AND ADDING TO OR
SUBTRACTING FROM ANY BUILDING, STRUCTURE, HIGHWAY, ROADWAY, STREET,
BRIDGE, ALLEY, SEWER, DITCH, SEWAGE DISPOSAL PLANT, WATER WORKS, PARKING
FACILITY, RAILROAD, EXCAVATION OR OTHER STRUCTURE, PROJECT, DEVELOPMENT,
REAL PROPERTY OR IMPROVEMENT, OR TO DO ANY PART THEREOF, WHETHER OR NOT
THE PERFORMANCE OF THE WORK HEREIN DESCRIBED INVOLVES THE ADDITION TO,
OR FABRICATION INTO, ANY STRUCTURE, PROJECT, DEVELOPMENT, REAL PROPERTY
OR IMPROVEMENT HEREIN DESCRIBED OF ANY MATERIAL OR ARTICLE OF MERCHAN-
DISE. CONSTRUCTION SHALL ALSO INCLUDE MOVING CONSTRUCTION RELATED MATE-
RIALS ON THE JOB SITE TO OR FROM THE JOB SITE.
2. "CONTRACTOR" MEANS ANY SOLE PROPRIETOR, PARTNERSHIP, FIRM, CORPO-
RATION, LIMITED LIABILITY COMPANY, ASSOCIATION OR OTHER LEGAL ENTITY
PERMITTED BY LAW TO DO BUSINESS WITHIN THE STATE OF NEW YORK WHO ENGAGES
IN CONSTRUCTION AS DEFINED IN THIS ARTICLE.
3. "CONTRACTOR" INCLUDES A GENERAL CONTRACTOR AND A SUBCONTRACTOR.
4. "DEPARTMENT" MEANS THE DEPARTMENT OF LABOR.
5. "COMMISSIONER" MEANS THE COMMISSIONER OF LABOR.
6. "EMPLOYER" MEANS ANY CONTRACTOR THAT EMPLOYS INDIVIDUALS DEEMED
EMPLOYEES UNDER THIS ARTICLE;
7. "PERFORMING SERVICES" MEANS THE PERFORMANCE OF ANY CONSTRUCTING,
ALTERING, RECONSTRUCTING, REPAIRING, REHABILITATING, REFINISHING, REFUR-
A. 8237 3
BISHING, REMODELING, REMEDIATING, RENOVATING, CUSTOM FABRICATING, MAIN-
TENANCE, LANDSCAPING, IMPROVING, WRECKING, PAINTING, DECORATING, DEMOL-
ISHING, AND ADDING TO OR SUBTRACTING FROM ANY BUILDING, STRUCTURE,
HIGHWAY, ROADWAY, STREET, BRIDGE, ALLEY, SEWER, DITCH, SEWAGE DISPOSAL
PLANT, WATER WORKS, PARKING FACILITY, RAILROAD, EXCAVATION OR OTHER
STRUCTURE, PROJECT, DEVELOPMENT, REAL PROPERTY OR IMPROVEMENT, OR TO DO
ANY PART THEREOF, WHETHER OR NOT THE PERFORMANCE OF THE WORK HEREIN
DESCRIBED INVOLVES THE ADDITION TO, OR FABRICATION INTO, ANY STRUCTURE,
PROJECT, DEVELOPMENT, REAL PROPERTY OR IMPROVEMENT HEREIN DESCRIBED OF
ANY MATERIAL OR ARTICLE OF MERCHANDISE. CONSTRUCTION SHALL ALSO INCLUDE
MOVING CONSTRUCTION RELATED MATERIALS ON THE JOB SITE TO OR FROM THE JOB
SITE. SUCH SERVICES SHALL INCLUDE SERVICES BEING PERFORMED PURSUANT TO A
CONTRACT WITH THE STATE OR A MUNICIPALITY RELATING TO A PUBLIC WORKS
PROJECT.
S 861-C. PRESUMPTION OF EMPLOYMENT IN THE CONSTRUCTION INDUSTRY. 1.
ANY PERSON PERFORMING SERVICES FOR A CONTRACTOR SHALL BE CLASSIFIED AS
AN EMPLOYEE UNLESS ALL OF THE FOLLOWING CRITERIA ARE MET:
(A) THE INDIVIDUAL IS FREE FROM CONTROL AND DIRECTION IN PERFORMING
THE JOB, BOTH UNDER HIS OR HER CONTRACT AND IN FACT;
(B) THE SERVICE MUST BE PERFORMED OUTSIDE THE CONTRACTOR'S USUAL
COURSE OF BUSINESS; AND
(C) THE INDIVIDUAL MUST BE CUSTOMARILY ENGAGED IN AN INDEPENDENTLY
ESTABLISHED TRADE, OCCUPATION, PROFESSION, OR BUSINESS THAT IS SIMILAR
TO THE SERVICE AT ISSUE.
2. 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 UNDER THIS SECTION.
3. AN INDIVIDUAL'S EXERCISE OF THE OPTION TO SECURE WORKERS' COMPEN-
SATION INSURANCE WITH A CARRIER AS A SOLE PROPRIETOR OR PARTNERSHIP
SHALL NOT BE CONSIDERED IN MAKING A DETERMINATION UNDER THIS SECTION.
S 861-D. CERTIFICATION OF INDEPENDENT CONTRACTORS. 1. AN INDIVIDUAL
IS AN INDEPENDENT CONTRACTOR AND NOT AN EMPLOYEE OF THE CONTRACTOR FOR
WHOM THE INDIVIDUAL IS PERFORMING SERVICES ONLY IF THE PERSON MEETS THE
CRITERIA ESTABLISHED IN SECTION EIGHT HUNDRED SIXTY-ONE-C OF THIS ARTI-
CLE AND THE INDIVIDUAL HOLDS A CURRENT INDEPENDENT CONTRACTOR EXEMPTION
CERTIFICATE ISSUED BY THE COMMISSION AND IS PERFORMING SERVICES THERE-
UNDER.
2. (A) TO OBTAIN AN INDEPENDENT CONTRACTOR EXEMPTION CERTIFICATE, THE
INDIVIDUAL SHALL SUBMIT, IN THE MANNER PRESCRIBED BY THE COMMISSIONER, A
COMPLETE APPLICATION AND THE CERTIFICATE FEE REQUIRED UNDER THIS SUBDI-
VISION.
(B) A COMPLETE APPLICATION SHALL INCLUDE ALL OF THE FOLLOWING INFORMA-
TION:
(I) THE INDIVIDUAL'S FULL NAME;
(II) THE INDIVIDUAL'S RESIDENCE ADDRESS AND TELEPHONE NUMBER;
(III) THE INDIVIDUAL'S BUSINESS NAME, ADDRESS, AND TELEPHONE NUMBER;
(IV) THE SERVICES FOR WHICH THE INDIVIDUAL IS SEEKING AN INDEPENDENT
CONTRACTOR EXEMPTION CERTIFICATE;
(V) THE INDIVIDUAL'S SOCIAL SECURITY NUMBER;
(VI) THE INDIVIDUAL'S OR THE INDIVIDUAL'S BUSINESS FEDERAL EMPLOYER
IDENTIFICATION NUMBER, IF A NUMBER HAS BEEN ISSUED TO THE INDIVIDUAL OR
THE INDIVIDUAL'S BUSINESS;
(VII) ANY INFORMATION OR DOCUMENTATION THAT THE COMMISSIONER REQUIRES
BY RULE THAT WILL ASSIST THE DEPARTMENT IN DETERMINING WHETHER TO GRANT
OR DENY THE INDIVIDUAL'S APPLICATION; AND
A. 8237 4
(VIII) THE INDIVIDUAL'S SWORN STATEMENT THAT THE INDIVIDUAL MEETS ALL
OF THE FOLLOWING CONDITIONS:
(A) MAINTAINS A SEPARATE BUSINESS WITH THE INDIVIDUAL'S OWN OFFICE,
EQUIPMENT, MATERIALS, AND OTHER FACILITIES;
(B) HOLDS OR HAS APPLIED FOR A FEDERAL EMPLOYER IDENTIFICATION NUMBER
OR HAS FILED BUSINESS OR SELF-EMPLOYMENT INCOME TAX RETURNS WITH THE
FEDERAL INTERNAL REVENUE SERVICE IF THE PERSON HAS PERFORMED SERVICES IN
THE PREVIOUS YEAR FOR WHICH THE INDIVIDUAL IS SEEKING THE INDEPENDENT
CONTRACTOR EXEMPTION CERTIFICATE;
(C) OPERATES UNDER CONTRACTS TO PERFORM SPECIFIC SERVICES FOR SPECIFIC
AMOUNTS OF MONEY AND UNDER WHICH THE INDIVIDUAL CONTROLS THE MEANS OF
PERFORMING THE SERVICES;
(D) INCURS THE MAIN EXPENSES RELATED TO THE SERVICE THAT THE INDIVID-
UAL PERFORMS UNDER CONTRACT;
(E) IS RESPONSIBLE FOR THE SATISFACTORY COMPLETION OF SERVICES THAT
THE INDIVIDUAL CONTRACTS TO PERFORM AND IS LIABLE FOR A FAILURE TO
COMPLETE THE SERVICE;
(F) RECEIVES COMPENSATION FOR SERVICE PERFORMED UNDER A CONTRACT ON A
COMMISSION OR PER-JOB OR COMPETITIVE BID BASIS AND NOT ON ANY OTHER
BASIS;
(G) MAY REALIZE A PROFIT OR SUFFER A LOSS UNDER CONTRACTS TO PERFORM
SERVICE;
(H) HAS CONTINUING OR RECURRING BUSINESS LIABILITIES OR OBLIGATIONS;
AND
(I) THE SUCCESS OR FAILURE OF THE INDIVIDUAL'S BUSINESS DEPENDS ON THE
RELATIONSHIP OF BUSINESS RECEIPTS TO EXPENDITURES.
3. WITHIN THIRTY DAYS OF RECEIVING A COMPLETE APPLICATION AND THE
CERTIFICATE FEE, THE COMMISSIONER MUST EITHER GRANT OR DENY THE APPLICA-
TION. THE COMMISSIONER MAY DENY AN APPLICATION FOR AN INDEPENDENT
CONTRACTOR EXEMPTION CERTIFICATE IF THE INDIVIDUAL HAS NOT SUBMITTED A
COMPLETE APPLICATION AND CERTIFICATE FEE OR IF THE INDIVIDUAL DOES NOT
MEET ALL OF THE CONDITIONS FOR HOLDING THE INDEPENDENT CONTRACTOR
EXEMPTION CERTIFICATE. THE COMMISSIONER MAY REVOKE AN INDEPENDENT
CONTRACTOR EXEMPTION CERTIFICATE IF THE COMMISSIONER DETERMINES THAT THE
INDIVIDUAL NO LONGER MEETS ALL OF THE CONDITIONS FOR HOLDING THE INDE-
PENDENT CONTRACTOR EXEMPTION CERTIFICATE, COMMITS ANY OF THE ACTIONS SET
OUT IN SUBDIVISION FOUR OF THIS SECTION, OR FAILS TO COOPERATE WITH A
DEPARTMENT INVESTIGATION INTO THE CONTINUED VALIDITY OF THE INDIVIDUAL'S
CERTIFICATE. ONCE ISSUED, AN INDEPENDENT CONTRACTOR EXEMPTION CERTIF-
ICATE REMAINS IN EFFECT FOR TWO YEARS UNLESS:
(A) REVOKED BY THE COMMISSIONER; OR
(B) CANCELED BY THE INDIVIDUAL.
4. AN INDIVIDUAL SHALL NOT:
(A) PERFORM WORK AS AN INDEPENDENT CONTRACTOR WHO MEETS THE QUALIFICA-
TIONS UNDER SUBPARAGRAPH (B) OF THIS PARAGRAPH WITHOUT FIRST OBTAINING
FROM THE DEPARTMENT AN INDEPENDENT CONTRACTOR EXEMPTION CERTIFICATE;
(B) PERFORM WORK AS AN INDEPENDENT CONTRACTOR WHEN THE DEPARTMENT HAS
DENIED OR REVOKED THE INDIVIDUAL'S INDEPENDENT CONTRACTOR EXEMPTION
CERTIFICATE;
(C) TRANSFER TO ANOTHER INDIVIDUAL OR ALLOW ANOTHER INDIVIDUAL TO USE
THE INDIVIDUAL'S INDEPENDENT CONTRACTOR EXEMPTION CERTIFICATE;
(D) ALTER OR FALSIFY AN INDEPENDENT CONTRACTOR EXEMPTION CERTIFICATE;
(E) MISREPRESENT THE INDIVIDUAL'S STATUS AS AN INDEPENDENT CONTRACTOR;
OR
(F) MAKE A FALSE MATERIAL STATEMENT, REPRESENTATION, OR CERTIFICATION;
OMIT MATERIAL INFORMATION; OR ALTER, CONCEAL, OR FAIL TO FILE A DOCUMENT
A. 8237 5
REQUIRED BY THIS SECTION OR ANY RULE PROMULGATED BY THE COMMISSIONER
UNDER RULEMAKING AUTHORITY SET OUT IN THIS SECTION.
S 861-E. NOTICE TO PERSONS RECEIVING REMUNERATION FROM CONTRACTORS AND
SUBCONTRACTORS. 1. CONTRACTORS SHALL PROVIDE TO ALL INDIVIDUALS RECEIV-
ING REMUNERATION TO PERFORM CONSTRUCTION WORK A WRITTEN NOTICE, PROVIDED
BY THE COMMISSIONER, THAT DESCRIBES THE RESPONSIBILITY OF INDEPENDENT
CONTRACTORS TO PAY TAXES REQUIRED BY STATE AND FEDERAL LAW AND THE
RIGHTS OF EMPLOYEES TO WORKERS' COMPENSATION, UNEMPLOYMENT BENEFITS,
MINIMUM WAGE, OVERTIME AND OTHER FEDERAL AND STATE WORKPLACE
PROTECTIONS. SUCH INFORMATION SHALL ALSO CONTAIN CONTACT INFORMATION FOR
SUCH PERSONS TO FILE COMPLAINTS OR INQUIRE WITH THE COMMISSIONER ABOUT
EMPLOYMENT CLASSIFICATION STATUS. IN ADDITION, THE NOTICE SHALL CONTAIN
THE ADDRESS TO THE WEB SITE DESCRIBED IN SUBDIVISION THREE OF THIS
SECTION, THE PROTECTIONS IN THIS ARTICLE AGAINST RETALIATION AND THE
PENALTIES IN THIS ARTICLE IF THE CONTRACTOR HAS FAILED TO PROPERLY CLAS-
SIFY THE PERSON AS AN EMPLOYEE.
2. THE INFORMATION IN SUBDIVISION ONE OF THIS SECTION SHALL BE
PROVIDED IN SPANISH OR OTHER LANGUAGES REQUIRED BY THE COMMISSIONER.
3. WITHIN SIX MONTHS OF THE EFFECTIVE DATE OF THIS ARTICLE, THE
COMMISSIONER SHALL CREATE THE NOTICE DESCRIBED IN SUBDIVISION ONE OF
THIS SECTION. IN ADDITION, WITHIN THE SAME TIME PERIOD, THE COMMISSIONER
SHALL CREATE A WEB SITE THAT CONTAINS THE SAME INFORMATION AND THE
NOTICE. SUCH NOTICE SHALL BE PROVIDED TO CONTRACTORS THROUGH DOWNLOADING
FROM THE WEB SITE.
4. CONTRACTORS IN THEIR AGREEMENTS WITH ALL SUBCONTRACTORS SHALL
REQUIRE THEM TO:
(A) PROVIDE THE NOTICE DESCRIBED IN THIS SECTION, AND
(B) PLACE THE NOTICE REQUIREMENT IN CONTRACTS WITH ANY LOWER TIER
SUBCONTRACTORS.
5. CONTRACTORS WHO VIOLATE THIS SECTION SHALL BE FINED:
(A) TWO THOUSAND DOLLARS PER INDIVIDUAL WHO IS NOT NOTIFIED; AND
(B) FIVE THOUSAND DOLLARS PER CONTRACT WITH A SUBCONTRACTOR OR LOWER
TIER SUBCONTRACTOR THAT DOES NOT CONTAIN THE NOTICE REQUIREMENT.
S 861-F. VIOLATIONS. A CONTRACTOR IS GUILTY OF VIOLATING THE
PROVISIONS OF SECTION EIGHT HUNDRED SIXTY-ONE-C OF THIS ARTICLE WHEN HE
OR SHE:
1. FAILS TO PROPERLY CLASSIFY AN INDIVIDUAL AS AN EMPLOYEE; AND
2. VIOLATES ANOTHER PROVISION OF THIS CHAPTER.
S 861-G. ENFORCEMENT AND PENALTIES. 1. FOR THE PURPOSES OF THIS
SECTION:
(A) THE TERM "INTENTIONAL VIOLATION" SHALL MEAN A CONTRACTOR WHO KNEW
OR SHOULD HAVE KNOWN THAT HIS OR HER CONDUCT WAS PROHIBITED BY THIS
SECTION;
(B) THE TERM "UNINTENTIONAL VIOLATIONS" SHALL MEAN A CONTRACTOR WHO
ACTED REASONABLY IN DETERMINING THEIR LEGAL OBLIGATIONS BUT HIS OR HER
CONDUCT WAS PROHIBITED UNDER THIS SECTION; AND
(C) THE TERM "DEBARMENT" SHALL MEAN DEBARMENT FROM BIDDING ON ANY AND
ALL STATE AND PUBLIC WORKS PROJECTS.
2. ANY CONTRACTOR WHO FAILS TO CLASSIFY AN INDIVIDUAL AS AN EMPLOYEE
ACCORDING TO THIS ARTICLE, IN ANY RESPECT, SHALL BE SUBJECT TO CRIMINAL
AND CIVIL REMEDIES. IN ADDITION, THE ATTORNEY GENERAL CAN ISSUE CIVIL
CITATIONS AND COMMENCE CRIMINAL PROCEEDINGS FOR BOTH INTENTIONAL AND
NON-INTENTIONAL VIOLATIONS OF THE LAW. THE PENALTIES AND FINES TO BE
IMPOSED ON A CONTRACTOR FOR VIOLATIONS OF THIS SECTION ARE AS FOLLOWS:
(A) WHEN A CONTRACTOR WHO IS FOUND GUILTY OF INTENTIONALLY VIOLATING
THE PROVISIONS OF THIS SECTION, THE JUDGE SHALL FOR A FIRST OFFENSE:
A. 8237 6
(I) SENTENCE THE DEFENDANT TO A PERIOD OF IMPRISONMENT OF NOT MORE
THAN ONE YEAR AND/OR IMPOSE A FINE OF NOT MORE THAN TWENTY-FIVE THOUSAND
DOLLARS; OR
(II) SENTENCE THE DEFENDANT TO A FIVE-YEAR DEBARMENT; OR
(III) ANY COMBINATION OF THE PENALTIES AND FINES IMPOSED PURSUANT TO
SUBPARAGRAPHS (I) AND (II) OF THIS PARAGRAPH.
(B) WHEN A CONTRACTOR IS FOUND GUILTY OF INTENTIONALLY VIOLATING THE
PROVISIONS OF THIS SECTION, THE JUDGE SHALL FOR A SUBSEQUENT OFFENSE:
(I) SENTENCE THE DEFENDANT TO A PERIOD OF IMPRISONMENT OF NOT MORE
THAN TWO YEARS AND/OR IMPOSE A FINE OF NOT MORE THAN FIFTY THOUSAND
DOLLARS; OR
(II) SENTENCE THE DEFENDANT TO A FIVE-YEAR DEBARMENT; OR
(III) ANY COMBINATION OF THE PENALTIES AND FINES IMPOSED PURSUANT TO
SUBPARAGRAPHS (I) AND (II) OF THIS PARAGRAPH.
(C) WHEN AN EMPLOYER IS FOUND GUILTY OF UNINTENTIONALLY VIOLATING THE
PROVISIONS OF THIS SECTION, THE JUDGE SHALL FOR A FIRST OFFENSE:
(I) SENTENCE THE DEFENDANT TO A PERIOD OF IMPRISONMENT OF NOT MORE
THAN SIX MONTHS AND/OR IMPOSE A FINE OF NOT MORE THAN TEN THOUSAND
DOLLARS; OR
(II) SENTENCE THE DEFENDANT TO A SIX-MONTH DEBARMENT; OR
(III) ANY COMBINATION OF THE PENALTIES AND FINES IMPOSED PURSUANT TO
SUBPARAGRAPHS (I) AND (II) OF THIS PARAGRAPH.
(D) WHEN AN EMPLOYER IS FOUND GUILTY OF UNINTENTIONALLY VIOLATING THE
PROVISIONS OF THIS SECTION, THE JUDGE SHALL FOR A SUBSEQUENT OFFENSE:
(I) SENTENCE THE DEFENDANT TO A PERIOD OF IMPRISONMENT OF NOT MORE
THAN ONE YEAR AND/OR IMPOSE A FINE OF NOT MORE THAN TWENTY-FIVE THOUSAND
DOLLARS; OR
(II) SENTENCE THE DEFENDANT TO A THREE-YEAR DEBARMENT; OR
(III) ANY COMBINATION OF THE PENALTIES AND FINES IMPOSED PURSUANT TO
SUBPARAGRAPHS (I) AND (II) OF THIS PARAGRAPH.
3. IN ADDITION TO PENALTIES UNDER SUBDIVISION TWO OF THIS SECTION, AN
EMPLOYER SHALL BE SUBJECT TO THE FOLLOWING CIVIL PENALTIES IMPOSED BY
THE DEPARTMENT:
(A) WHEN AN EMPLOYER LACKED SPECIFIC INTENT TO VIOLATE THE LAW AND HAS
NO PRIOR CIVIL CITATIONS OR CRIMINAL CONVICTIONS FOR A FIRST OFFENSE THE
DEFENDANT SHALL PAY A CIVIL FINE OF NOT MORE THAN SEVEN THOUSAND FIVE
HUNDRED DOLLARS PER AFFECTED EMPLOYEE.
(B) WHEN AN EMPLOYER LACKED SPECIFIC INTENT TO VIOLATE THE LAW AND HAS
NO PRIOR CIVIL CITATIONS OR CRIMINAL CONVICTIONS FOR A SUBSEQUENT
OFFENSE THE DEFENDANT SHALL PAY A CIVIL FINE OF NOT MORE THAN
TWENTY-FIVE THOUSAND DOLLARS PER AFFECTED EMPLOYEE.
(C) WHEN AN EMPLOYER LACKED SPECIFIC INTENT TO VIOLATE THE LAW FOR A
FIRST OFFENSE THE DEFENDANT SHALL PAY A CIVIL FINE OF NOT MORE THAN
FIFTEEN THOUSAND DOLLARS PER AFFECTED EMPLOYEE.
(D) WHEN AN EMPLOYER HAD SPECIFIC INTENT TO VIOLATE THE LAW FOR A
SUBSEQUENT OFFENSE THE DEFENDANT SHALL PAY A CIVIL FINE OF NOT MORE THAN
TWENTY-FIVE THOUSAND DOLLARS PER AFFECTED EMPLOYEE.
4. IN ADDITION TO CRIMINAL AND CIVIL PENALTIES UNDER SUBDIVISIONS TWO
AND THREE OF THIS SECTION, AN EMPLOYER SHALL BE SUBJECT TO A PERIOD OF
DEBARMENT RESULTING FROM CIVIL CITATIONS AS FOLLOWS:
(A) WHEN AN EMPLOYER HAS RECEIVED TWO OR MORE INTENTIONAL CITATIONS
THE DEFENDANT SHALL BE SUBJECT TO A TWO-YEAR DEBARMENT PERIOD.
(B) WHEN AN EMPLOYER FAILS TO COMPLY WITH A CIVIL CITATION OR ADMINIS-
TRATIVE ORDER THE DEFENDANT SHALL BE SUBJECT TO A ONE-YEAR DEBARMENT
PERIOD.
A. 8237 7
5. ANY EMPLOYEE MAY FILE CIVIL ACTIONS FOR THEMSELVES AND OTHERS SIMI-
LARLY SITUATED SEEKING LOST WAGES, TREBLE DAMAGES, ATTORNEY'S FEES AND
COSTS FOR UP TO THREE YEARS FROM THE DATE OF VIOLATION.
6. A PENALTY ISSUED UNDER THIS SECTION AGAINST A CONSTRUCTION INDUSTRY
EMPLOYER SHALL BE IN EFFECT AGAINST ANY SUCCESSOR CORPORATION OR BUSI-
NESS ENTITY THAT HAS ONE OR MORE OF THE SAME PRINCIPALS OR OFFICERS AS
THE CONSTRUCTION INDUSTRY EMPLOYER AGAINST WHOM THE PENALTY WAS IMPOSED
AND THAT WAS ENGAGED IN CONSTRUCTION WORK.
7. NOTHING IN THIS SECTION SHALL LIMIT THE AVAILABILITY OF OTHER REME-
DIES AT LAW OR IN EQUITY.
S 861-H. ADVISORY COMMITTEE ON CONSTRUCTION INDUSTRY CLASSIFICATION.
1. THERE IS HEREBY ESTABLISHED THE ADVISORY COMMITTEE ON CONSTRUCTION
INDUSTRY CLASSIFICATION. THE MISSION OF SUCH ADVISORY COMMITTEE IS TO
DEVELOP RECOMMENDATIONS FOR A COMPREHENSIVE AND STRATEGIC STATEWIDE
APPROACH TO ADDRESSING THE PROBLEM OF EMPLOYEE MISCLASSIFICATION IN THE
CONSTRUCTION INDUSTRY AND TO ENSURE CONTRACTOR COMPLIANCE WITH "THE NEW
YORK STATE CONSTRUCTION INDUSTRY FAIR PLAY ACT."
2. THE ADVISORY COMMITTEE SHALL BE COMPOSED OF THE COMMISSIONER OR A
DESIGNEE, SERVING EX OFFICIO; THE ATTORNEY GENERAL OR A DESIGNEE,
SERVICE EX OFFICIO; THE COMMISSIONER OF TAXATION AND FINANCE, SERVING EX
OFFICIO; THE CHAIR OF THE WORKERS' COMPENSATION BOARD; EIGHT MEMBERS
SHALL BE APPOINTED BY THE GOVERNOR AND SHALL SERVE AT HIS PLEASURE AS
FOLLOWS: THREE REPRESENTATIVES FROM THREE DIFFERENT BUILDING TRADES
UNIONS; ONE REPRESENTATIVE OF THE NEW YORK AFL-CIO; ONE REPRESENTATIVE
OF RESIDENTIAL DEVELOPERS; ONE REPRESENTATIVE OF RESIDENTIAL
CONSTRUCTION CONTRACTORS; ONE REPRESENTATIVE OF COMMERCIAL DEVELOPERS;
AND ONE REPRESENTATIVE OF COMMERCIAL CONSTRUCTION CONTRACTORS.
3. THE COMMISSIONER SHALL SERVE AS THE CHAIR OF THE ADVISORY COMMIT-
TEE. ALL PUBLIC MEMBERS OF THE ADVISORY COMMITTEE SHALL SERVE WITHOUT
COMPENSATION. VACANCIES ON THE ADVISORY COMMITTEE SHALL BE FILLED IN THE
SAME MANNER AS THE ORIGINAL APPOINTMENT.
4. IN FURTHERANCE OF ITS MISSION STATED IN SUBDIVISION ONE, ABOVE, THE
ADVISORY COMMITTEE SHALL BE AUTHORIZED TO:
(A) MAKE RECOMMENDATIONS TO THE DEPARTMENT, THE ATTORNEY GENERAL, THE
DEPARTMENT OF TAXATION AND FINANCE AND THE WORKERS' COMPENSATION BOARD
WITH RESPECT TO SYNCHRONIZING EACH RESPECTIVE DEPARTMENT'S REGULATIONS
AND POLICIES REGARDING EMPLOYEE MISCLASSIFICATION;
(B) CONDUCT PUBLIC HEARINGS TO INCREASE PUBLIC AWARENESS OF THE ILLE-
GAL NATURE AND HARMS INFLICTED BY EMPLOYEE MISCLASSIFICATION IN THE
CONSTRUCTION INDUSTRY AND TO HIGHLIGHT POTENTIAL SIGNIFICANT CASES OF
MISCLASSIFICATION THAT MAY WARRANT INVESTIGATION BY THE APPROPRIATE
GOVERNMENT AGENCY;
(C) MAKE RECOMMENDATIONS TO ENHANCE MECHANISMS FOR IDENTIFYING EMPLOY-
EE MISCLASSIFICATION WHERE IT DOES OCCUR;
(D) WORK WITH BUSINESS, LABOR AND COMMUNITY GROUPS TO DEVELOP EDUCA-
TIONAL MATERIALS THAT DISTINGUISH THE DIFFERENCE BETWEEN AN INDEPENDENT
CONTRACTOR AND AN EMPLOYEE; AND
(E) COOPERATE WITH STATE, FEDERAL AND LOCAL SOCIAL SERVICES AGENCIES
TO IDENTIFY WAYS TO PROVIDE ASSISTANCE TO VULNERABLE POPULATIONS THAT
HAVE BEEN EXPLOITED BY EMPLOYEE MISCLASSIFICATION, INCLUDING, BUT NOT
LIMITED TO, IMMIGRANT WORKERS.
5. THE ADVISORY COMMITTEE SHALL ISSUE A REPORT ANNUALLY TO THE GOVER-
NOR ON THE STATUS OF IMPLEMENTATION OF THE NEW YORK STATE CONSTRUCTION
INDUSTRY FAIR PLAY ACT, TO INCLUDE PUBLICLY AVAILABLE INFORMATION
REGARDING: CASES BROUGHT, WAGES AND TAXES RECOVERED ON BEHALF OF THE
STATE, OUTCOMES OF CASES, LEGAL OR ADMINISTRATIVE BARRIERS TO SUCCESSFUL
A. 8237 8
IMPLEMENTATION, A REVIEW OF THE PROCESS USED TO ADJUDICATE MISCLASSI-
FICATION CASES, AND PROPOSALS FOR ANY ADDITIONAL LEGISLATIVE ACTION THAT
MAY BE NEEDED TO ENHANCE THE STATE'S EFFORTS TO ADDRESS EMPLOYEE
MISCLASSIFICATION IN THE CONSTRUCTION INDUSTRY.
6. THE ADVISORY COMMITTEE IS AUTHORIZED TO CALL UPON ANY DEPARTMENT,
OFFICE, DIVISION OR AGENCY OF THIS STATE TO SUPPLY IT WITH DATA AND
OTHER INFORMATION, PERSONNEL OR ASSISTANCE AVAILABLE TO SUCH AGENCY AS
THE ADVISORY COMMITTEE DEEMS NECESSARY TO DISCHARGE ITS DUTIES UNDER
THIS ARTICLE. EACH DEPARTMENT, OFFICE, DIVISION OR AGENCY OF THIS STATE
IS HEREBY REQUIRED, TO THE EXTENT NOT INCONSISTENT WITH LAW, TO COOPER-
ATE FULLY WITH THE ADVISORY COMMITTEE AND TO FURNISH THE ADVISORY
COMMITTEE SUCH ASSISTANCE ON AS TIMELY A BASIS AS IS NECESSARY TO ACCOM-
PLISH THE PURPOSES OF THIS ARTICLE. THE ADVISORY COMMITTEE MAY CONSULT
WITH EXPERTS OR OTHER KNOWLEDGEABLE INDIVIDUALS IN THE PUBLIC OR PRIVATE
SECTOR ON ANY ASPECT OF ITS MISSION.
S 861-I. RETALIATION. 1. IT IS AN INTENTIONAL VIOLATION OF THIS ARTI-
CLE FOR AN EMPLOYER OR ENTITY, OR ANY AGENT OF AN EMPLOYER OR ENTITY, TO
RETALIATE THROUGH DISCHARGE OR IN ANY OTHER MANNER AGAINST ANY PERSON
FOR EXERCISING ANY RIGHTS GRANTED UNDER THIS ARTICLE. SUCH RETALIATION
SHALL SUBJECT AN EMPLOYER OR ENTITY TO CIVIL PENALTIES PURSUANT TO THIS
ARTICLE OR A PRIVATE CAUSE OF ACTION, OR BOTH.
2. IT IS AN INTENTIONAL VIOLATION OF THIS ARTICLE FOR AN EMPLOYER OR
ENTITY TO RETALIATE AGAINST A PERSON FOR:
(A) MAKING A COMPLAINT TO AN EMPLOYER OR ENTITY, TO A CO-WORKER, TO A
COMMUNITY ORGANIZATION, BEFORE A PUBLIC HEARING, OR TO A STATE OR FEDER-
AL AGENCY THAT RIGHTS GUARANTEED UNDER THIS ARTICLE HAVE BEEN VIOLATED;
(B) CAUSING TO BE INSTITUTED ANY PROCEEDING UNDER OR RELATED TO THIS
ARTICLE; OR
(C) TESTIFYING OR PREPARING TO TESTIFY IN AN INVESTIGATION OR PROCEED-
ING UNDER THIS ARTICLE.
S 2. The state finance law is amended by adding a new section 99-t to
read as follows:
S 99-T. CONSTRUCTION INDUSTRY CLASSIFICATION FUND. 1. THERE IS HEREBY
ESTABLISHED IN THE JOINT CUSTODY OF THE STATE COMPTROLLER AND THE
COMMISSIONER OF TAXATION AND FINANCE AN ACCOUNT IN THE MISCELLANEOUS
SPECIAL REVENUE FUND TO BE KNOWN AS THE "CONSTRUCTION INDUSTRY CLASSI-
FICATION FUND".
2. THE CONSTRUCTION INDUSTRY CLASSIFICATION FUND SHALL CONSIST OF ALL
MONEYS RECEIVED BY THE STATE AS FEES AND CIVIL PENALTIES PURSUANT TO
ARTICLE TWENTY-FIVE-B OF THE LABOR LAW.
3. SUCH FUND SHALL BE SUBJECT TO APPROPRIATION BY THE DEPARTMENT OF
LABOR FOR ADMINISTRATION, INVESTIGATION AND OTHER EXPENSES INCURRED IN
CARRYING OUT ITS POWERS AND DUTIES PURSUANT TO ARTICLE TWENTY-FIVE-B OF
THE LABOR LAW. THE DEPARTMENT OF LABOR SHALL HIRE AS MANY INVESTIGATORS
AND OTHER PERSONNEL AS MAY BE NECESSARY. ANY MONEYS IN THE FUND AT THE
END OF THE FISCAL YEAR IN EXCESS OF ANY MONEYS NECESSARY FOR THE DEPART-
MENT OF LABOR TO CARRY OUT ITS POWERS AND DUTIES UNDER ARTICLE
TWENTY-FIVE-B SHALL BE AVAILABLE TO THE DEPARTMENT OF LABOR FOR THE NEXT
FISCAL YEAR FOR ANY OF THE DEPARTMENT OF LABOR'S DUTIES.
S 3. The provisions of this act shall be used for determination of an
individual's employment status for the purpose of taxation and finance,
workers' compensation issues, or any issues through the department of
labor.
S 4. This act shall take effect on the sixtieth day after it shall
have become a law.