S T A T E   O F   N E W   Y O R K
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                                 5847--A

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 11, 2009
                               ___________

Introduced  by  Sens.  ONORATO, FOLEY, BRESLIN -- read twice and ordered
  printed, and when printed to be committed to the Committee on Rules --
  recommitted to the Committee on Labor in accordance with  Senate  Rule
  6,  sec. 8 -- committee discharged, bill amended, ordered reprinted as
  amended and recommitted to said committee

AN ACT to amend the labor law, in relation to  enacting  the  "New  York
  state  construction industry fair play act"; and to amend the workers'
  compensation law, the tax law and the state finance law,  in  relation
  to creating the construction industry classification fund

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The labor law is amended by adding a new  article  25-B  to
read as follows:
                              ARTICLE 25-B
         THE NEW YORK STATE CONSTRUCTION INDUSTRY FAIR PLAY ACT
SECTION 861.   SHORT TITLE.
        861-A. LEGISLATIVE FINDINGS AND INTENT.
        861-B. DEFINITIONS.
        861-C. PRESUMPTION OF EMPLOYMENT IN THE CONSTRUCTION INDUSTRY.
        861-D. NOTICE TO PERSONS RECEIVING REMUNERATION FROM CONTRACTORS
                 AND SUBCONTRACTORS.
        861-E. VIOLATIONS AND PENALTIES.
        861-F. ADVISORY COMMITTEE ON EMPLOYMENT CLASSIFICATION.
        861-G. RETALIATION.
  S  861.  SHORT TITLE.  THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
THE "NEW YORK STATE CONSTRUCTION INDUSTRY FAIR PLAY ACT".
  S 861-A. LEGISLATIVE FINDINGS AND INTENT. THE LEGISLATURE HEREBY FINDS
AND DECLARES THAT NEW YORK STATE'S CONSTRUCTION INDUSTRY IS EXPERIENCING
DANGEROUS  LEVELS  OF  EMPLOYEE  MISCLASSIFICATION  FRAUD.  UNSCRUPULOUS
EMPLOYERS  ARE INTENTIONALLY REPORTING EMPLOYEES AS INDEPENDENT CONTRAC-
TORS TO STATE AND FEDERAL AUTHORITIES OR WORKERS' COMPENSATION  CARRIERS

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11756-09-0
              

S. 5847--A                          2

IN RECORD NUMBERS. IN ADDITION, THERE HAS BEEN AN EXPLOSION OF EMPLOYERS
WHO OPERATE IN THE UNDERGROUND ECONOMY AND FAIL TO REPORT ALL OR A SIZA-
BLE 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  MUCH  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 CONSTRUCTING, RECONSTRUCTING, ALTERING,  MAIN-
TAINING,  MOVING, REHABILITATING, REPAIRING, RENOVATING OR DEMOLITION OF
ANY BUILDING, STRUCTURE, OR IMPROVEMENT, OR RELATING TO  THE  EXCAVATION
OF OR OTHER DEVELOPMENT OR IMPROVEMENT TO LAND.
  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 AN INDIVIDUAL CLASSI-
FIED AS AN EMPLOYEE UNDER THIS ARTICLE.
  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.

S. 5847--A                          3

  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  ACT  OF SECURING WORKERS' COMPENSATION INSURANCE
WITH A CARRIER AS A SOLE PROPRIETOR OR PARTNERSHIP SHALL NOT BE  CONSID-
ERED IN MAKING A DETERMINATION UNDER THIS SECTION.
  S 861-D. 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  AGAINST  RETALIATION IN THIS ARTICLE 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  SUBJECT  TO  THE
FOLLOWING CIVIL PENALTIES:
  (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-E. VIOLATION AND PENALTIES. 1. ANY CONTRACTOR WHO FAILS TO PROP-
ERLY CLASSIFY AN INDIVIDUAL AS AN EMPLOYEE  AS  PROVIDED  UNDER  SECTION
EIGHT  HUNDRED SIXTY-ONE-C OF THIS ARTICLE SHALL BE SUBJECT TO THE CIVIL
AND CRIMINAL PENALTIES PROVIDED UNDER THIS SECTION.
  2. FOR THE PURPOSES OF THIS SECTION,  THE  TERM  "WILLFULLY  VIOLATES"
MEANS A CONTRACTOR KNEW OR SHOULD HAVE KNOWN THAT HIS OR HER CONDUCT WAS
PROHIBITED BY THIS SECTION.
  3.  ANY CONTRACTOR WHO WILLFULLY VIOLATES SECTION EIGHT HUNDRED SIXTY-
ONE-C OF THIS ARTICLE SHALL BE SUBJECT TO A CIVIL PENALTY OF UP TO TWEN-
TY-FIVE HUNDRED DOLLARS FOR THE FIRST VIOLATION PER EMPLOYEE, AND  TO  A
CIVIL  PENALTY  OF  UP  TO  FIVE  THOUSAND  DOLLARS  FOR EACH SUBSEQUENT
VIOLATION PER EMPLOYEE.
  4. IF THE CONTRACTOR IS A CORPORATION, ANY OFFICER OF SUCH CORPORATION
OR SHAREHOLDER WHO  OWNS  OR  CONTROLS  AT  LEAST  TEN  PERCENT  OF  THE
OUTSTANDING  STOCK  OF SUCH CORPORATION WHO KNOWINGLY PERMITS THE CORPO-
RATION TO WILLFULLY VIOLATE ANY  PROVISION  OF  THIS  ARTICLE  SHALL  BE

S. 5847--A                          4

SUBJECT  TO  THE  SAME  CIVIL  PENALTY PROVIDED UNDER THIS ARTICLE FOR A
VIOLATION OF SUCH PROVISION.
  5.   IF  ANY  CONTRACTOR  WILLFULLY  VIOLATES  SECTION  EIGHT  HUNDRED
SIXTY-ONE-C OF THIS ARTICLE AND SUCH VIOLATION RESULTS IN A  FAILURE  BY
THE CONTRACTOR TO PAY UNEMPLOYMENT INSURANCE TAX, WORKERS' COMPENSATION,
OR  CORPORATE  OR  PERSONAL  INCOME  TAX FOR THE MISCLASSIFICATION OF AN
EMPLOYEE, THE CONTRACTOR SHALL BE SUBJECT,  AT  THE  DISCRETION  OF  THE
COMMISSIONER, TO ADDITIONAL CIVIL PENALTIES AS FOLLOWS:
  (A)  FOR  FAILURE  TO  PAY  UNEMPLOYMENT  INSURANCE TAX, THE PENALTIES
IMPOSED BY SECTION FIVE HUNDRED SEVENTY OF THIS CHAPTER,
  (B) FOR FAILURE TO PAY WORKERS' COMPENSATION INSURANCE, THE  PENALTIES
IMPOSED  BY  SECTION  TWENTY-FIVE AND TWO HUNDRED TWENTY OF THE WORKERS'
COMPENSATION LAW, AND
  (C) FOR FAILURE TO PAY CORPORATE OR PERSONAL INCOME TAX, THE PENALTIES
IMPOSED BY SECTIONS SIX HUNDRED EIGHTY-FIVE AND ONE THOUSAND EIGHTY-FIVE
OF THE TAX LAW.
  6. IN ADDITION TO ANY CIVIL PENALTIES IMPOSED UNDER  THIS  ARTICLE,  A
CONTRACTOR  WHO  WILLFULLY VIOLATES SECTION EIGHT HUNDRED SIXTY-ONE-C OF
THIS ARTICLE SHALL BE GUILTY OF A MISDEMEANOR AND UPON CONVICTION, SHALL
BE PUNISHED FOR A FIRST OFFENSE BY IMPRISONMENT FOR NOT MORE THAN THIRTY
DAYS AND FOR A SUBSEQUENT OFFENSE, BY IMPRISONMENT  FOR  NOT  MORE  THAN
SIXTY DAYS.
  7.  ANY  CONTRACTOR WHO HAS BEEN CONVICTED OF A MISDEMEANOR OR AGAINST
WHOM A FINAL  CIVIL  DETERMINATION  HAS  BEEN  RENDERED  FOR  A  WILLFUL
VIOLATION  OF SECTION EIGHT HUNDRED SIXTY-ONE-C OF THIS ARTICLE SHALL BE
INELIGIBLE TO SUBMIT A BID ON OR BE AWARDED ANY PUBLIC CONTRACT WITH THE
STATE, ANY MUNICIPAL CORPORATION, PUBLIC BENEFIT CORPORATION  OR  PUBLIC
BODY  FOR  A PERIOD OF UP TO FIVE YEARS FROM THE DATE OF SUCH CONVICTION
OR FINAL DETERMINATION.
  8. ANY EMPLOYEE AGGRIEVED BY A VIOLATION OF THIS ARTICLE, OR AN ORGAN-
IZATION REPRESENTING AN AGGRIEVED EMPLOYEE, MAY FILE A CIVIL  ACTION  TO
RECOVER  LOST  WAGES,  TREBLE  DAMAGES, ATTORNEY'S FEES AND COSTS WITHIN
THREE YEARS FROM THE DATE OF SUCH VIOLATION.
  9. A PENALTY IMPOSED UNDER THIS SECTION AGAINST A CONSTRUCTION  INDUS-
TRY  EMPLOYER  SHALL  BE  IN EFFECT AGAINST ANY SUCCESSOR CORPORATION OR
BUSINESS ENTITY THAT HAS ONE OR MORE OF THE SAME PRINCIPALS OR  OFFICERS
AS THE EMPLOYER AGAINST WHOM THE PENALTY WAS IMPOSED.
  10.  NOTHING  IN  THIS  SECTION  SHALL LIMIT THE AVAILABILITY OF OTHER
REMEDIES AT LAW OR IN EQUITY FOR A VIOLATION OF THIS ARTICLE.
  S 861-F. ADVISORY COMMITTEE ON EMPLOYMENT CLASSIFICATION. 1. THERE  IS
HEREBY  ESTABLISHED THE ADVISORY COMMITTEE ON EMPLOYMENT CLASSIFICATION.
THE PURPOSE OF SUCH ADVISORY COMMITTEE IS TO DEVELOP RECOMMENDATIONS FOR
A COMPREHENSIVE AND STRATEGIC STATEWIDE APPROACH TO ADDRESSING THE PROB-
LEM OF EMPLOYEE MISCLASSIFICATION 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; THE ATTORNEY GENERAL OR A DESIGNEE; THE COMMISSIONER OF  TAXA-
TION  AND  FINANCE OR A DESIGNEE; THE CHAIR OF THE WORKERS' COMPENSATION
BOARD OR A DESIGNEE; THIRTEEN MEMBERS WHO  SHALL  BE  APPOINTED  BY  THE
GOVERNOR  AND  SHALL  SERVE AT HIS PLEASURE AS FOLLOWS:  THREE REPRESEN-
TATIVES FROM THREE DIFFERENT  BUILDING  TRADE  UNIONS;  THREE  REPRESEN-
TATIVES  OF  THE NEW YORK STATE AMERICAN FEDERATION OF LABOR-CONGRESS OF
INDUSTRIAL ORGANIZATIONS; THREE REPRESENTATIVES OF THE BUSINESS COMMUNI-
TY; ONE REPRESENTATIVE OF RESIDENTIAL DEVELOPERS; ONE REPRESENTATIVE  OF
RESIDENTIAL  CONSTRUCTION  CONTRACTORS; ONE REPRESENTATIVE OF COMMERCIAL

S. 5847--A                          5

DEVELOPERS; AND ONE REPRESENTATIVE OF COMMERCIAL  CONSTRUCTION  CONTRAC-
TORS.
  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. 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) MAKE RECOMMENDATIONS TO ENHANCE MECHANISMS FOR IDENTIFYING EMPLOY-
EE MISCLASSIFICATION WHERE IT DOES OCCUR; AND
  (C) WORK WITH BUSINESS, LABOR AND COMMUNITY GROUPS TO  DEVELOP  EDUCA-
TIONAL  MATERIALS THAT DISTINGUISH THE DIFFERENCE BETWEEN AN INDEPENDENT
CONTRACTOR AND AN EMPLOYEE.
  5. THE ADVISORY COMMITTEE SHALL ISSUE A REPORT ANNUALLY TO THE  GOVER-
NOR  AND  LEGISLATURE  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 IMPLEMENTATION, A REVIEW OF THE PROCESS USED TO ADJUDICATE
MISCLASSIFICATION  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 IN THE STATE.
  6. THE ADVISORY COMMITTEE MAY REQUEST ANY DEPARTMENT, OFFICE, DIVISION
OR  AGENCY OF THE STATE TO PROVIDE DATA AND OTHER INFORMATION, PERSONNEL
OR ASSISTANCE AVAILABLE TO SUCH AGENCY AS THE ADVISORY  COMMITTEE  DEEMS
NECESSARY  TO  DISCHARGE ITS DUTIES UNDER THIS ARTICLE SUBJECT TO CONFI-
DENTIALITY PROVISIONS UNDER LAW. EACH DEPARTMENT,  OFFICE,  DIVISION  OR
AGENCY  OF  THE  STATE  SHALL,  TO THE EXTENT NOT INCONSISTENT WITH LAW,
COOPERATE FULLY WITH THE ADVISORY COMMITTEE AND FURNISH SUCH  ASSISTANCE
ON  AS TIMELY A BASIS AS IS NECESSARY TO ACCOMPLISH THE PURPOSES OF THIS
ARTICLE. THE ADVISORY COMMITTEE MAY CONSULT WITH EXPERTS OR OTHER  KNOW-
LEDGEABLE  INDIVIDUALS  IN  THE PUBLIC OR PRIVATE SECTOR IN CARRYING OUT
ITS PURPOSE AND DUTIES.
  S 861-G. RETALIATION. 1. IT IS A VIOLATION  OF  THIS  ARTICLE  FOR  AN
EMPLOYER  OR ANY AGENT OF AN EMPLOYER, TO RETALIATE THROUGH DISCHARGE OR
IN ANY OTHER MANNER AGAINST ANY PERSON IN THE TERMS  AND  CONDITIONS  OF
HIS OR HER EMPLOYMENT FOR EXERCISING ANY RIGHTS GRANTED UNDER THIS ARTI-
CLE FOR:
  (A)  MAKING  A COMPLAINT TO AN EMPLOYER, CO-WORKER OR TO A PUBLIC BODY
THAT RIGHTS GUARANTEED UNDER THIS ARTICLE HAVE BEEN VIOLATED;
  (B) CAUSING TO BE INSTITUTED ANY PROCEEDING UNDER OR RELATED  TO  THIS
ARTICLE; OR
  (C)  PROVIDING  INFORMATION  TO, OR TESTIFYING BEFORE, ANY PUBLIC BODY
CONDUCTING AN INVESTIGATION, HEARING OR INQUIRY INTO ANY SUCH  VIOLATION
OF A LAW, RULE OR REGULATION BY SUCH EMPLOYER.
  2. ANY ACT OF RETALIATION UNDER THIS SECTION SHALL SUBJECT AN EMPLOYER
TO  THE  CIVIL PENALTIES UNDER SECTION EIGHT HUNDRED SIXTY-ONE-E OF THIS
ARTICLE, OR TO A PRIVATE CAUSE OF ACTION, OR BOTH.
  S 2. Paragraph (b) of subdivision 1 of section 511 of the labor law is
amended by adding a new subparagraph 1-b to read as follows:
  (1-B) AS AN EMPLOYEE IN THE CONSTRUCTION INDUSTRY UNLESS THE  PRESUMP-
TION  OF  EMPLOYMENT  CAN  BE  OVERCOME, AS PROVIDED UNDER SECTION EIGHT
HUNDRED SIXTY-ONE-C OF THIS CHAPTER,

S. 5847--A                          6

  S 3. The opening paragraph of subdivision 4 of section 2 of the  work-
ers' compensation law, as amended by chapter 205 of the laws of 1993, is
amended to read as follows:
  "Employee" means a person engaged in one of the occupations enumerated
in section three or who is in the service of an employer whose principal
business  is  that  of  carrying on or conducting a hazardous employment
upon the premises or at the plant, or in the course  of  his  employment
away  from the plant of his employer; "EMPLOYEE" SHALL ALSO MEAN FOR THE
PURPOSES OF THIS  CHAPTER  ANY  INDIVIDUAL  PERFORMING  SERVICES  FOR  A
CONTRACTOR  WHO  DOES  NOT  OVERCOME  THE  PRESUMPTION  OF EMPLOYMENT AS
PROVIDED UNDER SECTION EIGHT  HUNDRED  SIXTY-ONE-C  OF  THE  LABOR  LAW;
"employee"  shall  also  mean  for  the  purposes  of this chapter civil
defense volunteers who are personnel of volunteer agencies sponsored  or
authorized  by  a  local  office  under regulations of the civil defense
commission, to the extent of the  provisions  of  groups  seventeen  and
nineteen;  "employee"  shall  at the election of a municipal corporation
made pursuant to local law duly enacted also mean a member of an  auxil-
iary  police  organization authorized by local law; and for the purposes
of this chapter only a newspaper carrier under the age of eighteen years
as defined in section thirty-two hundred twenty-eight of  the  education
law,  and  shall  not  include  domestic  servants except as provided in
section three of this chapter, and except where the employer has elected
to bring such employees  under  the  law  by  securing  compensation  in
accordance  with  the  terms  of section fifty of this chapter. The term
"employee" shall not include persons who are  members  of  a  supervised
amateur  athletic activity operated on a non-profit basis, provided that
said members are not also otherwise engaged or employed by  any  person,
firm  or  corporation participating in said athletic activity, nor shall
it include the spouse or minor child of an  employer  who  is  a  farmer
unless  the  services  of such spouse or minor child shall be engaged by
said employer under an express contract of hire nor shall it include  an
executive  officer  of  a corporation who at all times during the period
involved owns all of the issued and outstanding stock of the corporation
and holds all of the offices pursuant to paragraph (e) of section  seven
hundred  fifteen  of the business corporation law or two executive offi-
cers of a corporation who  at  all  times  during  the  period  involved
between  them own all of the issued and outstanding stock of such corpo-
ration and hold all such offices except as provided in  subdivision  six
of  section  fifty-four  of  this  chapter provided, however, that where
there are two executive officers of a corporation each officer must  own
at least one share of stock, nor shall it include a self-employed person
or  a partner of a partnership as defined in section ten of the partner-
ship law who is not covered under a compensation insurance contract or a
certificate of  self-insurance  as  provided  in  subdivision  eight  of
section  fifty-four  of this chapter, nor shall it include farm laborers
except as provided in group fourteen-b of section three of this chapter.
If a farm labor contractor recruits or supplies farm laborers  for  work
on  a farm, such farm laborers shall for the purposes of this chapter be
deemed to be employees of the owner or lessee of such farm.    The  term
"employee"  shall  not  include  baby  sitters as defined in subdivision
three of section one hundred thirty-one and subdivision three of section
one hundred thirty-two of the labor law or minors fourteen years of  age
or  over engaged in casual employment consisting of yard work and house-
hold chores in and about a one family owner-occupied  residence  or  the
premises of a non-profit, non-commercial organization, not involving the
use  of  power-driven  machinery.  The term "employee" shall not include

S. 5847--A                          7

persons engaged by the owner in casual  employment  consisting  of  yard
work,  household chores and making repairs to or painting in and about a
one-family owner-occupied  residence.  The  term  "employee"  shall  not
include the services of a licensed real estate broker or sales associate
if  it be proven that (a) substantially all of the remuneration (whether
or not paid in cash) for the services performed by such broker or  sales
associate  is  directly  related to sales or other output (including the
performance of services) rather than to the number of hours worked;  (b)
the  services  performed  by the broker or sales associate are performed
pursuant to a written contract executed between  such  broker  or  sales
associate  and the person for whom the services are performed within the
past twelve to fifteen months; and (c) the written contract provided for
in paragraph (b) herein was not executed under duress and  contains  the
following provisions:
  S  4.  Paragraph 1 of subsection (a) of section 671 of the tax law, as
amended by chapter 760 of the laws  of  1992,  is  amended  to  read  as
follows:
  (1) Every employer maintaining an office or transacting business with-
in  this  state  and  making  payment  of  any  wages taxable under this
article, INCLUDING AN EMPLOYER AS DEFINED IN SUBDIVISION SIX OF  SECTION
EIGHT  HUNDRED  SIXTY-ONE-B  OF THE LABOR LAW, shall deduct and withhold
from such wages for each payroll period a tax computed in such manner as
to result, so far as practicable, in  withholding  from  the  employee's
wages  during  each  calendar year an amount substantially equivalent to
the tax reasonably estimated to be due under this article resulting from
the inclusion in the employee's New York adjusted gross  income  or  New
York  source income of his wages received during such calendar year. The
method of determining the amount to be withheld shall be  prescribed  by
regulations  of  the commissioner, with due regard to the New York with-
holding exemptions of the employee and the sum of any credits  allowable
against his tax.
  S  5. 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  AND  THE  DEPARTMENT MAY HIRE AS MANY INVESTIGATORS AND
OTHER PERSONNEL AS MAY BE NECESSARY TO CARRY OUT SUCH DUTIES. ANY MONEYS
IN THE FUND AT THE END OF THE FISCAL YEAR IN EXCESS OF ANY MONEYS NECES-
SARY FOR THE DEPARTMENT 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 UNDER ARTICLE TWENTY-FIVE-B OF THE LABOR LAW.
  S  6.  This  act  shall take effect on the sixtieth day after it shall
have become a law.

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5847--B

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 11, 2009
                               ___________

Introduced   by  Sens.  ONORATO,  FOLEY,  BRESLIN,  MONSERRATE,  SAVINO,
  STACHOWSKI -- read twice and ordered printed, and when printed  to  be
  committed to the Committee on Rules -- recommitted to the Committee on
  Labor   in  accordance  with  Senate  Rule  6,  sec.  8  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee  --  reported  favorably  from  said  committee  and
  committed  to  the  Committee  on  Codes -- committee discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee

AN  ACT  to  amend  the labor law, in relation to enacting the "New York
  state construction industry fair play act"; and to amend the  workers'
  compensation  law,  the tax law and the state finance law, in relation
  to creating the construction industry classification fund

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The  labor law is amended by adding a new article 25-B to
read as follows:
                              ARTICLE 25-B
         THE NEW YORK STATE CONSTRUCTION INDUSTRY FAIR PLAY ACT
SECTION 861.   SHORT TITLE.
        861-A. LEGISLATIVE FINDINGS AND INTENT.
        861-B. DEFINITIONS.
        861-C. PRESUMPTION OF EMPLOYMENT IN THE CONSTRUCTION INDUSTRY.
        861-D. NOTICE TO PERSONS RECEIVING REMUNERATION FROM CONTRACTORS
                 AND SUBCONTRACTORS.
        861-E. VIOLATIONS AND PENALTIES.
        861-F. RETALIATION.
  S 861. SHORT TITLE.  THIS ARTICLE SHALL BE KNOWN AND MAY BE  CITED  AS
THE "NEW YORK STATE CONSTRUCTION INDUSTRY FAIR PLAY ACT".
  S 861-A. LEGISLATIVE FINDINGS AND INTENT. THE LEGISLATURE HEREBY FINDS
AND DECLARES THAT NEW YORK STATE'S CONSTRUCTION INDUSTRY IS EXPERIENCING

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11756-10-0
              

S. 5847--B                          2

DANGEROUS  LEVELS  OF  EMPLOYEE  MISCLASSIFICATION  FRAUD.  UNSCRUPULOUS
EMPLOYERS ARE INTENTIONALLY REPORTING EMPLOYEES AS INDEPENDENT  CONTRAC-
TORS  TO STATE AND FEDERAL AUTHORITIES OR WORKERS' COMPENSATION CARRIERS
IN RECORD NUMBERS. IN ADDITION, THERE HAS BEEN AN EXPLOSION OF EMPLOYERS
WHO OPERATE IN THE UNDERGROUND ECONOMY AND FAIL TO REPORT ALL OR A SIZA-
BLE 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  MUCH  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 CONSTRUCTING, RECONSTRUCTING, ALTERING,  MAIN-
TAINING,  MOVING, REHABILITATING, REPAIRING, RENOVATING OR DEMOLITION OF
ANY BUILDING, STRUCTURE, OR IMPROVEMENT, OR RELATING TO  THE  EXCAVATION
OF OR OTHER DEVELOPMENT OR IMPROVEMENT TO LAND.
  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 AN INDIVIDUAL CLASSI-
FIED AS AN EMPLOYEE UNDER THIS ARTICLE.
  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

S. 5847--B                          3

  (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 ACT OF  SECURING  WORKERS'  COMPENSATION  INSURANCE
WITH  A CARRIER AS A SOLE PROPRIETOR OR PARTNERSHIP SHALL NOT BE CONSID-
ERED IN MAKING A DETERMINATION UNDER THIS SECTION.
  S 861-D. NOTICE TO PERSONS RECEIVING REMUNERATION FROM CONTRACTORS AND
SUBCONTRACTORS.   1. EVERY CONTRACTOR SHALL  POST  IN  A  PROMINENT  AND
ACCESSIBLE PLACE ON THE SITE WHERE THE CONSTRUCTION IS PERFORMED A LEGI-
BLE  STATEMENT, PROVIDED BY THE COMMISSIONER, THAT DESCRIBES THE RESPON-
SIBILITY OF INDEPENDENT CONTRACTORS TO PAY TAXES REQUIRED BY  STATE  AND
FEDERAL LAW, THE RIGHTS OF EMPLOYEES TO WORKERS' COMPENSATION, UNEMPLOY-
MENT  BENEFITS, MINIMUM WAGE, OVERTIME AND OTHER FEDERAL AND STATE WORK-
PLACE PROTECTIONS, AND  THE  PROTECTIONS  AGAINST  RETALIATION  AND  THE
PENALTIES  IN  THIS ARTICLE IF THE CONTRACTOR FAILS TO PROPERLY CLASSIFY
AN INDIVIDUAL AS AN EMPLOYEE. THIS NOTICE  SHALL  ALSO  CONTAIN  CONTACT
INFORMATION  FOR  INDIVIDUALS  TO  FILE  COMPLAINTS  OR INQUIRE WITH THE
COMMISSIONER ABOUT EMPLOYMENT CLASSIFICATION  STATUS.  THIS  INFORMATION
SHALL  BE PROVIDED IN SPANISH OR OTHER LANGUAGES REQUIRED BY THE COMMIS-
SIONER. THE POSTED STATEMENT SHALL BE CONSTRUCTED OF  MATERIALS  CAPABLE
OF WITHSTANDING ADVERSE WEATHER CONDITIONS.
  2.  WITHIN  THIRTY  DAYS  OF  THE  EFFECTIVE DATE OF THIS ARTICLE, THE
COMMISSIONER SHALL CREATE THE NOTICE DESCRIBED  IN  SUBDIVISION  ONE  OF
THIS  SECTION  AND POST THE NOTICE ON THE DEPARTMENT'S WEBSITE FOR DOWN-
LOADING BY CONTRACTORS.
  3. CONTRACTORS WHO VIOLATE THIS SECTION SHALL BE SUBJECT  TO  A  CIVIL
PENALTY OF TWO THOUSAND DOLLARS FOR A FIRST VIOLATION, AND FIVE THOUSAND
DOLLARS FOR A SUBSEQUENT VIOLATION.
  S 861-E. VIOLATION AND PENALTIES. 1. ANY CONTRACTOR WHO FAILS TO PROP-
ERLY  CLASSIFY  AN  INDIVIDUAL  AS AN EMPLOYEE AS PROVIDED UNDER SECTION
EIGHT HUNDRED SIXTY-ONE-C OF THIS ARTICLE SHALL BE SUBJECT TO THE  CIVIL
AND CRIMINAL PENALTIES PROVIDED UNDER THIS SECTION.
  2.  FOR  THE  PURPOSES  OF THIS SECTION, THE TERM "WILLFULLY VIOLATES"
MEANS A CONTRACTOR KNEW OR SHOULD HAVE KNOWN THAT HIS OR HER CONDUCT WAS
PROHIBITED BY THIS SECTION.
  3. ANY CONTRACTOR WHO WILLFULLY VIOLATES SECTION EIGHT HUNDRED  SIXTY-
ONE-C OF THIS ARTICLE SHALL BE SUBJECT TO A CIVIL PENALTY OF UP TO TWEN-
TY-FIVE  HUNDRED  DOLLARS FOR THE FIRST VIOLATION PER EMPLOYEE, AND TO A
CIVIL PENALTY OF  UP  TO  FIVE  THOUSAND  DOLLARS  FOR  EACH  SUBSEQUENT
VIOLATION PER EMPLOYEE.
  4. IF THE CONTRACTOR IS A CORPORATION, ANY OFFICER OF SUCH CORPORATION
OR  SHAREHOLDER  WHO  OWNS  OR  CONTROLS  AT  LEAST  TEN  PERCENT OF THE
OUTSTANDING STOCK OF SUCH CORPORATION WHO KNOWINGLY PERMITS  THE  CORPO-
RATION  TO  WILLFULLY  VIOLATE  ANY  PROVISION  OF THIS ARTICLE SHALL BE
SUBJECT TO THE SAME CIVIL PENALTY PROVIDED  UNDER  THIS  ARTICLE  FOR  A
VIOLATION OF SUCH PROVISION.
  5.   IF  ANY  CONTRACTOR  WILLFULLY  VIOLATES  SECTION  EIGHT  HUNDRED
SIXTY-ONE-C OF THIS ARTICLE AND SUCH VIOLATION RESULTS IN A  FAILURE  BY
THE CONTRACTOR TO PAY UNEMPLOYMENT INSURANCE TAX, WORKERS' COMPENSATION,
OR  CORPORATE  OR  PERSONAL  INCOME  TAX FOR THE MISCLASSIFICATION OF AN
EMPLOYEE, THE CONTRACTOR SHALL BE SUBJECT,  AT  THE  DISCRETION  OF  THE
COMMISSIONER, TO ADDITIONAL CIVIL PENALTIES AS FOLLOWS:

S. 5847--B                          4

  (A)  FOR  FAILURE  TO  PAY  UNEMPLOYMENT  INSURANCE TAX, THE PENALTIES
IMPOSED BY SECTION FIVE HUNDRED SEVENTY OF THIS CHAPTER,
  (B)  FOR FAILURE TO PAY WORKERS' COMPENSATION INSURANCE, THE PENALTIES
IMPOSED BY SECTION TWENTY-FIVE AND TWO HUNDRED TWENTY  OF  THE  WORKERS'
COMPENSATION LAW, AND
  (C) FOR FAILURE TO PAY CORPORATE OR PERSONAL INCOME TAX, THE PENALTIES
IMPOSED BY SECTIONS SIX HUNDRED EIGHTY-FIVE AND ONE THOUSAND EIGHTY-FIVE
OF THE TAX LAW.
  6.  IN  ADDITION  TO ANY CIVIL PENALTIES IMPOSED UNDER THIS ARTICLE, A
CONTRACTOR WHO WILLFULLY VIOLATES SECTION EIGHT HUNDRED  SIXTY-ONE-C  OF
THIS ARTICLE SHALL BE GUILTY OF A MISDEMEANOR AND UPON CONVICTION, SHALL
BE PUNISHED FOR A FIRST OFFENSE BY IMPRISONMENT FOR NOT MORE THAN THIRTY
DAYS  AND  FOR  A  SUBSEQUENT OFFENSE, BY IMPRISONMENT FOR NOT MORE THAN
SIXTY DAYS.
  7. ANY CONTRACTOR WHO HAS BEEN CONVICTED OF A MISDEMEANOR  OR  AGAINST
WHOM  A  FINAL  CIVIL  DETERMINATION  HAS  BEEN  RENDERED  FOR A WILLFUL
VIOLATION OF SECTION EIGHT HUNDRED SIXTY-ONE-C OF THIS ARTICLE SHALL  BE
INELIGIBLE TO SUBMIT A BID ON OR BE AWARDED ANY PUBLIC CONTRACT WITH THE
STATE,  ANY  MUNICIPAL CORPORATION, PUBLIC BENEFIT CORPORATION OR PUBLIC
BODY FOR A PERIOD OF UP TO FIVE YEARS FROM THE DATE OF  SUCH  CONVICTION
OR FINAL DETERMINATION.
  8. ANY EMPLOYEE AGGRIEVED BY A VIOLATION OF THIS ARTICLE, OR AN ORGAN-
IZATION  REPRESENTING  AN AGGRIEVED EMPLOYEE, MAY FILE A CIVIL ACTION TO
RECOVER LOST WAGES, TREBLE DAMAGES, ATTORNEY'S  FEES  AND  COSTS  WITHIN
THREE YEARS FROM THE DATE OF SUCH VIOLATION.
  9.  A PENALTY IMPOSED UNDER THIS SECTION AGAINST A CONSTRUCTION INDUS-
TRY EMPLOYER SHALL BE IN EFFECT AGAINST  ANY  SUCCESSOR  CORPORATION  OR
BUSINESS  ENTITY THAT HAS ONE OR MORE OF THE SAME PRINCIPALS OR OFFICERS
AS THE EMPLOYER AGAINST WHOM THE PENALTY WAS IMPOSED.
  10. NOTHING IN THIS SECTION SHALL  LIMIT  THE  AVAILABILITY  OF  OTHER
REMEDIES AT LAW OR IN EQUITY FOR A VIOLATION OF THIS ARTICLE.
  S  861-F.  RETALIATION.  1.  IT  IS A VIOLATION OF THIS ARTICLE FOR AN
EMPLOYER OR ANY AGENT OF AN EMPLOYER, TO RETALIATE THROUGH DISCHARGE  OR
IN  ANY  OTHER  MANNER AGAINST ANY PERSON IN THE TERMS AND CONDITIONS OF
HIS OR HER EMPLOYMENT FOR EXERCISING ANY RIGHTS GRANTED UNDER THIS ARTI-
CLE FOR:
  (A) MAKING A COMPLAINT TO AN EMPLOYER, CO-WORKER OR TO A  PUBLIC  BODY
THAT RIGHTS GUARANTEED UNDER THIS ARTICLE HAVE BEEN VIOLATED;
  (B)  CAUSING  TO BE INSTITUTED ANY PROCEEDING UNDER OR RELATED TO THIS
ARTICLE; OR
  (C) PROVIDING INFORMATION TO, OR TESTIFYING BEFORE,  ANY  PUBLIC  BODY
CONDUCTING  AN INVESTIGATION, HEARING OR INQUIRY INTO ANY SUCH VIOLATION
OF A LAW, RULE OR REGULATION BY SUCH EMPLOYER.
  2. ANY ACT OF RETALIATION UNDER THIS SECTION SHALL SUBJECT AN EMPLOYER
TO THE CIVIL PENALTIES UNDER SECTION EIGHT HUNDRED SIXTY-ONE-E  OF  THIS
ARTICLE, OR TO A PRIVATE CAUSE OF ACTION, OR BOTH.
  S 2. Paragraph (b) of subdivision 1 of section 511 of the labor law is
amended by adding a new subparagraph 1-b to read as follows:
  (1-B)  AS AN EMPLOYEE IN THE CONSTRUCTION INDUSTRY UNLESS THE PRESUMP-
TION OF EMPLOYMENT CAN BE OVERCOME,  AS  PROVIDED  UNDER  SECTION  EIGHT
HUNDRED SIXTY-ONE-C OF THIS CHAPTER,
  S  3. The opening paragraph of subdivision 4 of section 2 of the work-
ers' compensation law, as amended by chapter 205 of the laws of 1993, is
amended to read as follows:
  "Employee" means a person engaged in one of the occupations enumerated
in section three or who is in the service of an employer whose principal

S. 5847--B                          5

business is that of carrying on or  conducting  a  hazardous  employment
upon  the  premises  or at the plant, or in the course of his employment
away from the plant of his employer; "EMPLOYEE" SHALL ALSO MEAN FOR  THE
PURPOSES  OF  THIS  CHAPTER  ANY  INDIVIDUAL  PERFORMING  SERVICES FOR A
CONTRACTOR WHO DOES  NOT  OVERCOME  THE  PRESUMPTION  OF  EMPLOYMENT  AS
PROVIDED  UNDER  SECTION  EIGHT  HUNDRED  SIXTY-ONE-C  OF THE LABOR LAW;
"employee" shall also mean  for  the  purposes  of  this  chapter  civil
defense  volunteers who are personnel of volunteer agencies sponsored or
authorized by a local office under  regulations  of  the  civil  defense
commission,  to  the  extent  of  the provisions of groups seventeen and
nineteen; "employee" shall at the election of  a  municipal  corporation
made  pursuant to local law duly enacted also mean a member of an auxil-
iary police organization authorized by local law; and for  the  purposes
of this chapter only a newspaper carrier under the age of eighteen years
as  defined  in section thirty-two hundred twenty-eight of the education
law, and shall not include  domestic  servants  except  as  provided  in
section three of this chapter, and except where the employer has elected
to  bring  such  employees  under  the  law  by securing compensation in
accordance with the terms of section fifty of  this  chapter.  The  term
"employee"  shall  not  include  persons who are members of a supervised
amateur athletic activity operated on a non-profit basis, provided  that
said  members  are not also otherwise engaged or employed by any person,
firm or corporation participating in said athletic activity,  nor  shall
it  include  the  spouse  or  minor child of an employer who is a farmer
unless the services of such spouse or minor child shall  be  engaged  by
said  employer under an express contract of hire nor shall it include an
executive officer of a corporation who at all times  during  the  period
involved owns all of the issued and outstanding stock of the corporation
and  holds all of the offices pursuant to paragraph (e) of section seven
hundred fifteen of the business corporation law or two  executive  offi-
cers  of  a  corporation  who  at  all  times during the period involved
between them own all of the issued and outstanding stock of such  corpo-
ration  and  hold all such offices except as provided in subdivision six
of section fifty-four of this  chapter  provided,  however,  that  where
there  are two executive officers of a corporation each officer must own
at least one share of stock, nor shall it include a self-employed person
or a partner of a partnership as defined in section ten of the  partner-
ship law who is not covered under a compensation insurance contract or a
certificate  of  self-insurance  as  provided  in  subdivision  eight of
section fifty-four of this chapter, nor shall it include  farm  laborers
except as provided in group fourteen-b of section three of this chapter.
If  a  farm labor contractor recruits or supplies farm laborers for work
on a farm, such farm laborers shall for the purposes of this chapter  be
deemed  to  be  employees of the owner or lessee of such farm.  The term
"employee" shall not include baby  sitters  as  defined  in  subdivision
three of section one hundred thirty-one and subdivision three of section
one  hundred thirty-two of the labor law or minors fourteen years of age
or over engaged in casual employment consisting of yard work and  house-
hold  chores  in  and about a one family owner-occupied residence or the
premises of a non-profit, non-commercial organization, not involving the
use of power-driven machinery. The term  "employee"  shall  not  include
persons  engaged  by  the  owner in casual employment consisting of yard
work, household chores and making repairs to or painting in and about  a
one-family  owner-occupied  residence.  The  term  "employee"  shall not
include the services of a licensed real estate broker or sales associate
if it be proven that (a) substantially all of the remuneration  (whether

S. 5847--B                          6

or  not paid in cash) for the services performed by such broker or sales
associate is directly related to sales or other  output  (including  the
performance  of services) rather than to the number of hours worked; (b)
the  services  performed  by the broker or sales associate are performed
pursuant to a written contract executed between  such  broker  or  sales
associate  and the person for whom the services are performed within the
past twelve to fifteen months; and (c) the written contract provided for
in paragraph (b) herein was not executed under duress and  contains  the
following provisions:
  S  4.  Paragraph 1 of subsection (a) of section 671 of the tax law, as
amended by chapter 760 of the laws  of  1992,  is  amended  to  read  as
follows:
  (1) Every employer maintaining an office or transacting business with-
in  this  state  and  making  payment  of  any  wages taxable under this
article, INCLUDING AN EMPLOYER AS DEFINED IN SUBDIVISION SIX OF  SECTION
EIGHT  HUNDRED  SIXTY-ONE-B  OF THE LABOR LAW, shall deduct and withhold
from such wages for each payroll period a tax computed in such manner as
to result, so far as practicable, in  withholding  from  the  employee's
wages  during  each  calendar year an amount substantially equivalent to
the tax reasonably estimated to be due under this article resulting from
the inclusion in the employee's New York adjusted gross  income  or  New
York  source income of his wages received during such calendar year. The
method of determining the amount to be withheld shall be  prescribed  by
regulations  of  the commissioner, with due regard to the New York with-
holding exemptions of the employee and the sum of any credits  allowable
against his tax.
  S  5. 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  AND  THE  DEPARTMENT MAY HIRE AS MANY INVESTIGATORS AND
OTHER PERSONNEL AS MAY BE NECESSARY TO CARRY OUT SUCH DUTIES. ANY MONEYS
IN THE FUND AT THE END OF THE FISCAL YEAR IN EXCESS OF ANY MONEYS NECES-
SARY FOR THE DEPARTMENT 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 UNDER ARTICLE TWENTY-FIVE-B OF THE LABOR LAW.
  S  6.  This  act  shall take effect on the sixtieth day after it shall
have become a law.

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5847--C

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 11, 2009
                               ___________

Introduced  by  Sens.  ONORATO, FOLEY, BRESLIN, KRUEGER, LARKIN, SAVINO,
  SCHNEIDERMAN, STACHOWSKI -- read twice and ordered printed,  and  when
  printed  to  be  committed to the Committee on Rules -- recommitted to
  the Committee on Labor in accordance with Senate Rule  6,  sec.  8  --
  committee  discharged,  bill amended, ordered reprinted as amended and
  recommitted to said committee -- reported favorably from said  commit-
  tee  and  committed to the Committee on Codes -- committee discharged,
  bill amended, ordered reprinted as amended  and  recommitted  to  said
  committee  --  reported favorably from said committee and committed to
  the Committee  on  Finance  --  committee  discharged,  bill  amended,
  ordered reprinted as amended and recommitted to said committee

AN  ACT  to  amend  the labor law, in relation to enacting the "New York
  state construction industry fair play act"; and to amend the  workers'
  compensation law, in relation to the definition of employee

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The labor law is amended by adding a new  article  25-B  to
read as follows:
                               ARTICLE 25-B
         THE NEW YORK STATE CONSTRUCTION INDUSTRY FAIR PLAY ACT
SECTION 861.   SHORT TITLE.
        861-A. LEGISLATIVE FINDINGS AND INTENT.
        861-B. DEFINITIONS.
        861-C. PRESUMPTION OF EMPLOYMENT IN THE CONSTRUCTION INDUSTRY.
        861-D. NOTICE TO PERSONS RECEIVING REMUNERATION FROM CONTRACTORS
                 AND SUBCONTRACTORS.
        861-E. VIOLATIONS AND PENALTIES.
        861-F. RETALIATION.
  S  861.  SHORT  TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
"THE NEW YORK STATE CONSTRUCTION INDUSTRY FAIR PLAY ACT".

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11756-18-0

              

S. 5847--C                          2

  S 861-A. LEGISLATIVE FINDINGS AND INTENT. THE LEGISLATURE HEREBY FINDS
AND DECLARES THAT NEW YORK STATE'S CONSTRUCTION INDUSTRY IS EXPERIENCING
DANGEROUS LEVELS OF  EMPLOYEE  MISCLASSIFICATION  FRAUD.    UNSCRUPULOUS
EMPLOYERS  ARE INTENTIONALLY REPORTING EMPLOYEES AS INDEPENDENT CONTRAC-
TORS  TO STATE AND FEDERAL AUTHORITIES OR WORKERS' COMPENSATION CARRIERS
IN RECORD NUMBERS. IN ADDITION, THERE HAS BEEN AN EXPLOSION OF EMPLOYERS
WHO OPERATE IN THE UNDERGROUND ECONOMY AND FAIL TO REPORT ALL OR A SIZA-
BLE 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.
  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 CONSTRUCTING, RECONSTRUCTING, ALTERING, MAIN-
TAINING, MOVING, REHABILITATING, REPAIRING, RENOVATING OR DEMOLITION  OF
ANY  BUILDING,  STRUCTURE, OR IMPROVEMENT, OR RELATING TO THE EXCAVATION
OF OR OTHER DEVELOPMENT OR IMPROVEMENT TO LAND.
  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  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.
  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 THE PERSON IS A SEPARATE BUSINESS ENTITY UNDER SUBDI-
VISION TWO OF THIS SECTION OR ALL OF THE FOLLOWING CRITERIA ARE MET,  IN
WHICH CASE THE PERSON SHALL BE AN INDEPENDENT CONTRACTOR:
  (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 USUAL COURSE OF BUSINESS
FOR WHICH THE SERVICE IS PERFORMED; AND
  (C) THE INDIVIDUAL IS CUSTOMARILY ENGAGED IN AN  INDEPENDENTLY  ESTAB-
LISHED TRADE, OCCUPATION, PROFESSION, OR BUSINESS THAT IS SIMILAR TO THE
SERVICE AT ISSUE.
  2. A SOLE PROPRIETOR OR PARTNERSHIP MAY BE CONSIDERED A SEPARATE BUSI-
NESS  ENTITY FROM THE CONTRACTOR WHERE ALL OF THE FOLLOWING CRITERIA ARE
MET:
  (A) THE SOLE PROPRIETOR OR PARTNERSHIP IS PERFORMING THE SERVICE  FREE
FROM THE DIRECTION OR CONTROL OVER THE MEANS AND MANNER OF PROVIDING THE
SERVICE,  SUBJECT  ONLY  TO  THE  RIGHT  OF  THE CONTRACTOR FOR WHOM THE
SERVICE IS PROVIDED TO SPECIFY THE DESIRED RESULT;

S. 5847--C                          3

  (B) THE SOLE PROPRIETOR OR PARTNERSHIP IS NOT SUBJECT TO  CANCELLATION
OR DESTRUCTION UPON SEVERANCE OF THE RELATIONSHIP WITH THE CONTRACTOR;
  (C) THE SOLE PROPRIETOR OR PARTNERSHIP HAS A SUBSTANTIAL INVESTMENT OF
CAPITAL  IN THE SOLE PROPRIETORSHIP OR PARTNERSHIP BEYOND ORDINARY TOOLS
AND EQUIPMENT AND A PERSONAL VEHICLE;
  (D) THE SOLE PROPRIETOR OR PARTNERSHIP  OWNS  THE  CAPITAL  GOODS  AND
GAINS  THE  PROFITS  AND  BEARS THE LOSSES OF THE SOLE PROPRIETORSHIP OR
PARTNERSHIP;
  (E) THE SOLE PROPRIETOR OR PARTNERSHIP MAKES ITS SERVICES AVAILABLE TO
THE GENERAL PUBLIC OR THE BUSINESS COMMUNITY ON A CONTINUING BASIS;
  (F) THE SOLE PROPRIETOR OR PARTNERSHIP INCLUDES SERVICES RENDERED ON A
FEDERAL INCOME TAX SCHEDULE AS AN INDEPENDENT BUSINESS OR PROFESSION;
  (G) THE SOLE PROPRIETOR  OR  PARTNERSHIP  PERFORMS  SERVICES  FOR  THE
CONTRACTOR UNDER THE SOLE PROPRIETORSHIP'S OR PARTNERSHIP'S NAME;
  (H)  WHEN THE SERVICES BEING PROVIDED REQUIRE A LICENSE OR PERMIT, THE
SOLE PROPRIETOR OR PARTNERSHIP OBTAINS  AND  PAYS  FOR  THE  LICENSE  OR
PERMIT IN THE SOLE PROPRIETORSHIP'S OR PARTNERSHIP'S NAME;
  (I)  THE SOLE PROPRIETOR OR PARTNERSHIP FURNISHES THE TOOLS AND EQUIP-
MENT NECESSARY TO PROVIDE THE SERVICE;
  (J) IF NECESSARY, THE SOLE PROPRIETOR OR  PARTNERSHIP  HIRES  ITS  OWN
EMPLOYEES  WITHOUT  CONTRACTOR  APPROVAL,  PAYS  THE  EMPLOYEES  WITHOUT
REIMBURSEMENT FROM THE CONTRACTOR AND REPORTS THE EMPLOYEES'  INCOME  TO
THE INTERNAL REVENUE SERVICE;
  (K) THE CONTRACTOR DOES NOT REPRESENT THE SOLE PROPRIETORSHIP OR PART-
NERSHIP AS AN EMPLOYEE OF THE CONTRACTOR TO ITS CUSTOMERS; AND
  (L)  THE SOLE PROPRIETOR OR PARTNERSHIP HAS THE RIGHT TO PERFORM SIMI-
LAR SERVICES FOR OTHERS ON WHATEVER BASIS AND WHENEVER IT CHOOSES.
  3. 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.
  4.  AN  INDIVIDUAL'S  ACT  OF SECURING WORKERS' COMPENSATION INSURANCE
WITH A CARRIER AS A SOLE PROPRIETOR, PARTNERSHIP OR OTHERWISE SHALL  NOT
BE BINDING ON ANY DETERMINATION UNDER THIS SECTION.
  S 861-D. NOTICE TO PERSONS RECEIVING REMUNERATION FROM CONTRACTORS AND
SUBCONTRACTORS. 1. EVERY CONTRACTOR SHALL POST IN A PROMINENT AND ACCES-
SIBLE  PLACE  ON  THE SITE WHERE THE CONSTRUCTION IS PERFORMED A LEGIBLE
STATEMENT, PROVIDED BY THE COMMISSIONER, THAT DESCRIBES THE RESPONSIBIL-
ITY OF INDEPENDENT CONTRACTORS TO PAY TAXES REQUIRED BY STATE AND FEDER-
AL LAW, THE RIGHTS OF EMPLOYEES TO WORKERS'  COMPENSATION,  UNEMPLOYMENT
BENEFITS,  MINIMUM  WAGE, OVERTIME AND OTHER FEDERAL AND STATE WORKPLACE
PROTECTIONS, AND THE PROTECTIONS AGAINST RETALIATION AND  THE  PENALTIES
IN THIS ARTICLE IF THE CONTRACTOR FAILS TO PROPERLY CLASSIFY AN INDIVID-
UAL  AS  AN EMPLOYEE. THIS NOTICE SHALL ALSO CONTAIN CONTACT INFORMATION
FOR INDIVIDUALS TO FILE COMPLAINTS  OR  INQUIRE  WITH  THE  COMMISSIONER
ABOUT  EMPLOYMENT  CLASSIFICATION  STATUS.  THIS  INFORMATION  SHALL  BE
PROVIDED IN ENGLISH, SPANISH OR OTHER LANGUAGES REQUIRED BY THE  COMMIS-
SIONER.  THE  POSTED STATEMENT SHALL BE CONSTRUCTED OF MATERIALS CAPABLE
OF WITHSTANDING ADVERSE WEATHER CONDITIONS.
  2. WITHIN THIRTY DAYS OF THE  EFFECTIVE  DATE  OF  THIS  ARTICLE,  THE
COMMISSIONER  SHALL  CREATE  THE  NOTICE DESCRIBED IN SUBDIVISION ONE OF
THIS SECTION AND POST THE NOTICE ON THE DEPARTMENT'S WEBSITE  FOR  DOWN-
LOADING BY CONTRACTORS.
  3.  CONTRACTORS  WHO  VIOLATE THIS SECTION SHALL BE SUBJECT TO A CIVIL
PENALTY OF  UP  TO  ONE  THOUSAND  FIVE  HUNDRED  DOLLARS  FOR  A  FIRST

S. 5847--C                          4

VIOLATION,  AND  UP  TO FIVE THOUSAND DOLLARS FOR A SUBSEQUENT VIOLATION
WITHIN A FIVE YEAR PERIOD.
  S  861-E.  VIOLATIONS  AND  PENALTIES.  1. ANY CONTRACTOR WHO FAILS TO
PROPERLY CLASSIFY AN INDIVIDUAL AS AN EMPLOYEE AS PROVIDED UNDER SECTION
EIGHT HUNDRED SIXTY-ONE-C OF THIS ARTICLE SHALL BE SUBJECT TO THE  CIVIL
AND CRIMINAL PENALTIES PROVIDED UNDER THIS SECTION.
  (A) PRIOR TO THE COMMISSIONER IMPOSING A CIVIL PENALTY FOR A VIOLATION
ARISING  UNDER  THE WORKERS' COMPENSATION LAW, THE CHAIR OF THE WORKERS'
COMPENSATION BOARD MUST HAVE ISSUED AN ORDER FINDING SUCH A VIOLATION TO
HAVE OCCURRED. THE WORKERS' COMPENSATION BOARD  SHALL  REFER  ANY  ORDER
RELATING  TO  THE  MISCLASSIFICATION OF AN EMPLOYEE, THE INTENTIONAL AND
MATERIAL UNDERPAYMENT OR CONCEALMENT  OF  PAYROLL,  OR  THE  FAILURE  TO
SECURE WORKERS' COMPENSATION IN THE CONSTRUCTION INDUSTRY TO THE DEPART-
MENT NO LATER THAN SEVEN DAYS AFTER THE ISSUANCE OF THE ORDER.
  (B)  PRIOR TO THE COMMISSIONER IMPOSING A CIVIL PENALTY FOR FAILURE TO
PAY BUSINESS, CORPORATE OR PERSONAL INCOME TAX, THE COMMISSIONER OF  THE
DEPARTMENT  OF  TAXATION AND FINANCE MUST HAVE ISSUED AN ORDER FINDING A
VIOLATION UNDER PART FIVE OF ARTICLE TWENTY-TWO OR ARTICLE  TWENTY-SEVEN
OF  THE TAX LAW. THE DEPARTMENT OF TAXATION AND FINANCE SHALL REFER SUCH
ORDER TO THE COMMISSIONER NO LATER THAN SEVEN DAYS AFTER THE ISSUANCE OF
THE ORDER.
  (C) UPON THE ISSUANCE OF AN ORDER BY THE COMMISSIONER FOR A  VIOLATION
AND  PENALTIES UNDER THIS ARTICLE, THE COMMISSIONER SHALL PROVIDE A COPY
OF THE ORDER TO THE CHAIR OF THE WORKERS'  COMPENSATION  BOARD  AND  THE
COMMISSIONER  OF TAXATION AND FINANCE NO LATER THAN SEVEN DAYS AFTER THE
ISSUANCE OF THE ORDER.
  2. FOR THE PURPOSES OF THIS SECTION,  THE  TERM  "WILLFULLY  VIOLATES"
MEANS A CONTRACTOR KNEW OR SHOULD HAVE KNOWN THAT HIS OR HER CONDUCT WAS
PROHIBITED BY THIS SECTION.
  3.  ANY CONTRACTOR WHO WILLFULLY VIOLATES SECTION EIGHT HUNDRED SIXTY-
ONE-C OF THIS ARTICLE SHALL BE SUBJECT TO A CIVIL PENALTY OF UP TO TWEN-
TY-FIVE HUNDRED  DOLLARS  FOR  THE  FIRST  VIOLATION  PER  MISCLASSIFIED
EMPLOYEE  AND TO A CIVIL PENALTY OF UP TO FIVE THOUSAND DOLLARS FOR EACH
SUBSEQUENT VIOLATION PER MISCLASSIFIED EMPLOYEE WITHIN A FIVE YEAR PERI-
OD.
  4. IN ADDITION TO CIVIL PENALTIES, THE CRIMINAL PENALTIES IMPOSED ON A
CONTRACTOR WHO WILLFULLY VIOLATES THE PROVISIONS OF THIS  ARTICLE  SHALL
BE  A  MISDEMEANOR  AND  UPON  CONVICTION  SHALL BE PUNISHED FOR A FIRST
OFFENSE BY IMPRISONMENT FOR NOT MORE THAN THIRTY DAYS OR A FINE  NOT  TO
EXCEED  TWENTY-FIVE  THOUSAND  DOLLARS  AND  FOR A SUBSEQUENT OFFENSE BY
IMPRISONMENT FOR NOT MORE THAN SIXTY DAYS OR A FINE NOT TO EXCEED  FIFTY
THOUSAND DOLLARS.
  5. IF THE CONTRACTOR IS A CORPORATION, ANY OFFICER OF SUCH CORPORATION
OR  SHAREHOLDER  WHO  OWNS  OR  CONTROLS  AT  LEAST  TEN  PERCENT OF THE
OUTSTANDING STOCK OF SUCH CORPORATION WHO KNOWINGLY PERMITS  THE  CORPO-
RATION TO WILLFULLY VIOLATE THE PROVISIONS OF THIS ARTICLE SHALL ALSO BE
IN VIOLATION OF THIS ARTICLE AND THE CIVIL AND CRIMINAL PENALTIES HEREIN
SHALL ATTACH TO SUCH OFFICER UPON CONVICTION.
  6. ANY CONTRACTOR THAT WILLFULLY VIOLATES THE PROVISIONS OF THIS ARTI-
CLE  AND  SUCH VIOLATION RESULTS IN A FAILURE TO PAY ANY OTHER STATUTORY
PAYMENT OR COVERAGE OBLIGATIONS, INCLUDING BUT NOT LIMITED TO, UNEMPLOY-
MENT INSURANCE, WORKERS' COMPENSATION INSURANCE, OR BUSINESS,  CORPORATE
OR  PERSONAL  INCOME  TAX  SHALL  BE  SUBJECT,  AT THE DISCRETION OF THE
COMMISSIONER, TO ADDITIONAL CIVIL PENALTIES AS FOLLOWS:
  (A) FOR FAILURE TO  PAY  UNEMPLOYMENT  INSURANCE  TAX,  THE  PENALTIES
IMPOSED BY SECTION FIVE HUNDRED SEVENTY OF THIS CHAPTER.

S. 5847--C                          5

  (B)  FOR  INTENTIONAL  AND  MATERIAL  UNDERSTATEMENT OR CONCEALMENT OF
PAYROLL OR FAILURE TO SECURE WORKERS' COMPENSATION INSURANCE, THE PENAL-
TIES IMPOSED BY PARAGRAPH (D) OF SUBDIVISION ONE OF SECTION FIFTY-TWO OF
THE WORKERS' COMPENSATION LAW, AND FOR FAILURE TO KEEP A TRUE AND  ACCU-
RATE  RECORD  PURSUANT TO SECTION ONE HUNDRED THIRTY-ONE OF THE WORKERS'
COMPENSATION LAW, THE PENALTIES OF SECTION ONE HUNDRED THIRTY-ONE OF THE
WORKERS' COMPENSATION LAW.
  (C) FOR FAILURE TO PAY BUSINESS, CORPORATE OR PERSONAL INCOME TAX, THE
PENALTIES IMPOSED BY SECTION SIX HUNDRED EIGHTY-FIVE  AND  ONE  THOUSAND
EIGHTY-FIVE OF THE TAX LAW.
  7.  ANY  CONTRACTOR OR ANY OFFICER OR SHAREHOLDER WHO OWNS OR CONTROLS
AT LEAST TEN PERCENT OF THE OUTSTANDING STOCK OF SUCH  CORPORATION  THAT
HAS BEEN CONVICTED OF A MISDEMEANOR SHALL BE SUBJECT TO DEBARMENT AND BE
INELIGIBLE  TO  SUBMIT  A BID ON OR BE AWARDED ANY PUBLIC WORKS CONTRACT
WITH THE STATE, ANY MUNICIPAL CORPORATION, PUBLIC  BENEFIT  CORPORATION,
PUBLIC  AUTHORITY OR PUBLIC BODY FOR A PERIOD OF UP TO ONE YEAR FROM THE
DATE OF SUCH CONVICTION OR FINAL DETERMINATION, OR UP TO FIVE  YEARS  IN
THE EVENT OF ANY SUBSEQUENT VIOLATION.
  8.  IF THE CONTRACTOR IS A CORPORATION, ANY SUBSTANTIALLY OWNED AFFIL-
IATED ENTITY, AS DEFINED BY PARAGRAPH G OF SUBDIVISION FIVE  OF  SECTION
TWO  HUNDRED  TWENTY OF THIS CHAPTER, SHALL BE SUBJECT TO THE SAME CIVIL
PENALTY PROVIDED UNDER THIS ARTICLE FOR A VIOLATION OF SUCH PROVISION.
  9. ANY PENALTIES IMPOSED UNDER THIS SECTION SHALL BE APPEALED  TO  THE
INDUSTRIAL  BOARD  OF  APPEALS  IN ACCORDANCE WITH ARTICLE THREE OF THIS
CHAPTER.
  10. NOTHING IN THIS SECTION SHALL  LIMIT  THE  AVAILABILITY  OF  OTHER
REMEDIES AT LAW OR IN EQUITY FOR A VIOLATION OF THIS ARTICLE.
  11.  ANY FEE OR PENALTY ASSESSED FOR A VIOLATION OF THIS ARTICLE SHALL
BE DEPOSITED INTO THE DEPARTMENT'S FEE AND PENALTY ACCOUNT.
  S 861-F. RETALIATION. 1. IT IS A VIOLATION  OF  THIS  ARTICLE  FOR  AN
EMPLOYER OR ANY AGENT OF ANY EMPLOYER, TO RETALIATE THROUGH DISCHARGE OR
IN ANY OTHER MANNER AGAINST ANY PERSON IN THE TERMS OF CONDITIONS OF HIS
OR  HER  EMPLOYMENT FOR EXERCISING ANY RIGHTS GRANTED UNDER THIS ARTICLE
FOR:
  (A) MAKING, OR THREATENING  TO  MAKE,  A  COMPLAINT  TO  AN  EMPLOYER,
CO-WORKER  OR TO A PUBLIC BODY THAT RIGHTS GUARANTEED UNDER THIS ARTICLE
HAVE BEEN VIOLATED;
  (B) CAUSING TO BE INSTITUTED ANY PROCEEDING UNDER OR RELATED  TO  THIS
ARTICLE; OR
  (C)  PROVIDING  INFORMATION  TO, OR TESTIFYING BEFORE, ANY PUBLIC BODY
CONDUCTING AN INVESTIGATION, HEARING OR INQUIRY INTO ANY SUCH  VIOLATION
OF A LAW, RULE OR REGULATION BY SUCH EMPLOYER.
  2. ANY ACT OF RETALIATION UNDER THIS SECTION SHALL SUBJECT AN EMPLOYER
TO  THE  CIVIL PENALTIES UNDER SECTION EIGHT HUNDRED SIXTY-ONE-E OF THIS
ARTICLE, OR TO A PRIVATE CAUSE OF ACTION, OR BOTH.
  S 2. Paragraph (b) of subdivision 1 of section 511 of the labor law is
amended by adding a new subparagraph 1-b to read as follows:
  (1-B) AS AN EMPLOYEE IN THE CONSTRUCTION INDUSTRY UNLESS THE  PRESUMP-
TION  OF  EMPLOYMENT  CAN  BE  OVERCOME, AS PROVIDED UNDER SECTION EIGHT
HUNDRED SIXTY-ONE-C OF THIS CHAPTER; OR
  S 3. The opening paragraph of subdivision 4 of section 2 of the  work-
ers' compensation law, as amended by chapter 205 of the laws of 1993, is
amended to read as follows:
  "Employee" means a person engaged in one of the occupations enumerated
in section three OF THIS ARTICLE or who is in the service of an employer
whose  principal business is that of carrying on or conducting a hazard-

S. 5847--C                          6

ous employment upon the premises or at the plant, or in  the  course  of
his  OR  HER  employment  away  from  the  plant of his OR HER employer;
"EMPLOYEE" SHALL ALSO MEAN FOR THE PURPOSES OF THIS CHAPTER ANY INDIVID-
UAL  PERFORMING  SERVICES  IN CONSTRUCTION FOR A CONTRACTOR WHO DOES NOT
OVERCOME THE PRESUMPTION OF EMPLOYMENT AS PROVIDED UNDER  SECTION  EIGHT
HUNDRED SIXTY-ONE-C OF THE LABOR LAW; "employee" shall also mean for the
purposes  of  this chapter civil defense volunteers who are personnel of
volunteer agencies sponsored or authorized by a local office under regu-
lations of the civil defense commission, to the extent of the provisions
of groups seventeen and nineteen; "employee" shall at the election of  a
municipal  corporation made pursuant to local law duly enacted also mean
a member of an auxiliary police organization authorized  by  local  law;
and  for the purposes of this chapter only a newspaper carrier under the
age of eighteen years as defined in section thirty-two  hundred  twenty-
eight  of  the  education  law,  and shall not include domestic servants
except as provided in section three of this chapter,  and  except  where
the employer has elected to bring such employees under the law by secur-
ing  compensation  in accordance with the terms of section fifty of this
chapter. The term "employee" shall not include persons who  are  members
of  a  supervised  amateur  athletic  activity  operated on a non-profit
basis, provided that said members are  not  also  otherwise  engaged  or
employed  by  any  person,  firm  or  corporation  participating in said
athletic activity, nor shall it include the spouse or minor child of  an
employer  who  is  a  farmer unless the services of such spouse or minor
child shall be engaged by said employer under  an  express  contract  of
hire  nor  shall it include an executive officer of a corporation who at
all times during  the  period  involved  owns  all  of  the  issued  and
outstanding stock of the corporation and holds all of the offices pursu-
ant  to  paragraph  (e) of section seven hundred fifteen of the business
corporation law or two executive officers of a corporation  who  at  all
times  during the period involved between them own all of the issued and
outstanding stock of such corporation and hold all such  offices  except
as  provided  in  subdivision  six of section fifty-four of this chapter
provided, however, that where there are  two  executive  officers  of  a
corporation each officer must own at least one share of stock, nor shall
it  include  a  self-employed  person  or  a partner of a partnership as
defined in section ten of the partnership law who is not covered under a
compensation insurance contract or a certificate  of  self-insurance  as
provided in subdivision eight of section fifty-four of this chapter, nor
shall it include farm laborers except as provided in group fourteen-b of
section  three  of  this chapter. If a farm labor contractor recruits or
supplies farm laborers for work on a farm, such farm laborers shall  for
the  purposes  of this chapter be deemed to be employees of the owner or
lessee of such farm.  The term "employee" shall not include baby sitters
as defined in subdivision three of section one  hundred  thirty-one  and
subdivision  three of section one hundred thirty-two of the labor law or
minors fourteen years of  age  or  over  engaged  in  casual  employment
consisting  of  yard work and household chores in and about a one family
owner-occupied residence or the premises of a non-profit, non-commercial
organization, not involving the use of power-driven machinery. The  term
"employee"  shall  not  include  persons  engaged by the owner in casual
employment consisting of yard work, household chores and making  repairs
to  or  painting in and about a one-family owner-occupied residence. The
term "employee" shall not include the services of a licensed real estate
broker or sales associate if it be proven that (a) substantially all  of
the  remuneration  (whether  or  not  paid  in  cash)  for  the services

S. 5847--C                          7

performed by such broker or sales associate is directly related to sales
or other output (including the performance of services) rather  than  to
the  number of hours worked; (b) the services performed by the broker or
sales  associate  are  performed pursuant to a written contract executed
between such broker or sales associate  and  the  person  for  whom  the
services are performed within the past twelve to fifteen months; and (c)
the  written  contract  provided  for  in paragraph (b) [herein] OF THIS
SUBDIVISION was not executed under duress  and  contains  the  following
provisions:
  S  4.  Notwithstanding any other provision of the law to the contrary,
the provisions of section 861-c of the labor law, as  added  by  section
one  of  this act, shall apply to and be utilized for all determinations
of a construction industry  individual's  employment  status  under  the
labor law and the workers' compensation law.
  S  5.  This  act  shall take effect on the sixtieth day after it shall
have become a law.

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5847--D
    Cal. No. 782

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 11, 2009
                               ___________

Introduced  by  Sens. ONORATO, FOLEY, ADDABBO, BRESLIN, KRUEGER, LARKIN,
  SAVINO, SCHNEIDERMAN, STACHOWSKI -- read twice  and  ordered  printed,
  and  when  printed to be committed to the Committee on Rules -- recom-
  mitted to the Committee on Labor in accordance  with  Senate  Rule  6,
  sec.  8  --  committee  discharged, bill amended, ordered reprinted as
  amended and recommitted to said committee -- reported  favorably  from
  said  committee  and  committed to the Committee on Codes -- committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee  --  reported  favorably  from  said  committee  and
  committed  to  the  Committee on Finance -- committee discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee  --  reported  favorably from said committee, ordered to first and
  second report,  ordered  to  a  third  reading,  amended  and  ordered
  reprinted, retaining its place in the order of third reading

AN  ACT  to  amend  the labor law, in relation to enacting the "New York
  state construction industry fair play act"; and to amend the  workers'
  compensation law, in relation to the definition of employee

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The labor law is amended by adding a new  article  25-B  to
read as follows:
                               ARTICLE 25-B
         THE NEW YORK STATE CONSTRUCTION INDUSTRY FAIR PLAY ACT
SECTION 861.   SHORT TITLE.
        861-A. LEGISLATIVE FINDINGS AND INTENT.
        861-B. DEFINITIONS.
        861-C. PRESUMPTION OF EMPLOYMENT IN THE CONSTRUCTION INDUSTRY.
        861-D. NOTICE TO PERSONS RECEIVING REMUNERATION FROM CONTRACTORS
                 AND SUBCONTRACTORS.
        861-E. VIOLATIONS AND PENALTIES.
        861-F. RETALIATION.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD11756-29-0

S. 5847--D                          2

  S  861.  SHORT  TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
"THE NEW YORK STATE CONSTRUCTION INDUSTRY FAIR PLAY ACT".
  S 861-A. LEGISLATIVE FINDINGS AND INTENT. THE LEGISLATURE HEREBY FINDS
AND DECLARES THAT NEW YORK STATE'S CONSTRUCTION INDUSTRY IS EXPERIENCING
DANGEROUS  LEVELS  OF  EMPLOYEE  MISCLASSIFICATION FRAUD.   UNSCRUPULOUS
EMPLOYERS ARE INTENTIONALLY REPORTING EMPLOYEES AS INDEPENDENT  CONTRAC-
TORS  TO STATE AND FEDERAL AUTHORITIES OR WORKERS' COMPENSATION CARRIERS
IN RECORD NUMBERS. IN ADDITION, THERE HAS BEEN AN EXPLOSION OF EMPLOYERS
WHO OPERATE IN THE UNDERGROUND ECONOMY AND FAIL TO REPORT ALL OR A SIZA-
BLE 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.
  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 CONSTRUCTING, RECONSTRUCTING, ALTERING, MAIN-
TAINING, MOVING, REHABILITATING, REPAIRING, RENOVATING OR DEMOLITION  OF
ANY  BUILDING,  STRUCTURE, OR IMPROVEMENT, OR RELATING TO THE EXCAVATION
OF OR OTHER DEVELOPMENT OR IMPROVEMENT TO LAND.
  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  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.
  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 THE PERSON IS A SEPARATE BUSINESS ENTITY UNDER SUBDI-
VISION TWO OF THIS SECTION OR ALL OF THE FOLLOWING CRITERIA ARE MET,  IN
WHICH CASE THE PERSON SHALL BE AN INDEPENDENT CONTRACTOR:
  (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 USUAL COURSE OF BUSINESS
FOR WHICH THE SERVICE IS PERFORMED; AND
  (C) THE INDIVIDUAL IS CUSTOMARILY ENGAGED IN AN  INDEPENDENTLY  ESTAB-
LISHED TRADE, OCCUPATION, PROFESSION, OR BUSINESS THAT IS SIMILAR TO THE
SERVICE AT ISSUE.
  2.  A  BUSINESS  ENTITY,  INCLUDING  ANY SOLE PROPRIETOR, PARTNERSHIP,
CORPORATION OR ENTITY THAT MAY BE A CONTRACTOR UNDER THIS SECTION  SHALL
BE  CONSIDERED  A SEPARATE BUSINESS ENTITY FROM THE CONTRACTOR WHERE ALL
THE FOLLOWING CRITERIA ARE MET:
  (A) THE BUSINESS ENTITY IS PERFORMING THE SERVICE FREE FROM THE DIREC-
TION OR CONTROL OVER THE MEANS AND  MANNER  OF  PROVIDING  THE  SERVICE,

S. 5847--D                          3

SUBJECT  ONLY  TO  THE  RIGHT  OF THE CONTRACTOR FOR WHOM THE SERVICE IS
PROVIDED TO SPECIFY THE DESIRED RESULT;
  (B)  THE BUSINESS ENTITY IS NOT SUBJECT TO CANCELLATION OR DESTRUCTION
UPON SEVERANCE OF THE RELATIONSHIP WITH THE CONTRACTOR;
  (C) THE BUSINESS ENTITY HAS A SUBSTANTIAL INVESTMENT OF CAPITAL IN THE
BUSINESS ENTITY BEYOND ORDINARY TOOLS AND EQUIPMENT AND A PERSONAL VEHI-
CLE;
  (D) THE BUSINESS ENTITY OWNS THE CAPITAL GOODS AND GAINS  THE  PROFITS
AND BEARS THE LOSSES OF THE BUSINESS ENTITY;
  (E)  THE  BUSINESS  ENTITY MAKES ITS SERVICES AVAILABLE TO THE GENERAL
PUBLIC OR THE BUSINESS COMMUNITY ON A CONTINUING BASIS;
  (F) THE BUSINESS ENTITY INCLUDES SERVICES RENDERED ON A FEDERAL INCOME
TAX SCHEDULE AS AN INDEPENDENT BUSINESS OR PROFESSION;
  (G) THE BUSINESS ENTITY PERFORMS SERVICES FOR THE CONTRACTOR UNDER THE
BUSINESS ENTITY'S NAME;
  (H) WHEN THE SERVICES BEING PROVIDED REQUIRE A LICENSE OR PERMIT,  THE
BUSINESS  ENTITY OBTAINS AND PAYS FOR THE LICENSE OR PERMIT IN THE BUSI-
NESS ENTITY'S NAME;
  (I) THE BUSINESS ENTITY FURNISHES THE TOOLS AND EQUIPMENT NECESSARY TO
PROVIDE THE SERVICE;
  (J) IF NECESSARY, THE BUSINESS ENTITY HIRES ITS OWN EMPLOYEES  WITHOUT
CONTRACTOR  APPROVAL,  PAYS THE EMPLOYEES WITHOUT REIMBURSEMENT FROM THE
CONTRACTOR AND REPORTS THE EMPLOYEES' INCOME  TO  THE  INTERNAL  REVENUE
SERVICE;
  (K)  THE  CONTRACTOR  DOES  NOT  REPRESENT  THE  BUSINESS ENTITY AS AN
EMPLOYEE OF THE CONTRACTOR TO ITS CUSTOMERS; AND
  (L) THE BUSINESS ENTITY HAS THE RIGHT TO PERFORM SIMILAR SERVICES  FOR
OTHERS ON WHATEVER BASIS AND WHENEVER IT CHOOSES.
  3.  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, EXCEPT AS SET FORTH IN  PARA-
GRAPH (F) OF SUBDIVISION TWO OF THIS SECTION.
  4.  AN  INDIVIDUAL'S  ACT  OF SECURING WORKERS' COMPENSATION INSURANCE
WITH A CARRIER AS A SOLE PROPRIETOR, PARTNERSHIP OR OTHERWISE SHALL  NOT
BE BINDING ON ANY DETERMINATION UNDER THIS SECTION.
  5.  WHEN A BUSINESS ENTITY MEETS THE DEFINITION OF A SEPARATE BUSINESS
ENTITY PURSUANT TO SUBDIVISION TWO OF THIS SECTION, THE  SEPARATE  BUSI-
NESS  ENTITY  WILL  BE  CONSIDERED  A  CONTRACTOR  SUBJECT  TO  ALL  THE
PROVISIONS OF THIS ARTICLE IN REGARD TO THE CLASSIFICATION  OF  INDIVID-
UALS PERFORMING SERVICES FOR IT.
  S 861-D. NOTICE TO PERSONS RECEIVING REMUNERATION FROM CONTRACTORS AND
SUBCONTRACTORS. 1. EVERY CONTRACTOR SHALL POST IN A PROMINENT AND ACCES-
SIBLE  PLACE  ON  THE SITE WHERE THE CONSTRUCTION IS PERFORMED A LEGIBLE
STATEMENT, PROVIDED BY THE COMMISSIONER, THAT DESCRIBES THE RESPONSIBIL-
ITY OF INDEPENDENT CONTRACTORS TO PAY TAXES REQUIRED BY STATE AND FEDER-
AL LAW, THE RIGHTS OF EMPLOYEES TO WORKERS'  COMPENSATION,  UNEMPLOYMENT
BENEFITS,  MINIMUM  WAGE, OVERTIME AND OTHER FEDERAL AND STATE WORKPLACE
PROTECTIONS, AND THE PROTECTIONS AGAINST RETALIATION AND  THE  PENALTIES
IN THIS ARTICLE IF THE CONTRACTOR FAILS TO PROPERLY CLASSIFY AN INDIVID-
UAL  AS  AN EMPLOYEE. THIS NOTICE SHALL ALSO CONTAIN CONTACT INFORMATION
FOR INDIVIDUALS TO FILE COMPLAINTS  OR  INQUIRE  WITH  THE  COMMISSIONER
ABOUT  EMPLOYMENT  CLASSIFICATION  STATUS.  THIS  INFORMATION  SHALL  BE
PROVIDED IN ENGLISH, SPANISH OR OTHER LANGUAGES REQUIRED BY THE  COMMIS-
SIONER.  THE  POSTED STATEMENT SHALL BE CONSTRUCTED OF MATERIALS CAPABLE
OF WITHSTANDING ADVERSE WEATHER CONDITIONS.

S. 5847--D                          4

  2. WITHIN THIRTY DAYS OF THE  EFFECTIVE  DATE  OF  THIS  ARTICLE,  THE
COMMISSIONER  SHALL  CREATE  THE  NOTICE DESCRIBED IN SUBDIVISION ONE OF
THIS SECTION AND POST THE NOTICE ON THE DEPARTMENT'S WEBSITE  FOR  DOWN-
LOADING BY CONTRACTORS.
  3.  CONTRACTORS  WHO  VIOLATE THIS SECTION SHALL BE SUBJECT TO A CIVIL
PENALTY OF  UP  TO  ONE  THOUSAND  FIVE  HUNDRED  DOLLARS  FOR  A  FIRST
VIOLATION,  AND  UP  TO FIVE THOUSAND DOLLARS FOR A SUBSEQUENT VIOLATION
WITHIN A FIVE YEAR PERIOD.
  S 861-E. VIOLATIONS AND PENALTIES.   1. ANY  CONTRACTOR  WHO  WILFULLY
FAILS  TO  PROPERLY  CLASSIFY  AN  INDIVIDUAL AS AN EMPLOYEE AS PROVIDED
UNDER SECTION EIGHT HUNDRED SIXTY-ONE-C OF THIS ARTICLE SHALL BE SUBJECT
TO THE CIVIL AND CRIMINAL PENALTIES PROVIDED  UNDER  THIS  SECTION.  THE
CIVIL  PENALTIES  SET FORTH IN THIS SECTION SHALL BE IMPOSED AS FOLLOWS:
BY THE COMMISSIONER WHERE SUCH PENALTY IS BASED ON A VIOLATION  OF  THIS
CHAPTER;  BY  THE  CHAIR  OF  THE WORKERS' COMPENSATION BOARD WHERE SUCH
PENALTY IS BASED ON A VIOLATION OF THE WORKERS' COMPENSATION LAW; AND BY
THE COMMISSIONER OF TAXATION AND FINANCE WHEN SUCH PENALTY IS BASED ON A
VIOLATION OF THE TAX LAW, PROVIDED THAT NO MORE THAN ONE  CIVIL  PENALTY
UNDER  THIS SECTION MAY BE IMPOSED PER EMPLOYEE PER INCIDENT OF MISCLAS-
SIFICATION.
  (A) THE WORKERS' COMPENSATION BOARD SHALL PROVIDE A COPY OF ANY  ORDER
RELATING  TO  THE  MISCLASSIFICATION OF AN EMPLOYEE, THE INTENTIONAL AND
MATERIAL UNDERPAYMENT OR CONCEALMENT  OF  PAYROLL,  OR  THE  FAILURE  TO
SECURE WORKERS' COMPENSATION IN THE CONSTRUCTION INDUSTRY TO THE COMMIS-
SIONER AND COMMISSIONER OF TAXATION AND FINANCE NO LATER THAN SEVEN DAYS
AFTER THE ISSUANCE OF THE ORDER.
  (B)  NOTWITHSTANDING  THE  SECRECY  PROVISIONS  CONTAINED  IN ARTICLES
NINE-A AND TWENTY-TWO OF THE TAX LAW, THE  DEPARTMENT  OF  TAXATION  AND
FINANCE  SHALL PROVIDE A COPY OF ANY ASSESSMENT FOR FAILURE TO PAY BUSI-
NESS,  CORPORATE  OR  PERSONAL  INCOME  TAX  BY  AN  EMPLOYER   IN   THE
CONSTRUCTION INDUSTRY ARISING OUT OF THE MISCLASSIFICATION OF AN EMPLOY-
EE  TO  THE COMMISSIONER AND CHAIR OF THE WORKERS' COMPENSATION BOARD NO
LATER THAN SEVEN DAYS AFTER THE ISSUANCE OF THE ASSESSMENT.
  (C) UPON THE ISSUANCE OF AN ORDER OR DETERMINATION BY THE COMMISSIONER
FOR A VIOLATION AND PENALTIES UNDER THIS ARTICLE, THE COMMISSIONER SHALL
PROVIDE A COPY OF THE ORDER TO THE CHAIR OF  THE  WORKERS'  COMPENSATION
BOARD  AND  THE COMMISSIONER OF TAXATION AND FINANCE NO LATER THAN SEVEN
DAYS AFTER THE ISSUANCE OF THE ORDER.
  2. FOR THE PURPOSES OF THIS SECTION,  THE  TERM  "WILLFULLY  VIOLATES"
MEANS A CONTRACTOR KNEW OR SHOULD HAVE KNOWN THAT HIS OR HER CONDUCT WAS
PROHIBITED BY THIS SECTION.
  3.  ANY CONTRACTOR WHO WILLFULLY VIOLATES SECTION EIGHT HUNDRED SIXTY-
ONE-C OF THIS ARTICLE SHALL BE SUBJECT TO A CIVIL PENALTY OF UP TO TWEN-
TY-FIVE HUNDRED  DOLLARS  FOR  THE  FIRST  VIOLATION  PER  MISCLASSIFIED
EMPLOYEE  AND TO A CIVIL PENALTY OF UP TO FIVE THOUSAND DOLLARS FOR EACH
SUBSEQUENT VIOLATION PER MISCLASSIFIED EMPLOYEE WITHIN A FIVE YEAR PERI-
OD.
  4. IN ADDITION TO CIVIL PENALTIES, THE CRIMINAL PENALTIES IMPOSED ON A
CONTRACTOR WHO WILLFULLY VIOLATES THE PROVISIONS OF THIS  ARTICLE  SHALL
BE  A  MISDEMEANOR  AND  UPON  CONVICTION  SHALL BE PUNISHED FOR A FIRST
OFFENSE BY IMPRISONMENT FOR NOT MORE THAN THIRTY DAYS OR A FINE  NOT  TO
EXCEED  TWENTY-FIVE  THOUSAND  DOLLARS  AND  FOR A SUBSEQUENT OFFENSE BY
IMPRISONMENT FOR NOT MORE THAN SIXTY DAYS OR A FINE NOT TO EXCEED  FIFTY
THOUSAND DOLLARS.
  5. IF THE CONTRACTOR IS A CORPORATION, ANY OFFICER OF SUCH CORPORATION
OR  SHAREHOLDER  WHO  OWNS  OR  CONTROLS  AT  LEAST  TEN  PERCENT OF THE

S. 5847--D                          5

OUTSTANDING STOCK OF SUCH CORPORATION WHO KNOWINGLY PERMITS  THE  CORPO-
RATION TO WILLFULLY VIOLATE THE PROVISIONS OF THIS ARTICLE SHALL ALSO BE
IN VIOLATION OF THIS ARTICLE AND THE CIVIL AND CRIMINAL PENALTIES HEREIN
SHALL ATTACH TO SUCH OFFICER UPON CONVICTION.
  6.  ANY CONTRACTOR SUBJECT TO CIVIL PENALTIES UNDER THIS ARTICLE SHALL
ALSO BE SUBJECT TO ANY OTHER APPLICABLE PENALTIES OR  REMEDIES  PROVIDED
BY  LAW FOR FAILURE TO PAY ANY OTHER STATUTORY PAYMENT OR COVERAGE OBLI-
GATIONS, INCLUDING BUT NOT LIMITED TO, UNEMPLOYMENT INSURANCE,  WORKERS'
COMPENSATION  INSURANCE,  OR BUSINESS, CORPORATE OR PERSONAL INCOME TAX,
AS FOLLOWS:
  (A) FOR FAILURE TO  PAY  UNEMPLOYMENT  INSURANCE  TAX,  THE  PENALTIES
IMPOSED BY SECTION FIVE HUNDRED SEVENTY OF THIS CHAPTER.
  (B)  FOR  INTENTIONAL  AND  MATERIAL  UNDERSTATEMENT OR CONCEALMENT OF
PAYROLL OR FAILURE TO SECURE WORKERS' COMPENSATION INSURANCE, THE PENAL-
TIES IMPOSED BY PARAGRAPH (D) OF SUBDIVISION ONE OF SECTION FIFTY-TWO OF
THE WORKERS' COMPENSATION LAW, AND FOR FAILURE TO KEEP A TRUE AND  ACCU-
RATE  RECORD  PURSUANT TO SECTION ONE HUNDRED THIRTY-ONE OF THE WORKERS'
COMPENSATION LAW, THE PENALTIES OF SECTION ONE HUNDRED THIRTY-ONE OF THE
WORKERS' COMPENSATION LAW.
  (C) FOR FAILURE TO PAY BUSINESS, CORPORATE OR PERSONAL INCOME TAX, THE
PENALTIES IMPOSED BY SECTION SIX HUNDRED EIGHTY-FIVE  AND  ONE  THOUSAND
EIGHTY-FIVE OF THE TAX LAW.
  7.  ANY  CONTRACTOR OR ANY OFFICER OR SHAREHOLDER WHO OWNS OR CONTROLS
AT LEAST TEN PERCENT OF THE OUTSTANDING STOCK OF SUCH  CORPORATION  THAT
HAS BEEN CONVICTED OF A MISDEMEANOR SHALL BE SUBJECT TO DEBARMENT AND BE
INELIGIBLE  TO  SUBMIT  A BID ON OR BE AWARDED ANY PUBLIC WORKS CONTRACT
WITH THE STATE, ANY MUNICIPAL CORPORATION, PUBLIC  BENEFIT  CORPORATION,
PUBLIC  AUTHORITY OR PUBLIC BODY FOR A PERIOD OF UP TO ONE YEAR FROM THE
DATE OF SUCH CONVICTION OR FINAL DETERMINATION, OR UP TO FIVE  YEARS  IN
THE EVENT OF ANY SUBSEQUENT VIOLATION.
  8.  ANY  SUBSTANTIALLY  OWNED  AFFILIATED  ENTITY  OF A CONTRACTOR, AS
DEFINED BY PARAGRAPH G OF SUBDIVISION FIVE OF SECTION TWO HUNDRED TWENTY
OF THIS CHAPTER, SHALL BE SUBJECT TO THE  SAME  CIVIL  PENALTY  PROVIDED
UNDER THIS ARTICLE FOR A VIOLATION OF SUCH PROVISION.
  9.  ANY PENALTIES IMPOSED UNDER THIS SECTION BY THE COMMISSIONER SHALL
BE APPEALED TO THE INDUSTRIAL BOARD OF APPEALS IN ACCORDANCE WITH  ARTI-
CLE  THREE  OF THIS CHAPTER. ANY PENALTIES IMPOSED UNDER THIS SECTION BY
THE WORKERS' COMPENSATION BOARD OR COMMISSIONER OF TAXATION AND  FINANCE
SHALL BE APPEALED IN THE SAME MANNER AS THE UNDERLYING VIOLATION.
  10.  NOTHING  IN  THIS  SECTION  SHALL LIMIT THE AVAILABILITY OF OTHER
REMEDIES AT LAW OR IN EQUITY FOR A VIOLATION OF THIS ARTICLE.
  11. ANY FEE OR PENALTY ASSESSED FOR A VIOLATION OF THIS ARTICLE  SHALL
BE DEPOSITED INTO THE DEPARTMENT'S FEE AND PENALTY ACCOUNT.
  S  861-F.  RETALIATION.  1.  IT  IS A VIOLATION OF THIS ARTICLE FOR AN
EMPLOYER OR ANY AGENT OF ANY EMPLOYER, TO RETALIATE THROUGH DISCHARGE OR
IN ANY OTHER MANNER AGAINST ANY PERSON IN THE TERMS OF CONDITIONS OF HIS
OR HER EMPLOYMENT FOR EXERCISING ANY RIGHTS GRANTED UNDER  THIS  ARTICLE
FOR:
  (A)  MAKING,  OR  THREATENING  TO  MAKE,  A  COMPLAINT TO AN EMPLOYER,
CO-WORKER OR TO A PUBLIC BODY THAT RIGHTS GUARANTEED UNDER THIS  ARTICLE
HAVE BEEN VIOLATED;
  (B)  CAUSING  TO BE INSTITUTED ANY PROCEEDING UNDER OR RELATED TO THIS
ARTICLE; OR
  (C) PROVIDING INFORMATION TO, OR TESTIFYING BEFORE,  ANY  PUBLIC  BODY
CONDUCTING  AN INVESTIGATION, HEARING OR INQUIRY INTO ANY SUCH VIOLATION
OF A LAW, RULE OR REGULATION BY SUCH EMPLOYER.  NOTHING IN THIS  SECTION

S. 5847--D                          6

SHALL  LIMIT  THE  COMMISSIONER'S  AUTHORITY  UNDER  SECTION TWO HUNDRED
FIFTEEN OF THIS CHAPTER, OR ANY OTHER STATUTE.
  2. ANY ACT OF RETALIATION UNDER THIS SECTION SHALL SUBJECT AN EMPLOYER
TO  THE  CIVIL PENALTIES UNDER SECTION EIGHT HUNDRED SIXTY-ONE-E OF THIS
ARTICLE, OR TO A PRIVATE CAUSE OF ACTION, OR BOTH.
  S 2. Paragraph (b) of subdivision 1 of section 511 of the labor law is
amended by adding a new subparagraph 1-b to read as follows:
  (1-B) AS AN EMPLOYEE IN THE CONSTRUCTION INDUSTRY UNLESS THE  PRESUMP-
TION  OF  EMPLOYMENT  CAN  BE  OVERCOME, AS PROVIDED UNDER SECTION EIGHT
HUNDRED SIXTY-ONE-C OF THIS CHAPTER; OR
  S 3. The opening paragraph of subdivision 4 of section 2 of the  work-
ers' compensation law, as amended by chapter 205 of the laws of 1993, is
amended to read as follows:
  "Employee" means a person engaged in one of the occupations enumerated
in section three OF THIS ARTICLE or who is in the service of an employer
whose  principal business is that of carrying on or conducting a hazard-
ous employment upon the premises or at the plant, or in  the  course  of
his  OR  HER  employment  away  from  the  plant of his OR HER employer;
"EMPLOYEE" SHALL ALSO MEAN FOR THE PURPOSES OF THIS CHAPTER ANY INDIVID-
UAL PERFORMING SERVICES IN CONSTRUCTION FOR A CONTRACTOR  WHO  DOES  NOT
OVERCOME  THE  PRESUMPTION OF EMPLOYMENT AS PROVIDED UNDER SECTION EIGHT
HUNDRED SIXTY-ONE-C OF THE LABOR LAW; "employee" shall also mean for the
purposes of this chapter civil defense volunteers who are  personnel  of
volunteer agencies sponsored or authorized by a local office under regu-
lations of the civil defense commission, to the extent of the provisions
of  groups seventeen and nineteen; "employee" shall at the election of a
municipal corporation made pursuant to local law duly enacted also  mean
a  member  of  an auxiliary police organization authorized by local law;
and for the purposes of this chapter only a newspaper carrier under  the
age  of  eighteen years as defined in section thirty-two hundred twenty-
eight of the education law, and  shall  not  include  domestic  servants
except  as  provided  in section three of this chapter, and except where
the employer has elected to bring such employees under the law by secur-
ing compensation in accordance with the terms of section fifty  of  this
chapter.  The  term "employee" shall not include persons who are members
of a supervised amateur  athletic  activity  operated  on  a  non-profit
basis,  provided  that  said  members  are not also otherwise engaged or
employed by any  person,  firm  or  corporation  participating  in  said
athletic  activity, nor shall it include the spouse or minor child of an
employer who is a farmer unless the services of  such  spouse  or  minor
child  shall  be  engaged  by said employer under an express contract of
hire nor shall it include an executive officer of a corporation  who  at
all  times  during  the  period  involved  owns  all  of  the issued and
outstanding stock of the corporation and holds all of the offices pursu-
ant to paragraph (e) of section seven hundred fifteen  of  the  business
corporation  law  or  two executive officers of a corporation who at all
times during the period involved between them own all of the issued  and
outstanding  stock  of such corporation and hold all such offices except
as provided in subdivision six of section  fifty-four  of  this  chapter
provided,  however,  that  where  there  are two executive officers of a
corporation each officer must own at least one share of stock, nor shall
it include a self-employed person or  a  partner  of  a  partnership  as
defined in section ten of the partnership law who is not covered under a
compensation  insurance  contract  or a certificate of self-insurance as
provided in subdivision eight of section fifty-four of this chapter, nor
shall it include farm laborers except as provided in group fourteen-b of

S. 5847--D                          7

section three of this chapter. If a farm labor  contractor  recruits  or
supplies  farm laborers for work on a farm, such farm laborers shall for
the purposes of this chapter be deemed to be employees of the  owner  or
lessee of such farm.  The term "employee" shall not include baby sitters
as  defined  in  subdivision three of section one hundred thirty-one and
subdivision three of section one hundred thirty-two of the labor law  or
minors  fourteen  years  of  age  or  over  engaged in casual employment
consisting of yard work and household chores in and about a  one  family
owner-occupied residence or the premises of a non-profit, non-commercial
organization,  not involving the use of power-driven machinery. The term
"employee" shall not include persons engaged  by  the  owner  in  casual
employment  consisting of yard work, household chores and making repairs
to or painting in and about a one-family owner-occupied  residence.  The
term "employee" shall not include the services of a licensed real estate
broker  or sales associate if it be proven that (a) substantially all of
the remuneration  (whether  or  not  paid  in  cash)  for  the  services
performed by such broker or sales associate is directly related to sales
or  other  output (including the performance of services) rather than to
the number of hours worked; (b) the services performed by the broker  or
sales  associate  are  performed pursuant to a written contract executed
between such broker or sales associate  and  the  person  for  whom  the
services are performed within the past twelve to fifteen months; and (c)
the  written  contract  provided  for  in paragraph (b) [herein] OF THIS
SUBDIVISION was not executed under duress  and  contains  the  following
provisions:
  S  4.  Notwithstanding any other provision of the law to the contrary,
the provisions of section 861-c of the labor law, as  added  by  section
one  of  this act, shall apply to and be utilized for all determinations
of a construction industry  individual's  employment  status  under  the
labor law and the workers' compensation law, but not the tax law.
  S  5.  This  act  shall take effect on the sixtieth day after it shall
have become a law.

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5847--E
    Cal. No. 782

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 11, 2009
                               ___________

Introduced  by  Sens. ONORATO, FOLEY, ADDABBO, BRESLIN, KRUEGER, LARKIN,
  SAVINO, SCHNEIDERMAN, STACHOWSKI -- read twice  and  ordered  printed,
  and  when  printed to be committed to the Committee on Rules -- recom-
  mitted to the Committee on Labor in accordance  with  Senate  Rule  6,
  sec.  8  --  committee  discharged, bill amended, ordered reprinted as
  amended and recommitted to said committee -- reported  favorably  from
  said  committee  and  committed to the Committee on Codes -- committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee  --  reported  favorably  from  said  committee  and
  committed  to  the  Committee on Finance -- committee discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee  --  reported  favorably from said committee, ordered to first and
  second report,  ordered  to  a  third  reading,  amended  and  ordered
  reprinted,  retaining its place in the order of third reading -- again
  amended and ordered reprinted, retaining its place  in  the  order  of
  third reading

AN  ACT  to  amend  the labor law, in relation to enacting the "New York
  state construction industry fair play act"; and to amend the  workers'
  compensation law, in relation to the definition of employee

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The labor law is amended by adding a new  article  25-B  to
read as follows:
                               ARTICLE 25-B
         THE NEW YORK STATE CONSTRUCTION INDUSTRY FAIR PLAY ACT
SECTION 861.   SHORT TITLE.
        861-A. LEGISLATIVE FINDINGS AND INTENT.
        861-B. DEFINITIONS.
        861-C. PRESUMPTION OF EMPLOYMENT IN THE CONSTRUCTION INDUSTRY.
        861-D. NOTICE TO PERSONS RECEIVING REMUNERATION FROM CONTRACTORS
                 AND SUBCONTRACTORS.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD11756-19-0

S. 5847--E                          2

        861-E. VIOLATIONS AND PENALTIES.
        861-F. RETALIATION.
  S  861.  SHORT  TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
"THE NEW YORK STATE CONSTRUCTION INDUSTRY FAIR PLAY ACT".
  S 861-A. LEGISLATIVE FINDINGS AND INTENT. THE LEGISLATURE HEREBY FINDS
AND DECLARES THAT NEW YORK STATE'S CONSTRUCTION INDUSTRY IS EXPERIENCING
DANGEROUS LEVELS OF  EMPLOYEE  MISCLASSIFICATION  FRAUD.    UNSCRUPULOUS
EMPLOYERS  ARE INTENTIONALLY REPORTING EMPLOYEES AS INDEPENDENT CONTRAC-
TORS TO STATE AND FEDERAL AUTHORITIES OR WORKERS' COMPENSATION  CARRIERS
IN RECORD NUMBERS. IN ADDITION, THERE HAS BEEN AN EXPLOSION OF EMPLOYERS
WHO OPERATE IN THE UNDERGROUND ECONOMY AND FAIL TO REPORT ALL OR A SIZA-
BLE 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.
  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 CONSTRUCTING, RECONSTRUCTING, ALTERING,  MAIN-
TAINING,  MOVING, REHABILITATING, REPAIRING, RENOVATING OR DEMOLITION OF
ANY BUILDING, STRUCTURE, OR IMPROVEMENT, OR RELATING TO  THE  EXCAVATION
OF OR OTHER DEVELOPMENT OR IMPROVEMENT TO LAND.
  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  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.
  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 THE PERSON IS A SEPARATE BUSINESS ENTITY UNDER SUBDI-
VISION  TWO OF THIS SECTION OR ALL OF THE FOLLOWING CRITERIA ARE MET, IN
WHICH CASE THE PERSON SHALL BE AN INDEPENDENT CONTRACTOR:
  (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 USUAL COURSE OF BUSINESS
FOR WHICH THE SERVICE IS PERFORMED; AND
  (C)  THE  INDIVIDUAL IS CUSTOMARILY ENGAGED IN AN INDEPENDENTLY ESTAB-
LISHED TRADE, OCCUPATION, PROFESSION, OR BUSINESS THAT IS SIMILAR TO THE
SERVICE AT ISSUE.
  2. A SOLE PROPRIETOR, PARTNERSHIP OR CORPORATION MAY BE  CONSIDERED  A
SEPARATE  BUSINESS ENTITY FROM THE CONTRACTOR WHERE ALL OF THE FOLLOWING
CRITERIA ARE MET:

S. 5847--E                          3

  (A) THE SOLE PROPRIETOR, PARTNERSHIP OR CORPORATION IS PERFORMING  THE
SERVICE  FREE FROM THE DIRECTION OR CONTROL OVER THE MEANS AND MANNER OF
PROVIDING THE SERVICE, SUBJECT ONLY TO THE RIGHT OF THE  CONTRACTOR  FOR
WHOM THE SERVICE IS PROVIDED TO SPECIFY THE DESIRED RESULT;
  (B)  THE SOLE PROPRIETOR, PARTNERSHIP OR CORPORATION IS NOT SUBJECT TO
CANCELLATION OR DESTRUCTION UPON SEVERANCE OF THE RELATIONSHIP WITH  THE
CONTRACTOR;
  (C)  THE SOLE PROPRIETOR, PARTNERSHIP OR CORPORATION HAS A SUBSTANTIAL
INVESTMENT OF CAPITAL IN THE SOLE PROPRIETORSHIP OR  PARTNERSHIP  BEYOND
ORDINARY TOOLS AND EQUIPMENT AND A PERSONAL VEHICLE;
  (D)  THE  SOLE PROPRIETOR, PARTNERSHIP OR CORPORATION OWNS THE CAPITAL
GOODS AND GAINS THE PROFITS AND BEARS THE LOSSES OF THE SOLE PROPRIETOR-
SHIP OR PARTNERSHIP;
  (E) THE SOLE PROPRIETOR, PARTNERSHIP OR CORPORATION MAKES ITS SERVICES
AVAILABLE TO THE GENERAL PUBLIC OR THE BUSINESS COMMUNITY ON A  CONTINU-
ING BASIS;
  (F)  THE SOLE PROPRIETOR, PARTNERSHIP OR CORPORATION INCLUDES SERVICES
RENDERED ON A FEDERAL INCOME TAX SCHEDULE AS AN INDEPENDENT BUSINESS  OR
PROFESSION;
  (G)  THE SOLE PROPRIETOR, PARTNERSHIP OR CORPORATION PERFORMS SERVICES
FOR THE CONTRACTOR UNDER THE  SOLE  PROPRIETORSHIP'S,  PARTNERSHIP'S  OR
CORPORATION'S NAME;
  (H)  WHEN THE SERVICES BEING PROVIDED REQUIRE A LICENSE OR PERMIT, THE
SOLE PROPRIETOR, PARTNERSHIP OR CORPORATION OBTAINS  AND  PAYS  FOR  THE
LICENSE  OR PERMIT IN THE SOLE PROPRIETORSHIP'S, PARTNERSHIP'S OR CORPO-
RATION'S NAME;
  (I) THE SOLE PROPRIETOR,  PARTNERSHIP  OR  CORPORATION  FURNISHES  THE
TOOLS AND EQUIPMENT NECESSARY TO PROVIDE THE SERVICE;
  (J)  IF  NECESSARY,  THE  SOLE  PROPRIETOR, PARTNERSHIP OR CORPORATION
HIRES ITS OWN EMPLOYEES WITHOUT CONTRACTOR APPROVAL, PAYS THE  EMPLOYEES
WITHOUT  REIMBURSEMENT  FROM  THE  CONTRACTOR AND REPORTS THE EMPLOYEES'
INCOME TO THE INTERNAL REVENUE SERVICE;
  (K) THE CONTRACTOR DOES NOT REPRESENT THE SOLE  PROPRIETORSHIP,  PART-
NERSHIP  OR  CORPORATION AS AN EMPLOYEE OF THE CONTRACTOR TO ITS CUSTOM-
ERS; AND
  (L) THE SOLE PROPRIETOR, PARTNERSHIP OR CORPORATION HAS THE  RIGHT  TO
PERFORM  SIMILAR  SERVICES  FOR OTHERS ON WHATEVER BASIS AND WHENEVER IT
CHOOSES.
  3. 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.
  4.  AN  INDIVIDUAL'S  ACT  OF SECURING WORKERS' COMPENSATION INSURANCE
WITH A CARRIER AS A SOLE PROPRIETOR, PARTNERSHIP OR OTHERWISE SHALL  NOT
BE BINDING ON ANY DETERMINATION UNDER THIS SECTION.
  S 861-D. NOTICE TO PERSONS RECEIVING REMUNERATION FROM CONTRACTORS AND
SUBCONTRACTORS. 1. EVERY CONTRACTOR SHALL POST IN A PROMINENT AND ACCES-
SIBLE  PLACE  ON  THE SITE WHERE THE CONSTRUCTION IS PERFORMED A LEGIBLE
STATEMENT, PROVIDED BY THE COMMISSIONER, THAT DESCRIBES THE RESPONSIBIL-
ITY OF INDEPENDENT CONTRACTORS TO PAY TAXES REQUIRED BY STATE AND FEDER-
AL LAW, THE RIGHTS OF EMPLOYEES TO WORKERS'  COMPENSATION,  UNEMPLOYMENT
BENEFITS,  MINIMUM  WAGE, OVERTIME AND OTHER FEDERAL AND STATE WORKPLACE
PROTECTIONS, AND THE PROTECTIONS AGAINST RETALIATION AND  THE  PENALTIES
IN THIS ARTICLE IF THE CONTRACTOR FAILS TO PROPERLY CLASSIFY AN INDIVID-
UAL  AS  AN EMPLOYEE. THIS NOTICE SHALL ALSO CONTAIN CONTACT INFORMATION
FOR INDIVIDUALS TO FILE COMPLAINTS  OR  INQUIRE  WITH  THE  COMMISSIONER

S. 5847--E                          4

ABOUT  EMPLOYMENT  CLASSIFICATION  STATUS.  THIS  INFORMATION  SHALL  BE
PROVIDED IN ENGLISH, SPANISH OR OTHER LANGUAGES REQUIRED BY THE  COMMIS-
SIONER.  THE  POSTED STATEMENT SHALL BE CONSTRUCTED OF MATERIALS CAPABLE
OF WITHSTANDING ADVERSE WEATHER CONDITIONS.
  2.  WITHIN  THIRTY  DAYS  OF  THE  EFFECTIVE DATE OF THIS ARTICLE, THE
COMMISSIONER SHALL CREATE THE NOTICE DESCRIBED  IN  SUBDIVISION  ONE  OF
THIS  SECTION  AND POST THE NOTICE ON THE DEPARTMENT'S WEBSITE FOR DOWN-
LOADING BY CONTRACTORS.
  3. CONTRACTORS WHO VIOLATE THIS SECTION SHALL BE SUBJECT  TO  A  CIVIL
PENALTY  OF  UP  TO  ONE  THOUSAND  FIVE  HUNDRED  DOLLARS  FOR  A FIRST
VIOLATION, AND UP TO FIVE THOUSAND DOLLARS FOR  A  SUBSEQUENT  VIOLATION
WITHIN A FIVE YEAR PERIOD.
  S  861-E.  VIOLATIONS  AND  PENALTIES.  1. ANY CONTRACTOR WHO FAILS TO
PROPERLY CLASSIFY AN INDIVIDUAL AS AN EMPLOYEE AS PROVIDED UNDER SECTION
EIGHT HUNDRED SIXTY-ONE-C OF THIS ARTICLE SHALL BE SUBJECT TO THE  CIVIL
AND CRIMINAL PENALTIES PROVIDED UNDER THIS SECTION.
  (A) PRIOR TO THE COMMISSIONER IMPOSING A CIVIL PENALTY FOR A VIOLATION
ARISING  UNDER  THE WORKERS' COMPENSATION LAW, THE CHAIR OF THE WORKERS'
COMPENSATION BOARD MUST HAVE ISSUED AN ORDER FINDING SUCH A VIOLATION TO
HAVE OCCURRED. THE WORKERS' COMPENSATION BOARD  SHALL  REFER  ANY  ORDER
RELATING  TO  THE  MISCLASSIFICATION OF AN EMPLOYEE, THE INTENTIONAL AND
MATERIAL UNDERPAYMENT OR CONCEALMENT  OF  PAYROLL,  OR  THE  FAILURE  TO
SECURE WORKERS' COMPENSATION IN THE CONSTRUCTION INDUSTRY TO THE DEPART-
MENT NO LATER THAN SEVEN DAYS AFTER THE ISSUANCE OF THE ORDER.
  (B)  PRIOR TO THE COMMISSIONER IMPOSING A CIVIL PENALTY FOR FAILURE TO
PAY BUSINESS, CORPORATE OR PERSONAL INCOME TAX, THE COMMISSIONER OF  THE
DEPARTMENT  OF  TAXATION AND FINANCE MUST HAVE ISSUED AN ORDER FINDING A
VIOLATION UNDER PART FIVE OF ARTICLE TWENTY-TWO OR ARTICLE  TWENTY-SEVEN
OF  THE TAX LAW. THE DEPARTMENT OF TAXATION AND FINANCE SHALL REFER SUCH
ORDER TO THE COMMISSIONER NO LATER THAN SEVEN DAYS AFTER THE ISSUANCE OF
THE ORDER.
  (C) UPON THE ISSUANCE OF AN ORDER BY THE COMMISSIONER FOR A  VIOLATION
AND  PENALTIES UNDER THIS ARTICLE, THE COMMISSIONER SHALL PROVIDE A COPY
OF THE ORDER TO THE CHAIR OF THE WORKERS'  COMPENSATION  BOARD  AND  THE
COMMISSIONER  OF TAXATION AND FINANCE NO LATER THAN SEVEN DAYS AFTER THE
ISSUANCE OF THE ORDER.
  2. FOR THE PURPOSES OF THIS SECTION,  THE  TERM  "WILLFULLY  VIOLATES"
MEANS A CONTRACTOR KNEW OR SHOULD HAVE KNOWN THAT HIS OR HER CONDUCT WAS
PROHIBITED BY THIS SECTION.
  3.  ANY CONTRACTOR WHO WILLFULLY VIOLATES SECTION EIGHT HUNDRED SIXTY-
ONE-C OF THIS ARTICLE SHALL BE SUBJECT TO A CIVIL PENALTY OF UP TO TWEN-
TY-FIVE HUNDRED  DOLLARS  FOR  THE  FIRST  VIOLATION  PER  MISCLASSIFIED
EMPLOYEE  AND TO A CIVIL PENALTY OF UP TO FIVE THOUSAND DOLLARS FOR EACH
SUBSEQUENT VIOLATION PER MISCLASSIFIED EMPLOYEE WITHIN A FIVE YEAR PERI-
OD.
  4. IN ADDITION TO CIVIL PENALTIES, THE CRIMINAL PENALTIES IMPOSED ON A
CONTRACTOR WHO WILLFULLY VIOLATES THE PROVISIONS OF THIS  ARTICLE  SHALL
BE  A  MISDEMEANOR  AND  UPON  CONVICTION  SHALL BE PUNISHED FOR A FIRST
OFFENSE BY IMPRISONMENT FOR NOT MORE THAN THIRTY DAYS OR A FINE  NOT  TO
EXCEED  TWENTY-FIVE  THOUSAND  DOLLARS  AND  FOR A SUBSEQUENT OFFENSE BY
IMPRISONMENT FOR NOT MORE THAN SIXTY DAYS OR A FINE NOT TO EXCEED  FIFTY
THOUSAND DOLLARS.
  5. IF THE CONTRACTOR IS A CORPORATION, ANY OFFICER OF SUCH CORPORATION
OR  SHAREHOLDER  WHO  OWNS  OR  CONTROLS  AT  LEAST  TEN  PERCENT OF THE
OUTSTANDING STOCK OF SUCH CORPORATION WHO KNOWINGLY PERMITS  THE  CORPO-
RATION TO WILLFULLY VIOLATE THE PROVISIONS OF THIS ARTICLE SHALL ALSO BE

S. 5847--E                          5

IN VIOLATION OF THIS ARTICLE AND THE CIVIL AND CRIMINAL PENALTIES HEREIN
SHALL ATTACH TO SUCH OFFICER UPON CONVICTION.
  6. ANY CONTRACTOR THAT WILLFULLY VIOLATES THE PROVISIONS OF THIS ARTI-
CLE  AND  SUCH VIOLATION RESULTS IN A FAILURE TO PAY ANY OTHER STATUTORY
PAYMENT OR COVERAGE OBLIGATIONS, INCLUDING BUT NOT LIMITED TO, UNEMPLOY-
MENT INSURANCE, WORKERS' COMPENSATION INSURANCE, OR BUSINESS,  CORPORATE
OR  PERSONAL  INCOME  TAX  SHALL  BE  SUBJECT,  AT THE DISCRETION OF THE
COMMISSIONER, TO ADDITIONAL CIVIL PENALTIES AS FOLLOWS:
  (A) FOR FAILURE TO  PAY  UNEMPLOYMENT  INSURANCE  TAX,  THE  PENALTIES
IMPOSED BY SECTION FIVE HUNDRED SEVENTY OF THIS CHAPTER.
  (B)  FOR  INTENTIONAL  AND  MATERIAL  UNDERSTATEMENT OR CONCEALMENT OF
PAYROLL OR FAILURE TO SECURE WORKERS' COMPENSATION INSURANCE, THE PENAL-
TIES IMPOSED BY PARAGRAPH (D) OF SUBDIVISION ONE OF SECTION FIFTY-TWO OF
THE WORKERS' COMPENSATION LAW, AND FOR FAILURE TO KEEP A TRUE AND  ACCU-
RATE  RECORD  PURSUANT TO SECTION ONE HUNDRED THIRTY-ONE OF THE WORKERS'
COMPENSATION LAW, THE PENALTIES OF SECTION ONE HUNDRED THIRTY-ONE OF THE
WORKERS' COMPENSATION LAW.
  (C) FOR FAILURE TO PAY BUSINESS, CORPORATE OR PERSONAL INCOME TAX, THE
PENALTIES IMPOSED BY SECTION SIX HUNDRED EIGHTY-FIVE  AND  ONE  THOUSAND
EIGHTY-FIVE OF THE TAX LAW.
  7.  ANY  CONTRACTOR OR ANY OFFICER OR SHAREHOLDER WHO OWNS OR CONTROLS
AT LEAST TEN PERCENT OF THE OUTSTANDING STOCK OF SUCH  CORPORATION  THAT
HAS  BEEN CONVICTED OF A MISDEMEANOR UNDER THIS ARTICLE SHALL BE SUBJECT
TO DEBARMENT AND BE INELIGIBLE TO SUBMIT A BID  ON  OR  BE  AWARDED  ANY
PUBLIC  WORKS CONTRACT WITH THE STATE, ANY MUNICIPAL CORPORATION, PUBLIC
BENEFIT CORPORATION, PUBLIC AUTHORITY OR PUBLIC BODY FOR A PERIOD OF  UP
TO  ONE YEAR FROM THE DATE OF SUCH CONVICTION OR FINAL DETERMINATION, OR
UP TO FIVE YEARS IN THE EVENT OF ANY SUBSEQUENT VIOLATION.
  8. IF THE CONTRACTOR IS A CORPORATION, ANY SUBSTANTIALLY OWNED  AFFIL-
IATED  ENTITY,  AS DEFINED BY PARAGRAPH G OF SUBDIVISION FIVE OF SECTION
TWO HUNDRED TWENTY OF THIS CHAPTER, SHALL BE SUBJECT TO THE  SAME  CIVIL
PENALTY PROVIDED UNDER THIS ARTICLE FOR A VIOLATION OF SUCH PROVISION.
  9.  ANY  PENALTIES IMPOSED UNDER THIS SECTION SHALL BE APPEALED TO THE
INDUSTRIAL BOARD OF APPEALS IN ACCORDANCE WITH  ARTICLE  THREE  OF  THIS
CHAPTER.
  10.  NOTHING  IN  THIS  SECTION  SHALL LIMIT THE AVAILABILITY OF OTHER
REMEDIES AT LAW OR IN EQUITY FOR A VIOLATION OF THIS ARTICLE.
  11. ANY FEE OR PENALTY ASSESSED FOR A VIOLATION OF THIS ARTICLE  SHALL
BE DEPOSITED INTO THE DEPARTMENT'S FEE AND PENALTY ACCOUNT.
  S  861-F.  RETALIATION.  1.  IT  IS A VIOLATION OF THIS ARTICLE FOR AN
EMPLOYER OR ANY AGENT OF ANY EMPLOYER, TO RETALIATE THROUGH DISCHARGE OR
IN ANY OTHER MANNER AGAINST ANY PERSON IN THE TERMS OF CONDITIONS OF HIS
OR HER EMPLOYMENT FOR EXERCISING ANY RIGHTS GRANTED UNDER  THIS  ARTICLE
FOR:
  (A)  MAKING,  OR  THREATENING  TO  MAKE,  A  COMPLAINT TO AN EMPLOYER,
CO-WORKER OR TO A PUBLIC BODY THAT RIGHTS GUARANTEED UNDER THIS  ARTICLE
HAVE BEEN VIOLATED;
  (B)  CAUSING  TO BE INSTITUTED ANY PROCEEDING UNDER OR RELATED TO THIS
ARTICLE; OR
  (C) PROVIDING INFORMATION TO, OR TESTIFYING BEFORE,  ANY  PUBLIC  BODY
CONDUCTING  AN INVESTIGATION, HEARING OR INQUIRY INTO ANY SUCH VIOLATION
OF A LAW, RULE OR REGULATION BY SUCH EMPLOYER.
  2. ANY ACT OF RETALIATION UNDER THIS SECTION SHALL SUBJECT AN EMPLOYER
TO THE CIVIL PENALTIES UNDER SECTION EIGHT HUNDRED SIXTY-ONE-E  OF  THIS
ARTICLE, OR TO A PRIVATE CAUSE OF ACTION, OR BOTH.

S. 5847--E                          6

  S 2. Paragraph (b) of subdivision 1 of section 511 of the labor law is
amended by adding a new subparagraph 1-b to read as follows:
  (1-B)  AS AN EMPLOYEE IN THE CONSTRUCTION INDUSTRY UNLESS THE PRESUMP-
TION OF EMPLOYMENT CAN BE OVERCOME,  AS  PROVIDED  UNDER  SECTION  EIGHT
HUNDRED SIXTY-ONE-C OF THIS CHAPTER; OR
  S  3. The opening paragraph of subdivision 4 of section 2 of the work-
ers' compensation law, as amended by chapter 205 of the laws of 1993, is
amended to read as follows:
  "Employee" means a person engaged in one of the occupations enumerated
in section three OF THIS ARTICLE or who is in the service of an employer
whose principal business is that of carrying on or conducting a  hazard-
ous  employment  upon  the premises or at the plant, or in the course of
his OR HER employment away from  the  plant  of  his  OR  HER  employer;
"EMPLOYEE" SHALL ALSO MEAN FOR THE PURPOSES OF THIS CHAPTER ANY INDIVID-
UAL  PERFORMING  SERVICES  IN CONSTRUCTION FOR A CONTRACTOR WHO DOES NOT
OVERCOME THE PRESUMPTION OF EMPLOYMENT AS PROVIDED UNDER  SECTION  EIGHT
HUNDRED SIXTY-ONE-C OF THE LABOR LAW; "employee" shall also mean for the
purposes  of  this chapter civil defense volunteers who are personnel of
volunteer agencies sponsored or authorized by a local office under regu-
lations of the civil defense commission, to the extent of the provisions
of groups seventeen and nineteen; "employee" shall at the election of  a
municipal  corporation made pursuant to local law duly enacted also mean
a member of an auxiliary police organization authorized  by  local  law;
and  for the purposes of this chapter only a newspaper carrier under the
age of eighteen years as defined in section thirty-two  hundred  twenty-
eight  of  the  education  law,  and shall not include domestic servants
except as provided in section three of this chapter,  and  except  where
the employer has elected to bring such employees under the law by secur-
ing  compensation  in accordance with the terms of section fifty of this
chapter. The term "employee" shall not include persons who  are  members
of  a  supervised  amateur  athletic  activity  operated on a non-profit
basis, provided that said members are  not  also  otherwise  engaged  or
employed  by  any  person,  firm  or  corporation  participating in said
athletic activity, nor shall it include the spouse or minor child of  an
employer  who  is  a  farmer unless the services of such spouse or minor
child shall be engaged by said employer under  an  express  contract  of
hire  nor  shall it include an executive officer of a corporation who at
all times during  the  period  involved  owns  all  of  the  issued  and
outstanding stock of the corporation and holds all of the offices pursu-
ant  to  paragraph  (e) of section seven hundred fifteen of the business
corporation law or two executive officers of a corporation  who  at  all
times  during the period involved between them own all of the issued and
outstanding stock of such corporation and hold all such  offices  except
as  provided  in  subdivision  six of section fifty-four of this chapter
provided, however, that where there are  two  executive  officers  of  a
corporation each officer must own at least one share of stock, nor shall
it  include  a  self-employed  person  or  a partner of a partnership as
defined in section ten of the partnership law who is not covered under a
compensation insurance contract or a certificate  of  self-insurance  as
provided in subdivision eight of section fifty-four of this chapter, nor
shall it include farm laborers except as provided in group fourteen-b of
section  three  of  this chapter. If a farm labor contractor recruits or
supplies farm laborers for work on a farm, such farm laborers shall  for
the  purposes  of this chapter be deemed to be employees of the owner or
lessee of such farm.  The term "employee" shall not include baby sitters
as defined in subdivision three of section one  hundred  thirty-one  and

S. 5847--E                          7

subdivision  three of section one hundred thirty-two of the labor law or
minors fourteen years of  age  or  over  engaged  in  casual  employment
consisting  of  yard work and household chores in and about a one family
owner-occupied residence or the premises of a non-profit, non-commercial
organization,  not involving the use of power-driven machinery. The term
"employee" shall not include persons engaged  by  the  owner  in  casual
employment  consisting of yard work, household chores and making repairs
to or painting in and about a one-family owner-occupied  residence.  The
term "employee" shall not include the services of a licensed real estate
broker  or sales associate if it be proven that (a) substantially all of
the remuneration  (whether  or  not  paid  in  cash)  for  the  services
performed by such broker or sales associate is directly related to sales
or  other  output (including the performance of services) rather than to
the number of hours worked; (b) the services performed by the broker  or
sales  associate  are  performed pursuant to a written contract executed
between such broker or sales associate  and  the  person  for  whom  the
services are performed within the past twelve to fifteen months; and (c)
the  written  contract  provided  for  in paragraph (b) [herein] OF THIS
SUBDIVISION was not executed under duress  and  contains  the  following
provisions:
  S  4.  Notwithstanding any other provision of the law to the contrary,
the provisions of section 861-c of the labor law, as  added  by  section
one  of  this act, shall apply to and be utilized for all determinations
of a construction industry  individual's  employment  status  under  the
labor law and the workers' compensation law.
  S  5.  This  act  shall take effect on the sixtieth day after it shall
have become a law.

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5847--F
    Cal. No. 782

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 11, 2009
                               ___________

Introduced  by  Sens. ONORATO, FOLEY, ADDABBO, BRESLIN, KRUEGER, LARKIN,
  SAVINO, SCHNEIDERMAN, STACHOWSKI -- read twice  and  ordered  printed,
  and  when  printed to be committed to the Committee on Rules -- recom-
  mitted to the Committee on Labor in accordance  with  Senate  Rule  6,
  sec.  8  --  committee  discharged, bill amended, ordered reprinted as
  amended and recommitted to said committee -- reported  favorably  from
  said  committee  and  committed to the Committee on Codes -- committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee  --  reported  favorably  from  said  committee  and
  committed  to  the  Committee on Finance -- committee discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee  --  reported  favorably from said committee, ordered to first and
  second report,  ordered  to  a  third  reading,  amended  and  ordered
  reprinted,  retaining its place in the order of third reading -- again
  amended and ordered reprinted, retaining its place  in  the  order  of
  third  reading  --  again amended and ordered reprinted, retaining its
  place in the order of third reading

AN ACT to amend the labor law, in relation to  enacting  the  "New  York
  state  construction industry fair play act"; and to amend the workers'
  compensation law, in relation to the definition of employee

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The  labor law is amended by adding a new article 25-B to
read as follows:
                               ARTICLE 25-B
         THE NEW YORK STATE CONSTRUCTION INDUSTRY FAIR PLAY ACT
SECTION 861.   SHORT TITLE.
        861-A. LEGISLATIVE FINDINGS AND INTENT.
        861-B. DEFINITIONS.
        861-C. PRESUMPTION OF EMPLOYMENT IN THE CONSTRUCTION INDUSTRY.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11756-24-0
              

S. 5847--F                          2

        861-D. NOTICE TO PERSONS RECEIVING REMUNERATION FROM CONTRACTORS
                 AND SUBCONTRACTORS.
        861-E. VIOLATIONS AND PENALTIES.
        861-F. RETALIATION.
  S  861.  SHORT  TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
"THE NEW YORK STATE CONSTRUCTION INDUSTRY FAIR PLAY ACT".
  S 861-A. LEGISLATIVE FINDINGS AND INTENT. THE LEGISLATURE HEREBY FINDS
AND DECLARES THAT NEW YORK STATE'S CONSTRUCTION INDUSTRY IS EXPERIENCING
DANGEROUS LEVELS OF  EMPLOYEE  MISCLASSIFICATION  FRAUD.    UNSCRUPULOUS
EMPLOYERS  ARE INTENTIONALLY REPORTING EMPLOYEES AS INDEPENDENT CONTRAC-
TORS TO STATE AND FEDERAL AUTHORITIES OR WORKERS' COMPENSATION  CARRIERS
IN RECORD NUMBERS. IN ADDITION, THERE HAS BEEN AN EXPLOSION OF EMPLOYERS
WHO OPERATE IN THE UNDERGROUND ECONOMY AND FAIL TO REPORT ALL OR A SIZA-
BLE 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.
  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 CONSTRUCTING, RECONSTRUCTING, ALTERING,  MAIN-
TAINING,  MOVING, REHABILITATING, REPAIRING, RENOVATING OR DEMOLITION OF
ANY BUILDING, STRUCTURE, OR IMPROVEMENT, OR RELATING TO  THE  EXCAVATION
OF OR OTHER DEVELOPMENT OR IMPROVEMENT TO LAND.
  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  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.
  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 THE PERSON IS A SEPARATE BUSINESS ENTITY UNDER SUBDI-
VISION  TWO OF THIS SECTION OR ALL OF THE FOLLOWING CRITERIA ARE MET, IN
WHICH CASE THE PERSON SHALL BE AN INDEPENDENT CONTRACTOR:
  (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 USUAL COURSE OF BUSINESS
FOR WHICH THE SERVICE IS PERFORMED; AND
  (C)  THE  INDIVIDUAL IS CUSTOMARILY ENGAGED IN AN INDEPENDENTLY ESTAB-
LISHED TRADE, OCCUPATION, PROFESSION, OR BUSINESS THAT IS SIMILAR TO THE
SERVICE AT ISSUE.
  2. A BUSINESS ENTITY,  INCLUDING  ANY  SOLE  PROPRIETOR,  PARTNERSHIP,
CORPORATION  OR ENTITY THAT MAY BE A CONTRACTOR UNDER THIS SECTION SHALL

S. 5847--F                          3

BE CONSIDERED A SEPARATE BUSINESS ENTITY FROM THE CONTRACTOR  WHERE  ALL
THE FOLLOWING CRITERIA ARE MET:
  (A) THE BUSINESS ENTITY IS PERFORMING THE SERVICE FREE FROM THE DIREC-
TION  OR  CONTROL  OVER  THE  MEANS AND MANNER OF PROVIDING THE SERVICE,
SUBJECT ONLY TO THE RIGHT OF THE CONTRACTOR  FOR  WHOM  THE  SERVICE  IS
PROVIDED TO SPECIFY THE DESIRED RESULT;
  (B)  THE BUSINESS ENTITY IS NOT SUBJECT TO CANCELLATION OR DESTRUCTION
UPON SEVERANCE OF THE RELATIONSHIP WITH THE CONTRACTOR;
  (C) THE BUSINESS ENTITY HAS A SUBSTANTIAL INVESTMENT OF CAPITAL IN THE
BUSINESS ENTITY BEYOND ORDINARY TOOLS AND EQUIPMENT AND A PERSONAL VEHI-
CLE;
  (D) THE BUSINESS ENTITY OWNS THE CAPITAL GOODS AND GAINS  THE  PROFITS
AND BEARS THE LOSSES OF THE BUSINESS ENTITY;
  (E)  THE  BUSINESS  ENTITY MAKES ITS SERVICES AVAILABLE TO THE GENERAL
PUBLIC OR THE BUSINESS COMMUNITY ON A CONTINUING BASIS;
  (F) THE BUSINESS ENTITY INCLUDES SERVICES RENDERED ON A FEDERAL INCOME
TAX SCHEDULE AS AN INDEPENDENT BUSINESS OR PROFESSION;
  (G) THE BUSINESS ENTITY PERFORMS SERVICES FOR THE CONTRACTOR UNDER THE
BUSINESS ENTITY'S NAME;
  (H) WHEN THE SERVICES BEING PROVIDED REQUIRE A LICENSE OR PERMIT,  THE
BUSINESS  ENTITY OBTAINS AND PAYS FOR THE LICENSE OR PERMIT IN THE BUSI-
NESS ENTITY'S NAME;
  (I) THE BUSINESS ENTITY FURNISHES THE TOOLS AND EQUIPMENT NECESSARY TO
PROVIDE THE SERVICE;
  (J) IF NECESSARY, THE BUSINESS ENTITY HIRES ITS OWN EMPLOYEES  WITHOUT
CONTRACTOR  APPROVAL,  PAYS THE EMPLOYEES WITHOUT REIMBURSEMENT FROM THE
CONTRACTOR AND REPORTS THE EMPLOYEES' INCOME  TO  THE  INTERNAL  REVENUE
SERVICE;
  (K)  THE  CONTRACTOR  DOES  NOT  REPRESENT  THE  BUSINESS ENTITY AS AN
EMPLOYEE OF THE CONTRACTOR TO ITS CUSTOMERS; AND
  (L) THE BUSINESS ENTITY HAS THE RIGHT TO PERFORM SIMILAR SERVICES  FOR
OTHERS ON WHATEVER BASIS AND WHENEVER IT CHOOSES.
  3.  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, EXCEPT AS SET FORTH IN  PARA-
GRAPH (F) OF SUBDIVISION TWO OF THIS SECTION.
  4.  AN  INDIVIDUAL'S  ACT  OF SECURING WORKERS' COMPENSATION INSURANCE
WITH A CARRIER AS A SOLE PROPRIETOR, PARTNERSHIP OR OTHERWISE SHALL  NOT
BE BINDING ON ANY DETERMINATION UNDER THIS SECTION.
  5.  WHEN A BUSINESS ENTITY MEETS THE DEFINITION OF A SEPARATE BUSINESS
ENTITY PURSUANT TO SUBDIVISION TWO OF THIS SECTION, THE  SEPARATE  BUSI-
NESS  ENTITY  WILL  BE  CONSIDERED  A  CONTRACTOR  SUBJECT  TO  ALL  THE
PROVISIONS OF THIS ARTICLE IN REGARD TO THE CLASSIFICATION  OF  INDIVID-
UALS PERFORMING SERVICES FOR IT.
  S 861-D. NOTICE TO PERSONS RECEIVING REMUNERATION FROM CONTRACTORS AND
SUBCONTRACTORS. 1. EVERY CONTRACTOR SHALL POST IN A PROMINENT AND ACCES-
SIBLE  PLACE  ON  THE SITE WHERE THE CONSTRUCTION IS PERFORMED A LEGIBLE
STATEMENT, PROVIDED BY THE COMMISSIONER, THAT DESCRIBES THE RESPONSIBIL-
ITY OF INDEPENDENT CONTRACTORS TO PAY TAXES REQUIRED BY STATE AND FEDER-
AL LAW, THE RIGHTS OF EMPLOYEES TO WORKERS'  COMPENSATION,  UNEMPLOYMENT
BENEFITS,  MINIMUM  WAGE, OVERTIME AND OTHER FEDERAL AND STATE WORKPLACE
PROTECTIONS, AND THE PROTECTIONS AGAINST RETALIATION AND  THE  PENALTIES
IN THIS ARTICLE IF THE CONTRACTOR FAILS TO PROPERLY CLASSIFY AN INDIVID-
UAL  AS  AN EMPLOYEE. THIS NOTICE SHALL ALSO CONTAIN CONTACT INFORMATION
FOR INDIVIDUALS TO FILE COMPLAINTS  OR  INQUIRE  WITH  THE  COMMISSIONER

S. 5847--F                          4

ABOUT  EMPLOYMENT  CLASSIFICATION  STATUS.  THIS  INFORMATION  SHALL  BE
PROVIDED IN ENGLISH, SPANISH OR OTHER LANGUAGES REQUIRED BY THE  COMMIS-
SIONER.  THE  POSTED STATEMENT SHALL BE CONSTRUCTED OF MATERIALS CAPABLE
OF WITHSTANDING ADVERSE WEATHER CONDITIONS.
  2.  WITHIN  THIRTY  DAYS  OF  THE  EFFECTIVE DATE OF THIS ARTICLE, THE
COMMISSIONER SHALL CREATE THE NOTICE DESCRIBED  IN  SUBDIVISION  ONE  OF
THIS  SECTION  AND POST THE NOTICE ON THE DEPARTMENT'S WEBSITE FOR DOWN-
LOADING BY CONTRACTORS.
  3. CONTRACTORS WHO VIOLATE THIS SECTION SHALL BE SUBJECT  TO  A  CIVIL
PENALTY  OF  UP  TO  ONE  THOUSAND  FIVE  HUNDRED  DOLLARS  FOR  A FIRST
VIOLATION, AND UP TO FIVE THOUSAND DOLLARS FOR  A  SUBSEQUENT  VIOLATION
WITHIN A FIVE YEAR PERIOD.
  S  861-E.  VIOLATIONS  AND PENALTIES.   1. ANY CONTRACTOR WHO WILFULLY
FAILS TO PROPERLY CLASSIFY AN INDIVIDUAL  AS  AN  EMPLOYEE  AS  PROVIDED
UNDER SECTION EIGHT HUNDRED SIXTY-ONE-C OF THIS ARTICLE SHALL BE SUBJECT
TO  THE  CIVIL  AND  CRIMINAL PENALTIES PROVIDED UNDER THIS SECTION. THE
CIVIL PENALTIES SET FORTH IN THIS SECTION SHALL BE IMPOSED  AS  FOLLOWS:
BY  THE  COMMISSIONER WHERE SUCH PENALTY IS BASED ON A VIOLATION OF THIS
CHAPTER; BY THE CHAIR OF THE  WORKERS'  COMPENSATION  BOARD  WHERE  SUCH
PENALTY IS BASED ON A VIOLATION OF THE WORKERS' COMPENSATION LAW; AND BY
THE  COMMISSIONER  OF  TAX  AND  FINANCE WHEN SUCH PENALTY IS BASED ON A
VIOLATION OF THE TAX LAW, PROVIDED THAT NO MORE THAN ONE  CIVIL  PENALTY
UNDER  THIS SECTION MAY BE IMPOSED PER EMPLOYEE PER INCIDENT OF MISCLAS-
SIFICATION.
  (A) THE WORKERS' COMPENSATION BOARD SHALL PROVIDE A COPY OF ANY  ORDER
RELATING  TO  THE  MISCLASSIFICATION OF AN EMPLOYEE, THE INTENTIONAL AND
MATERIAL UNDERPAYMENT OR CONCEALMENT  OF  PAYROLL,  OR  THE  FAILURE  TO
SECURE WORKERS' COMPENSATION IN THE CONSTRUCTION INDUSTRY TO THE COMMIS-
SIONER AND COMMISSIONER OF TAXATION AND FINANCE NO LATER THAN SEVEN DAYS
AFTER THE ISSUANCE OF THE ORDER.
  (B)  NOTWITHSTANDING  THE  SECRECY  PROVISIONS  CONTAINED  IN ARTICLES
NINE-A AND TWENTY-TWO OF THE TAX LAW, THE  DEPARTMENT  OF  TAXATION  AND
FINANCE  SHALL PROVIDE A COPY OF ANY ASSESSMENT FOR FAILURE TO PAY BUSI-
NESS,  CORPORATE  OR  PERSONAL  INCOME  TAX  BY  AN  EMPLOYER   IN   THE
CONSTRUCTION INDUSTRY ARISING OUT OF THE MISCLASSIFICATION OF AN EMPLOY-
EE  TO  THE COMMISSIONER AND CHAIR OF THE WORKERS' COMPENSATION BOARD NO
LATER THAN SEVEN DAYS AFTER THE ISSUANCE OF THE ASSESSMENT.
  (C) UPON THE ISSUANCE OF AN ORDER OR DETERMINATION BY THE COMMISSIONER
FOR A VIOLATION AND PENALTIES UNDER THIS ARTICLE, THE COMMISSIONER SHALL
PROVIDE A COPY OF THE ORDER TO THE CHAIR OF  THE  WORKERS'  COMPENSATION
BOARD  AND  THE COMMISSIONER OF TAXATION AND FINANCE NO LATER THAN SEVEN
DAYS AFTER THE ISSUANCE OF THE ORDER.
  2. FOR THE PURPOSES OF THIS SECTION,  THE  TERM  "WILLFULLY  VIOLATES"
MEANS A CONTRACTOR KNEW OR SHOULD HAVE KNOWN THAT HIS OR HER CONDUCT WAS
PROHIBITED BY THIS SECTION.
  3.  ANY CONTRACTOR WHO WILLFULLY VIOLATES SECTION EIGHT HUNDRED SIXTY-
ONE-C OF THIS ARTICLE SHALL BE SUBJECT TO A CIVIL PENALTY OF UP TO TWEN-
TY-FIVE HUNDRED  DOLLARS  FOR  THE  FIRST  VIOLATION  PER  MISCLASSIFIED
EMPLOYEE  AND TO A CIVIL PENALTY OF UP TO FIVE THOUSAND DOLLARS FOR EACH
SUBSEQUENT VIOLATION PER MISCLASSIFIED EMPLOYEE WITHIN A FIVE YEAR PERI-
OD.
  4. IN ADDITION TO CIVIL PENALTIES, THE CRIMINAL PENALTIES IMPOSED ON A
CONTRACTOR WHO WILLFULLY VIOLATES THE PROVISIONS OF THIS  ARTICLE  SHALL
BE  A  MISDEMEANOR  AND  UPON  CONVICTION  SHALL BE PUNISHED FOR A FIRST
OFFENSE BY IMPRISONMENT FOR NOT MORE THAN THIRTY DAYS OR A FINE  NOT  TO
EXCEED  TWENTY-FIVE  THOUSAND  DOLLARS  AND  FOR A SUBSEQUENT OFFENSE BY

S. 5847--F                          5

IMPRISONMENT FOR NOT MORE THAN SIXTY DAYS OR A FINE NOT TO EXCEED  FIFTY
THOUSAND DOLLARS.
  5. IF THE CONTRACTOR IS A CORPORATION, ANY OFFICER OF SUCH CORPORATION
OR  SHAREHOLDER  WHO  OWNS  OR  CONTROLS  AT  LEAST  TEN  PERCENT OF THE
OUTSTANDING STOCK OF SUCH CORPORATION WHO KNOWINGLY PERMITS  THE  CORPO-
RATION TO WILLFULLY VIOLATE THE PROVISIONS OF THIS ARTICLE SHALL ALSO BE
IN VIOLATION OF THIS ARTICLE AND THE CIVIL AND CRIMINAL PENALTIES HEREIN
SHALL ATTACH TO SUCH OFFICER UPON CONVICTION.
  6.  ANY CONTRACTOR SUBJECT TO CIVIL PENALTIES UNDER THIS ARTICLE SHALL
ALSO BE SUBJECT TO ANY OTHER APPLICABLE PENALTIES OR  REMEDIES  PROVIDED
BY  LAW FOR FAILURE TO PAY ANY OTHER STATUTORY PAYMENT OR COVERAGE OBLI-
GATIONS, INCLUDING BUT NOT LIMITED TO, UNEMPLOYMENT INSURANCE,  WORKERS'
COMPENSATION  INSURANCE,  OR BUSINESS, CORPORATE OR PERSONAL INCOME TAX,
AS FOLLOWS:
  (A) FOR FAILURE TO  PAY  UNEMPLOYMENT  INSURANCE  TAX,  THE  PENALTIES
IMPOSED BY SECTION FIVE HUNDRED SEVENTY OF THIS CHAPTER.
  (B)  FOR  INTENTIONAL  AND  MATERIAL  UNDERSTATEMENT OR CONCEALMENT OF
PAYROLL OR FAILURE TO SECURE WORKERS' COMPENSATION INSURANCE, THE PENAL-
TIES IMPOSED BY PARAGRAPH (D) OF SUBDIVISION ONE OF SECTION FIFTY-TWO OF
THE WORKERS' COMPENSATION LAW, AND FOR FAILURE TO KEEP A TRUE AND  ACCU-
RATE  RECORD  PURSUANT TO SECTION ONE HUNDRED THIRTY-ONE OF THE WORKERS'
COMPENSATION LAW, THE PENALTIES OF SECTION ONE HUNDRED THIRTY-ONE OF THE
WORKERS' COMPENSATION LAW.
  (C) FOR FAILURE TO PAY BUSINESS, CORPORATE OR PERSONAL INCOME TAX, THE
PENALTIES IMPOSED BY SECTION SIX HUNDRED EIGHTY-FIVE  AND  ONE  THOUSAND
EIGHTY-FIVE OF THE TAX LAW.
  7.  ANY  CONTRACTOR OR ANY OFFICER OR SHAREHOLDER WHO OWNS OR CONTROLS
AT LEAST TEN PERCENT OF THE OUTSTANDING STOCK OF SUCH  CORPORATION  THAT
HAS BEEN CONVICTED OF A MISDEMEANOR SHALL BE SUBJECT TO DEBARMENT AND BE
INELIGIBLE  TO  SUBMIT  A BID ON OR BE AWARDED ANY PUBLIC WORKS CONTRACT
WITH THE STATE, ANY MUNICIPAL CORPORATION, PUBLIC  BENEFIT  CORPORATION,
PUBLIC  AUTHORITY OR PUBLIC BODY FOR A PERIOD OF UP TO ONE YEAR FROM THE
DATE OF SUCH CONVICTION OR FINAL DETERMINATION, OR UP TO FIVE  YEARS  IN
THE EVENT OF ANY SUBSEQUENT VIOLATION.
  8.  ANY  SUBSTANTIALLY  OWNED  AFFILIATED  ENTITY  OF A CONTRACTOR, AS
DEFINED BY PARAGRAPH G OF SUBDIVISION FIVE OF SECTION TWO HUNDRED TWENTY
OF THIS CHAPTER, SHALL BE SUBJECT TO THE  SAME  CIVIL  PENALTY  PROVIDED
UNDER THIS ARTICLE FOR A VIOLATION OF SUCH PROVISION.
  9.  ANY PENALTIES IMPOSED UNDER THIS SECTION BY THE COMMISSIONER SHALL
BE APPEALED TO THE INDUSTRIAL BOARD OF APPEALS IN ACCORDANCE WITH  ARTI-
CLE  THREE  OF THIS CHAPTER. ANY PENALTIES IMPOSED UNDER THIS SECTION BY
THE WORKERS' COMPENSATION BOARD OR COMMISSIONER OF TAXATION AND  FINANCE
SHALL BE APPEALED IN THE SAME MANNER AS THE UNDERLYING VIOLATION.
  10.  NOTHING  IN  THIS  SECTION  SHALL LIMIT THE AVAILABILITY OF OTHER
REMEDIES AT LAW OR IN EQUITY FOR A VIOLATION OF THIS ARTICLE.
  11. ANY FEE OR PENALTY ASSESSED FOR A VIOLATION OF THIS ARTICLE  SHALL
BE DEPOSITED INTO THE DEPARTMENT'S FEE AND PENALTY ACCOUNT.
  S  861-F.  RETALIATION.  1.  IT  IS A VIOLATION OF THIS ARTICLE FOR AN
EMPLOYER OR ANY AGENT OF ANY EMPLOYER, TO RETALIATE THROUGH DISCHARGE OR
IN ANY OTHER MANNER AGAINST ANY PERSON IN THE TERMS OF CONDITIONS OF HIS
OR HER EMPLOYMENT FOR EXERCISING ANY RIGHTS GRANTED UNDER  THIS  ARTICLE
FOR:
  (A)  MAKING,  OR  THREATENING  TO  MAKE,  A  COMPLAINT TO AN EMPLOYER,
CO-WORKER OR TO A PUBLIC BODY THAT RIGHTS GUARANTEED UNDER THIS  ARTICLE
HAVE BEEN VIOLATED;

S. 5847--F                          6

  (B)  CAUSING  TO BE INSTITUTED ANY PROCEEDING UNDER OR RELATED TO THIS
ARTICLE; OR
  (C)  PROVIDING  INFORMATION  TO, OR TESTIFYING BEFORE, ANY PUBLIC BODY
CONDUCTING AN INVESTIGATION, HEARING OR INQUIRY INTO ANY SUCH  VIOLATION
OF  A LAW, RULE OR REGULATION BY SUCH EMPLOYER.  NOTHING IN THIS SECTION
SHALL LIMIT THE  COMMISSIONER'S  AUTHORITY  UNDER  SECTION  TWO  HUNDRED
FIFTEEN OF THE LABOR LAW, OR ANY OTHER STATUTE.
  2. ANY ACT OF RETALIATION UNDER THIS SECTION SHALL SUBJECT AN EMPLOYER
TO  THE  CIVIL PENALTIES UNDER SECTION EIGHT HUNDRED SIXTY-ONE-E OF THIS
ARTICLE, OR TO A PRIVATE CAUSE OF ACTION, OR BOTH.
  S 2. Paragraph (b) of subdivision 1 of section 511 of the labor law is
amended by adding a new subparagraph 1-b to read as follows:
  (1-B) AS AN EMPLOYEE IN THE CONSTRUCTION INDUSTRY UNLESS THE  PRESUMP-
TION  OF  EMPLOYMENT  CAN  BE  OVERCOME, AS PROVIDED UNDER SECTION EIGHT
HUNDRED SIXTY-ONE-C OF THIS CHAPTER; OR
  S 3. The opening paragraph of subdivision 4 of section 2 of the  work-
ers' compensation law, as amended by chapter 205 of the laws of 1993, is
amended to read as follows:
  "Employee" means a person engaged in one of the occupations enumerated
in section three OF THIS ARTICLE or who is in the service of an employer
whose  principal business is that of carrying on or conducting a hazard-
ous employment upon the premises or at the plant, or in  the  course  of
his  OR  HER  employment  away  from  the  plant of his OR HER employer;
"EMPLOYEE" SHALL ALSO MEAN FOR THE PURPOSES OF THIS CHAPTER ANY INDIVID-
UAL PERFORMING SERVICES IN CONSTRUCTION FOR A CONTRACTOR  WHO  DOES  NOT
OVERCOME  THE  PRESUMPTION OF EMPLOYMENT AS PROVIDED UNDER SECTION EIGHT
HUNDRED SIXTY-ONE-C OF THE LABOR LAW; "employee" shall also mean for the
purposes of this chapter civil defense volunteers who are  personnel  of
volunteer agencies sponsored or authorized by a local office under regu-
lations of the civil defense commission, to the extent of the provisions
of  groups seventeen and nineteen; "employee" shall at the election of a
municipal corporation made pursuant to local law duly enacted also  mean
a  member  of  an auxiliary police organization authorized by local law;
and for the purposes of this chapter only a newspaper carrier under  the
age  of  eighteen years as defined in section thirty-two hundred twenty-
eight of the education law, and  shall  not  include  domestic  servants
except  as  provided  in section three of this chapter, and except where
the employer has elected to bring such employees under the law by secur-
ing compensation in accordance with the terms of section fifty  of  this
chapter.  The  term "employee" shall not include persons who are members
of a supervised amateur  athletic  activity  operated  on  a  non-profit
basis,  provided  that  said  members  are not also otherwise engaged or
employed by any  person,  firm  or  corporation  participating  in  said
athletic  activity, nor shall it include the spouse or minor child of an
employer who is a farmer unless the services of  such  spouse  or  minor
child  shall  be  engaged  by said employer under an express contract of
hire nor shall it include an executive officer of a corporation  who  at
all  times  during  the  period  involved  owns  all  of  the issued and
outstanding stock of the corporation and holds all of the offices pursu-
ant to paragraph (e) of section seven hundred fifteen  of  the  business
corporation  law  or  two executive officers of a corporation who at all
times during the period involved between them own all of the issued  and
outstanding  stock  of such corporation and hold all such offices except
as provided in subdivision six of section  fifty-four  of  this  chapter
provided,  however,  that  where  there  are two executive officers of a
corporation each officer must own at least one share of stock, nor shall

S. 5847--F                          7

it include a self-employed person or  a  partner  of  a  partnership  as
defined in section ten of the partnership law who is not covered under a
compensation  insurance  contract  or a certificate of self-insurance as
provided in subdivision eight of section fifty-four of this chapter, nor
shall it include farm laborers except as provided in group fourteen-b of
section  three  of  this chapter. If a farm labor contractor recruits or
supplies farm laborers for work on a farm, such farm laborers shall  for
the  purposes  of this chapter be deemed to be employees of the owner or
lessee of such farm.  The term "employee" shall not include baby sitters
as defined in subdivision three of section one  hundred  thirty-one  and
subdivision  three of section one hundred thirty-two of the labor law or
minors fourteen years of  age  or  over  engaged  in  casual  employment
consisting  of  yard work and household chores in and about a one family
owner-occupied residence or the premises of a non-profit, non-commercial
organization, not involving the use of power-driven machinery. The  term
"employee"  shall  not  include  persons  engaged by the owner in casual
employment consisting of yard work, household chores and making  repairs
to  or  painting in and about a one-family owner-occupied residence. The
term "employee" shall not include the services of a licensed real estate
broker or sales associate if it be proven that (a) substantially all  of
the  remuneration  (whether  or  not  paid  in  cash)  for  the services
performed by such broker or sales associate is directly related to sales
or other output (including the performance of services) rather  than  to
the  number of hours worked; (b) the services performed by the broker or
sales associate are performed pursuant to a  written  contract  executed
between  such  broker  or  sales  associate  and the person for whom the
services are performed within the past twelve to fifteen months; and (c)
the written contract provided for in  paragraph  (b)  [herein]  OF  THIS
SUBDIVISION  was  not  executed  under duress and contains the following
provisions:
  S 4. Notwithstanding any other provision of the law to  the  contrary,
the  provisions  of  section 861-c of the labor law, as added by section
one of this act, shall apply to and be utilized for  all  determinations
of  a  construction  industry  individual's  employment status under the
labor law and the workers' compensation law, but not the tax law.
  S 5. This act shall take effect on the sixtieth  day  after  it  shall
have become a law.