BILL NUMBER: S4296

SPONSOR: PARKER
 
TITLE OF BILL:  An act to amend the labor law, in relation to clarify-
ing the definition of a "commission salesperson"

 
PURPOSE:

To clarify the definition of who is a "Commission salesman" under the
New York labor law.

 
SUMMARY OF PROVISIONS:

Amends the following:

Section 1 of the bill amends section 6 of the New York Labor Law § 190,
which defines a "commission salesman" as any employee whose (1) princi-
pal activity is the selling of any goods, wares, merchandise, services,
real estate, securities, insurance or any article or thing and whose
earnings are based in whole or in part on commissions, (2) not free to
work at his/ her own convenience, (3) constrained to a fixed schedule,
              

(4) not free engage in other employment, and (5) on the employer's
payroll and receives fringe benefits.

 
JUSTIFICATION:

An increasingly popular business model in the United States is for
employers to hire their workers as independent contractors rather than
employees. This has created uncertainty over this question: Under what
circumstance is it proper for an employer to classify his/her worker as
an  independent contractor rather than an employee and vice-versa?

In the state of New York, this inquiry is especially unclear in the
salesperson context. The obscurity stems from the two definitions that
New York's labor law sets forth defining a salesperson: Whereby, a
"commission salesmen" is an employee; yet, a "sales representative" is
an independent contractor. These two statutes are seemingly similar in
substance yet have subtle differences, which are difficult to decipher
when applied under the current statute. However, if an employer misclas-
sifies one of his/her workers, it could me an significant unforeseen
financial costs and liability exposure for both the hiring party and the
worker. Therefore, the following factors will provide guidance for busi-
nesses, employers, and workers.

 
LEGISLATIVE HISTORY:

2017-18: S.6215 - REFERRED TO LABOR
2015-16: New Bill

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.