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This entry was published on 2014-09-22
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Presumption of employment in the construction industry
§ 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
subdivision 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
established 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
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 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

(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
business 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

(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
premiums with respect to an individual's wages shall not be considered
in making a determination under this section, except as set forth in
paragraph (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
business entity will be considered a contractor subject to all the
provisions of this article in regard to the classification of
individuals performing services for it.