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This entry was published on 2014-09-22
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SECTION 862-B
Presumption of employment in the commercial goods transportation industry
Labor (LAB) CHAPTER 31, ARTICLE 25-C
§ 862-b. Presumption of employment in the commercial goods
transportation industry. 1. Any person performing commercial goods
transportation services for a commercial goods transportation contractor
shall be classified as an employee of the commercial goods
transportation contractor unless payment for such services is reported
on a Federal Income Tax form 1099 if required by law and either 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,
firm, corporation, limited liability company, association or other legal
entity that may also be a commercial goods transportation contractor
under this section shall be considered a separate business entity from
the commercial goods transportation 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 commercial goods transportation
contractor for whom the service is provided to specify the desired
result or federal rule or regulation;

(b) the business entity is not subject to cancellation or destruction
upon severance of the relationship with the commercial goods
transportation contractor;

(c) the business entity has a substantial investment of capital in the
business entity, including but not limited to ordinary tools and
equipment;

(d) the business entity owns or leases the capital goods and gains the
profits and bears the losses of the business entity;

(e) the business entity may make its services available to the general
public or others not a party to the business entity's written contract
referenced in paragraph (g) of this subdivision in the business
community on a continuing basis;

(f) the business entity provides services reported on a Federal Income
Tax form 1099, if required by law;

(g) the business entity performs services for the commercial goods
transportation contractor pursuant to a written contract, under the
business entity's name, specifying their relationship to be as
independent contractors or separate business entities;

(h) when the services being provided require a license or permit, the
business entity pays for the license or permit in the business entity's
name or, where permitted by law, pays for reasonable use of the
commercial goods transportation contractor's license or permit;

(i) if necessary, the business entity hires its own employees without
the commercial goods transportation contractor's approval, subject to
applicable qualification requirements or federal or state laws, rules or
regulations, and pays the employees without reimbursement from the
commercial goods transportation contractor;

(j) the commercial goods transportation contractor does not require
that the business entity be represented as an employee of the commercial
goods transportation contractor to its customers; and

(k) 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 commercial goods transportation
contractor subject to all the provisions of this article in regard to
the classification of individuals performing services for it.