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AG announces partnership to combat misclassification

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in Employment Law

Attorney General Eric T. Schneider­­man has signed a memorandum of understanding that allows his office to cooperate with both the federal and New York Departments of Labor to battle worker misclassification.

The three offices will share information in an effort to catch employers that wrongly classify employees as independent contractors.

The move puts New York on board a federal initiative launched in 2010 as part of the Obama administration’s “Middle Class Task Force.” To date, California, Colo­­rado, Con­­nec­­ti­­cut, Hawaii, Illinois, Iowa, Lou­­isi­­ana, Maryland, Massachusetts, Min­­ne­­sota, Missouri, Montana, Utah and Wash­­ington have signed similar agreements. The initiative claims to have collected $18.2 million in back wages for over 19,000 employees.

New York has been targeting contractor misclassification in the construction industry since 2010, when the New York State Construction Indus­­­try Fair Play Act was enacted. It imposes specific standards for independent contractors in the construction industry.

The new agreement allows New York officials to share data with the federal government and vice versa.

Employers should ensure their em­­ployee data for both federal and state taxing authorities mesh. Check each independent contractor relationship to ensure that it meets the Fair Labor Standard Act’s requirements. Some of the key issues include the degree of autonomy the contractor has to perform the work. Additionally, courts are far more likely to view a contractor as truly independent if the individual can pursue work with other companies.

When in doubt about contractor status, consult your attorney.

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