Both houses in Albany have passed legislation sponsored by state Senator George Onorato that cracks down on the practice of employee misclassification in the construction industry. Misclassification leads to millions of dollars of state tax revenue going uncollected year after year.

Onorato (D–Astoria), a former labor union official who heads the senate’s Labor Committee, stated: “It is very clear that action must be taken to stop unscrupulous employers from misclassifying workers as ‘independent contractors’, a practice that costs the state at least $90 million a year, and that hurts both workers and honest employers.” Now with both houses having passed his bill and Governor David Paterson expected to sign it into law, “We are just a pen stroke away from bringing an end to this unfortunate practice,” Onorato added. The veteran lawmaker also pointed out that “particularly in these tough economic times, we cannot continue to turn a blind eye to employer behavior that robs our state of badly needed revenue”.

Onorato estimated, “When fully implemented, this legislation is expected to provide the state with up to $92.3 million a year in savings from lost unemployment taxes and workers’ compensation assessments.” Onorato said that under his New York State Construction Industry Fair Play Act, all construction industry workers would be presumed to be employees unless they meet three specific criteria that would lead to their classification as an independent contractor:

•Able to perform a job without control and/or direction from an employer.

•Service to the employer performed infrequently or rarely, necessitating an employer’s having to bring in an outside contractor and

•Engaged in an independent trade and generally provides services to several companies rather than to a single employer.

The bill also provides workers with notice of their classification status, protects them from retaliation for reporting violations and imposes penalties on employers and corporate officers who knowingly allow violations to occur. (click on link to read full story)