A new law in New York settles a dispute over reclassification of independent contractors, including owner-operators.
Gov. Andrew Cuomo signed a bill into law that is supposed to ensure owner-operators doing business in the state maintain their independent status and aren’t labeled as employees. Previously S5867, the new law takes effect March 11.
Employment status has been in question at the statehouse since 2010. The Teamsters got legislation introduced that claimed port truckers and delivery drivers, such as FedEx and UPS drivers, “are often improperly classified as independent contractors.”
OOIDA and the New York State Motor Truck Association opposed the change, which was reintroduced at the statehouse during the 2013 legislative session. The groups cautioned that the change was misguided and could result in a lot of business packing up and leaving the state.
Spurred by the concerns of truckers, state lawmakers approved an amended version of the bill that won’t run off independent contractors.
NYSMTA President Kendra Hems said at the time that the changes that were made should be able to protect independent contractors in the state.
The bill signed by Cuomo specifies that independent contractors can either own or lease their own equipment. Truckers also could choose to work for one carrier without sacrificing their independent status.
“At the end of the day I think we were able to come up with language that will allow true independent contractors to operate in New York state,” Hems previously told Land Line.
The new rule requires trucking companies to offer unemployment insurance and workers compensation to previously misclassified employees. Operations that misclassify employees would face significant penalties.
First-time offenders would face civil penalties of up to $2,500 per misclassified employee. Subsequent misclassifications within a five-year period would result in up to $5,000 fines. Criminal penalties also apply.
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