New York state passes new worker classification law
Employee classification can be a contentious issue for workers, businesses and the court system. The benefits of classifying someone as an independent contractor, like flat pay rates and the lack of obligation to track employee attendance and time worked, can entice management to make the wrong decision and leave the company open to fines, penalties and litigation.
New York state recently passed a law focusing on employees of companies that move commercial goods, called the Commercial Goods Transportation Industry Fair Play Act, according to legal news source Mondaq. The act presupposes that anyone working for such a company is an employee and therefore subject to the Fair Labor Standards Act.
A study that led to the act's creation and passing found a higher-than-usual misclassification rate in the trucking industry and the wrongful categorization of more than 700,000 employees in the state overall.
Independent contractor status is recognized and regulated under the FLSA. However, those working under such a designation have to meet a multi-part test that includes the length of time a contractor works for a company, the lack of direct control or supervision, opportunities for profit and loss and more.
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