Construction misclassification soon to end

New York State Senator George Onorato and chairman of the Senate Standing Committee on Labor, announced today, July 2, that final approval has been given by the State Senate and Assembly to push through legislation to crack down on employee misclassification in the construction industry. The legislation will also prevent the draining of tens of millions of state tax revenue into the state’s underground economy.

“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,” said Senator Onorato in the press release. Onorato continued to say that they are just one pen stroke away from ending the practice.

“Particularly in light of these tough economic times, we cannot continue to turn a blind eye to employer behavior that robs our state of badly needed revenues,” he says. The new legislation is expected to provide $92.3 million is savings each year from lost unemployment taxes and workers’ compensation assessments and would be named the “New York State Construction Industry Fair Play Act.”

The Act would assume that all construction workers would be considered employees, unless they met all three specific criteria, which would classify them as independent contractors. Secondly, the Act would protect them from retaliation for reporting industry violations and allow for penalties against the construction firms that knowingly allowed violations to occur.

When construction employees are misclassified, they are denied their basic labor protections, such as unemployment insurance and workers’ compensation. Correcting this issue will not just protect workers, but will also bring additional revenue back into the state.

Photo courtesy of Angmokio