New York State Commercial Goods Transportation Industry Fair Play Act

The New York State Commercial Goods Transportation Industry Fair Play Act became effective on April 10, 2014. The law creates a new standard for determining whether a driver of commercial vehicles who transports goods is an employee or independent contractor.

Standard: Individuals working for an employer in the commercial goods transportation industry will be presumed to be employees unless they meet all three criteria below. The individual must be:

free from control and direction in performing the job, both under contract and in fact;

performing services outside of the usual course of business for the company; and

engaged in an independently established trade, occupation, or business that is similar to the service they perform.

Separate business entity: The law also contains 11 criteria for determining when a sole proprietor, partnership, corporation, or other entity will be considered a separate business entity from the employer for whom it is providing a service. If an entity meets all of the 11 criteria, it will not be considered an employee of the employer but will instead be a separate business that is itself subject to the law regarding its own employees.

Penalties: An employer that willfully violates the Fair Play Act by failing to properly classify its employees will be subject to civil penalties of up to a $2,500 fine per misclassified employee for a first violation and up to $5,000 per misclassified employee for a second violation within a five-year period. Employers may also be subject to criminal prosecution (a misdemeanor) for violations of the Fair Play Act, with a penalty of up to 30 days in jail, up to a $25,000 fine, and debarment from Public Work for up to one year for a first offense. Subsequent misdemeanor offenses would be punishable by up to 60 days in jail, up to a $50,000 fine, and debarment from performing Public Work for up to five years.

Posting: Commercial goods transportation employers must post a notice about the Fair Play Act in a prominent and accessible place on the job site. Failure to post the notice can result in penalties of up to $1,500 for a first offense and up to $5,000 for a second offense. A poster may be downloaded at dol.ny.gov or can be ordered by calling the Employer Hotline toll-free at 1-888-899-8810.

Contact us: If you have any questions concerning the Fair Play Act or if you wish to report suspected worker misclassification, contact the New York State Department of Labor at 1-866-435-1499 or dol.misclassified@dol.ny.gov . The full text of the Fair Play Act is posted on the Department of Labor’s website.