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Misclassification Law Goes Into Effect

This Tuesday New York’s Construction Industry Fair Play Act, aimed at combatting worker misclassification, went into effect.  A press release issued by the New York State Department of Labor stated:

“Studies show that in any given year, employers misclassify from 15 to 25 percent of construction workers in New York State as independent contractors.  Employee misclassification happens when an employer labels workers wrongly as independent contractors or pays them completely off the books and thus denies them benefits and protections under State and Federal law.  Misclassification hurts workers. It deprives the government of tax revenue. Further, this form of fraud undercuts legitimate employers who classify their workers correctly.”

It is hoped that by clarifying exactly when a worker may or may not be classified as an independent contractor, and by imposing stricter civil and criminal penalties for employers who misclassify their employees as such, this new law may begin to curb this practice which has been such a flagrant problem within the construction industry for years.

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