A06695 Summary:

BILL NO    A06695 

SAME AS    No same as 

SPONSOR    Perry (MS)

COSPNSR    

MLTSPNSR   Cook, Gottfried, Rivera, Robinson

Add S399-ggg, Gen Bus L

Creates a right of action in favor of a contractor whose bid is denied against
the winning bidder where such winning bidder knowingly misclassified one or
more of its employees as independent contractors to avoid paying workers'
compensation premiums on such employee; provides for payment of damages by the
winning bidder.
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A06695 Actions:

BILL NO    A06695 

03/30/2015 referred to labor
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A06695 Votes:

There are no votes for this bill in this legislative session.
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A06695 Memo:

BILL NUMBER:A6695

TITLE OF BILL:  An act to amend the general business law, in relation
to a right of action for violation of statutes in bids on construction
projects

PURPOSE OF THE BILL:  This bill is intended to encourage fairness in
competitive bidding by addressing problems created when bidders on
construction projects misclassify workers as independent contractors,
by establishing a private cause of action for legitimate contractors
against winning bidders who have misclassified employees in their bid
cost.

SUMMARY OF PROVISIONS:  This bill amends the general business law by
adding a new section 399-e which allows any person whose competitive
bid for a construction project was rejected, to bring an action for
damages against the winning bidder, if the winning bidder has violated
labor and workers' compensation laws by failing to pay taxes for any
reason including misclassifying a worker(s) in its bid cost. A winning
bidder who is a defendant in such an action shall not be liable for
damages if it is established that failure to comply was not a knowing
violation.

JUSTIFICATION:  By misclassifying workers as independent contractors
or subcontractors, employers avoid paying workers' compensation
premiums and employment and social security taxes, which illegally
reduces their labor costs, and thereby provides an unfair competitive
advantage over those employers who comply with the laws governing
employee classification. Not only does this abusive practice put
legitimate employers at a disadvantage in the highly competitive
construction industry, it further strains the workers' compensation
system by reducing the funds available to pay benefits. Moreover,
employee misclassification results in a loss of state and federal tax
revenues.

PRIOR LEGISLATIVE HISTORY:  2013-2014 A.4688 2011-2012 A.3258
2009-2010 A.3522 2006-2008 A.4098 2005-2006 A.3816 2003-2004 A.5231
2001-2002 A.3667 1999-2000 A.925 1997-1998 A.2681 1995-1996 A.9448

EFFECTIVE DATE: This act shall take effect immediately.
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A06695 Text:

                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________

                                         6695

                              2015-2016 Regular Sessions

                                 I N  A S S E M B L Y

                                    March 30, 2015
                                      ___________

       Introduced  by  M.  of  A. PERRY -- Multi-Sponsored by -- M. of A. COOK,
         GOTTFRIED, RIVERA, ROBINSON -- read once and referred to the Committee
         on Labor

       AN ACT to amend the general business law, in  relation  to  a  right  of
         action for violation of statutes in bids on construction projects

         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:

    1    Section 1. The general business law is amended by adding a new section
    2  399-ggg to read as follows:
    3    S 399-GGG.  FAIRNESS IN COMPETITIVE BIDDING. 1.  FOR  THE  PURPOSE  OF
    4  THIS SECTION:
    5    (A) THE TERM "PERSON" SHALL INCLUDE ANY INDIVIDUAL, FIRM, ASSOCIATION,
    6  PARTNERSHIP OR CORPORATION.
    7    (B)  THE TERM "CONSTRUCTION PROJECT" SHALL INCLUDE ANY PROJECT INVOLV-
    8  ING  THE  CONSTRUCTION,  MODERNIZATION,   IMPROVEMENT,   REHABILITATION,
    9  REPAIR,  MAINTENANCE,  REPLACEMENT  OR RENOVATION OF A BUILDING, ROAD OR
   10  STRUCTURE, OR ANY PORTION OF SUCH A  PROJECT  PERFORMED  PURSUANT  TO  A
   11  SUBCONTRACTING ARRANGEMENT.
   12    2. (A) ANY PERSON WHOSE COMPETITIVE BID FOR A CONSTRUCTION PROJECT HAS
   13  BEEN  REJECTED AND INSTEAD AWARDED TO ANOTHER PERSON MAY BRING AN ACTION
   14  FOR DAMAGES IN A COURT OF COMPETENT  JURISDICTION  AGAINST  THE  WINNING
   15  BIDDER  IF THE WINNING BIDDER HAS VIOLATED THE LABOR LAW OR THE WORKERS'
   16  COMPENSATION LAW BY FAILING TO PAY REQUIRED TAXES  OR  SECURE  INSURANCE
   17  PURSUANT  TO  SUCH  LAWS  FOR ANY REASON INCLUDING MISCLASSIFYING ONE OR
   18  MORE OF ITS WORKERS OTHER THAN AN EMPLOYEE IN ITS BID COST.
   19    (B) THE DETERMINATION WHETHER A WORKER ON A  CONSTRUCTION  PROJECT  IS
   20  PROPERLY  CLASSIFIED  AS  AN  EMPLOYEE  SHALL BE MADE IN ACCORDANCE WITH
   21  APPLICABLE STATE LAW.
   22    3. (A) A PARTY UNSUCCESSFULLY BIDDING ON A CONSTRUCTION  PROJECT  WILL
   23  BE  DEEMED  TO  HAVE  SUFFERED  AN  INJURY  BY VIRTUE OF NOT HAVING BEEN

        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD03284-02-5
       A. 6695                             2

    1  AWARDED THE BID, REGARDLESS OF WHETHER THE WINNING BIDDER REALIZES A NET
    2  PROFIT ON THE PERFORMANCE OF THE CONTRACT.
    3    (B)  A WINNING BIDDER WHO IS A DEFENDANT IN AN ACTION BROUGHT PURSUANT
    4  TO THIS SECTION SHALL NOT BE LIABLE FOR DAMAGES IF HE ESTABLISHES, AS AN
    5  AFFIRMATIVE DEFENSE, THAT THE FAILURE TO COMPLY WITH STATE LAWS  REQUIR-
    6  ING  EMPLOYERS  TO  PAY  STATE UNEMPLOYMENT INSURANCE OR SECURE WORKERS'
    7  COMPENSATION COVERAGE RESULTING FROM THE MISCLASSIFICATION OF AN EMPLOY-
    8  EE AS OTHER THAN AN EMPLOYEE IF THE BID WAS NOT A KNOWING VIOLATION.
    9    4. ANY PARTY WHO SUCCESSFULLY MAINTAINS AN ACTION UNDER  THIS  SECTION
   10  SHALL  BE  ENTITLED  TO DAMAGES FROM THE WINNING BIDDER IN AN AMOUNT NOT
   11  LESS THAN TEN PERCENT OF THE AMOUNT  OF  THE  SUCCESSFUL  BID,  OR  SUCH
   12  GREATER  AMOUNT  AS SHALL BE DETERMINED BY THE COURT, AND IN ADDITION TO
   13  ANY OTHER DAMAGES AWARDED, SHALL BE ENTITLED TO THE PAYMENT  OF  ALL  OF
   14  ITS COSTS AND REASONABLE ATTORNEYS' FEES IN BRINGING THE ACTION.
   15    S 2. This act shall take effect immediately.
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