NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6236
SPONSOR: Brook-Krasny TITLE OF BILL:
An act to amend the labor law, in relation to the definition of "employ-
ee" for the purpose of the minimum wage act
PURPOSE OR GENERAL IDEA OF BILL:
To prevent employers from denying individuals due compensation, bene-
fits, leave, training, supervision,. access to facilities, or other
rights and privileges due to improper classification of employees as
independent contractors.
SUMMARY OF PROVISIONS:
Section 1 requires that "captive" representatives, those under a
contract or other binding obligation to sell products for one and only
one firm, be included in the New York State definition of an employee.
This is done by retaining the exclusion of outside salespeople from the
definition of employee only when such individuals are under a non-cap-
tive agreement.
Section 2 effective date.
EXISTING LAW:
Currently, the Labor Law excludes all outside salespeople from the defi-
nition of "employee." This is the case whether or not such individuals
are capable of choosing the firms under which they conduct business in
any given arrangement.
JUSTIFICATION:
The IRS (2014) defines independent contractors as individuals "who are
in an independent trade, business, or profession in which they offer
their services to the general public," while noting that services cannot
be said to be provided under this arrangement if they can be controlled
by an employer. According to Wood (2013), the classification of employ-
ees as independent. contractors has been a widespread labor practice
recently investigated by the United States Department of Labor and the
New York Attorney General. The Department of Labor has collected over
$18.2 million in back wages from 19,000 employees who were placed in the
wrong category. Other states have entered into deals with the DOT, to
crack down on this practice. The AFL-CIO (2014) suggests that millions
of employees have been hired as independent contractors by employers in
order to cut costs bypass federal anti-discrimination and collective
bargaining laws, exploit undocumented laborers, or avoid having, to pay
for health benefits.
This practice is widespread across industries, occurring at 30 percent
of firms audited by the Department of Labor; over 700,000 workers in New
York could be reasonably assumed to be misclassified. In 2007, one in
four New York City construction workers was -estimated by the Fiscal
Policy Institute to be operating under false terms. The federal govern-
ment was estimated to have lost $2.72 billion due to employees filed as
independent contractors in 2006 (AFL-CIO, 2014). These figures, indicate
that current labor laws contain glaring inadequacies which allow a
significant portion of New York's labor force to fall through the
cracks, often without legal recourse. Loopholes which allow individuals
to be treated as employees without receiving proper benefits and
protections must be closed by the legislature.
PRIOR LEGISLATIVE HISTORY:
2015: A.5169, referred to Labor
FISCAL IMPLICATIONS:
Increased revenue to the state due to increases in taxable wages and
unemployment insurance contributions. •
EFFECTIVE DATE:
This act shall take effect January first of the calendar year immediate-
ly following its enactment into law.
STATE OF NEW YORK
________________________________________________________________________
6236
2023-2024 Regular Sessions
IN ASSEMBLY
April 3, 2023
___________
Introduced by M. of A. BROOK-KRASNY, NOVAKHOV -- read once and referred
to the Committee on Labor
AN ACT to amend the labor law, in relation to the definition of "employ-
ee" for the purpose of the minimum wage act
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 5 of section 651 of the labor law, as amended
2 by chapter 481 of the laws of 2010, the opening paragraph as amended by
3 chapter 105 of the laws of 2019, is amended to read as follows:
4 5. "Employee" includes any individual employed or permitted to work by
5 an employer in any occupation, but shall not include any individual who
6 is employed or permitted to work: (a) on a casual basis in service as a
7 part time baby sitter in the home of the employer; (b) in a bona fide
8 executive, administrative, or professional capacity; (c) as an outside
9 [salesman] salesperson if such individual is not contractually bound to
10 any person, firm, corporation or other entity as a captive salesperson,
11 solicitor, agent, vendor, or other representative; (d) as a driver
12 engaged in operating a taxicab; (e) as a volunteer, learner or appren-
13 tice by a corporation, unincorporated association, community chest, fund
14 or foundation organized and operated exclusively for religious, charita-
15 ble or educational purposes, no part of the net earnings of which inures
16 to the benefit of any private shareholder or individual; (f) as a member
17 of a religious order, or as a duly ordained, commissioned or licensed
18 minister, priest or rabbi, or as a sexton, or as a christian science
19 reader; (g) in or for such a religious or charitable institution, which
20 work is incidental to or in return for charitable aid conferred upon
21 such individual and not under any express contract of hire; (h) in or
22 for such a religious, educational or charitable institution if such
23 individual is a student; (i) in or for such a religious, educational or
24 charitable institution if the earning capacity of such individual is
25 impaired by age or by physical or mental deficiency or injury; (j) in or
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10285-01-3
A. 6236 2
1 for a summer camp or conference of such a religious, educational or
2 charitable institution for not more than three months annually; (k) as a
3 staff counselor in a children's camp; (l) in or for a college or univer-
4 sity fraternity, sorority, student association or faculty association,
5 no part of the net earnings of which inures to the benefit of any
6 private shareholder or individual, and which is recognized by such
7 college or university, if such individual is a student; (m) by a feder-
8 al, state or municipal government or political subdivision thereof; (n)
9 as a volunteer at a recreational or amusement event run by a business
10 that operates such events, provided that no single such event lasts
11 longer than eight consecutive days and no more than one such event
12 concerning substantially the same subject matter occurs in any calendar
13 year, where (1) any such volunteer shall be at least eighteen years of
14 age, (2) a business seeking coverage under this paragraph shall notify
15 every volunteer in writing, in language acceptable to the commissioner,
16 that by volunteering his or her services, such volunteer is waiving his
17 or her right to receive the minimum wage pursuant to this article, and
18 (3) such notice shall be signed and dated by a representative of the
19 business and the volunteer and kept on file by the business for thirty-
20 six months; or (o) in the delivery of newspapers or shopping news to the
21 consumer by a person who is not performing commercial goods transporta-
22 tion services for a commercial goods transportation contractor within
23 the meaning of article twenty-five-C of this chapter. The exclusions
24 from the term "employee" contained in this subdivision shall be as
25 defined by regulations of the commissioner.
26 "Employee" also includes any individual employed or permitted to work
27 in any non-teaching capacity by a school district or board of cooper-
28 ative educational services except that the provisions of sections six
29 hundred fifty-three through six hundred fifty-nine of this article shall
30 not be applicable in any such case.
31 § 2. This act shall take effect on the first of January next succeed-
32 ing the date on which it shall have become a law.
