New York State developed the NY State Construction Industry Fair Play Act to reduce levels of employee misclassification and fraud; predominantly in the construction industry. NY State Dept of Labor discovered employers in both the transportation industry and construction were intentionally reporting employees as “independent contractors” to state and federal authorities or their workers’ compensation carriers in huge names. Further, there was a huge increase in employers who simply failed to report a high percentage of their employees.
Unfortunately, any business who “willfully” fails to properly classify an individual as an employee is subject to civil and criminal penalties up to $2,500 for the first violation per misclassified employee, up to $5,000 for each subsequent violation per misclassified employee within a 5 year period. In addition to civil penalties, the criminal penalties imposed on the business owner who willfully misclassifies will be a misdemeanor. Upon conviction, punishment for a first offense may $25,000 or imprisonment for up to 30 days. For subsequent offenses, a fine may reach up to $50,000 or imprisonment for up to 60 days.
Folks, there is a lot at stake here. Gone are the days where you can skirt the rules. Both the authorities and the “employees” have too much information. You work so hard to build a business. Short cuts only lead to dead ends.
If you really want to understand the nuance in the NY State Construction Industry Fair Play Act we suggest you download our E-Book by CLICKING HERE.
Still have questions? Still want more info? Contact a risk advisor today at 914-357-8444.
