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The Rigged Apple: Task Force Finds 133,000 New York Workers Were Misclassified in 2014

NY Attorney General Schneiderman

NY Attorney General Schneiderman

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In its first report, a newly created task force to combat employee misclassification in the state of New York revealed a successful year of winning back unpaid wages for the state and its workers.  The New York Joint Enforcement Task Force on Employee Misclassification was created by the enactment of the New York State Commercial Goods Transportation Industry Fair Play Act, which went into law on April 10th, 2014.

Findings from the report include:

New York Task Force members in 2014 conducted over 12,000 audits and investigations, resulting in detection of employee misclassification involving over 133,000 workers. Those and other enforcement efforts in 2014 in New York culminated in the discovery of $316 million in unreported wages, leading to assessments of $40.4 million in unemployment insurance contributions. Since 2007, joint enforcement activities in New York have identified made unemployment insurance assessments on nearly $2.1 billion in unreported wages.

The report also provided a list of the “top dozen” industries and businesses that had “highest incidence of worker misclassification” in the state in 2014.  The top dozen include:

Professional, Scientific and Technical Services;
• Construction of Buildings;
• Food Services and Drinking Places;
• Publishing Industries;
• Administrative and Support Services;
• Specialty Trade Contractors;
• Ambulatory Health Care Services;
• Personal and Laundry Services:
• Performing Arts, Spectator Sports, and Related Industries;
• Educational Services;
• Motion Picture and Sound Recording Industries; and
• Merchant Wholesalers and Nondurable Goods.

As Independent Contractor Compliance notes, New York launched its efforts in 2007, before many states recognized the severity of employee misclassification:

New York has been at the forefront of independent contractor misclassification since 2007 when the Governor established the Joint Enforcement Task Force on Employee Misclassification. As reported in our blog post of September 16, 2014, New York was one of 19 states that received grants totaling $10.2 million in federal funds from the U.S. Department of Labor to increase the capabilities of state unemployment insurance tax programs to identify instances where employers improperly classify employees as independent contractors or fail to report wages paid to workers.

New York has also been active in passing legislation designed to curtail independent contractor misclassification in industries where it is perceived to be prevalent, enacting the Construction Industry Fair Play Act in 2010, as described in our blog post of September 2, 2010, and (as mentioned above) the Commercial Goods Transportation Industry Fair Play Act in 2014.

To read more about the steps taken to fight misclassification by the Joint Task Force, check out their report in its entirety.


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