With driver misclassification being an issue across the country, New York State has decided to put its foot down and prevent any further legal debate by passing a fairly clear-cut law on the matter. The new law took effect last week and would impose fines and even jail time on any company who knowingly misclassifies an employee as a contractor.
The law is aimed squarely at the likes of FedEx, UPS, and port truckers who have a history of using “independent contractors” who are employees in everything but name. Even though its focus is fairly narrow, the law applies to all “commercial goods transportation contractor[s],” not just those usual suspects.
The penalties for violating the new law can be a fine of up to $25,000 for the first offense and a $5,000 civil penalty per misclassified employee and/or up to 60 days in prison. Subsequent offenses can see the fine raised to $50,000, but even the initial punishment is harsh enough to make otherwise unscrupulous company owners take a closer look at how they should be classifying the drivers who haul their freight.
For those who are interested, the new law defines a driver as an employee unless the driver is a “separate business entity,” is not controlled by the carrier under contract or in reality, the service they’re performing is outside the normal course of business, and the driver is “customarily engaged in an independently established trade, occupation, profession, or business that is similar to the service at issue.” So basically, unless a driver is an owner operator who can come and go as they please, is hired because the carrier has a sudden influx of freight that they can’t deal with alone, and is often employed elsewhere, that driver should be an employee… and the carrier is going to have some legal trouble.
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Source: fleetowner
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About time
About time? How do you figure? I do think it’s fair to crack down on some of this, but I think the NY law goes WAY too far. You won’t get any argument out of me that most FedEx delivery drivers on a set route or even many “ICs” in an in-house lease/purchase program should be classified as employees, but this goes way beyond that. As an employee, if your employer gives you a lawful and reasonable task, you have to do it. An IC has the right to refuse loads and is in a business where there are considerable costs where they assume a lot of risk. The risk and ability to control your work environment can certainly be present even if/when running under a carrier’s authority. This is an agenda pushed by unions and backed by their political alleys, though I do think there are some who should be re-classified.
I think New York is on the right track. All Owner Operators should be able haul freight for anyone they want even though they are leasing a vehicle from that particular company. If I pay the bills pertaining to that vehicle. I shouldn’t not be bind to that company, in more often then none can not provide the freight or pay that would sustain the vehicle.
Im leased to central ref/swift. How is this going to affect me?
David it doesn’t apply to you unless you live in NY.
It looks to me that it applies to him if he drives in NY.
I don’t deal with them anymore, but I’m curious how this law would apply to lumpers?
I never understood why a driver had to pay someone AT the receiver to unload the freight THEY ordered?
Lumpers are a different racket altogether, I think thats total horseshit when its sometimes 3 or 4 hundred bucks for just a few pallets. Im sure the shipper and or reciver are gettinga cut of that. On that reclassification, anyone who bears the costs of the equipment qnd upkeep of said equipment is most definitely a stand alone business entity. As far as being able to move freely between carriers and agents, can you imagine the shitshow that would become? Its fine the way it is. I agree unions may play a small role in this legislation, but its uncle sam feeling hes not getting his.due through lost employee taxes.