Transportation Act: Major Change in Law of Independent Contractors

A new bill that will significantly limit the use of independent contractors to deliver commercial goods in New York is awaiting signature by Governor Andrew Cuomo. Businesses that currently treat as independent contractors some or all drivers who deliver commercial goods to their customers will have to reclassify such individuals as employees unless the drivers meet one of two tests. Both of these tests are far more challenging to meet than the common law test currently used in New York to determine if a worker is an employee or independent contractor.

The New York State Commercial Goods Transportation Industry Fair Play Act (S5867-2013; A5237b) was passed with bipartisan support by both the Senate and Assembly. It purportedly was passed in view of the perceived misclassification of many drivers as independent contractors instead of employees. Instead of simply increasing the penalties for misclassification and/or enhancing regulatory enforcement of the current common law test for independent contractors (as some states have done), the New York Legislature chose to join a number of other states in enacting a new statutory test that will considerably reduce the number of independent contractors delivering commercial goods in New York.

Overcoming Presumption