In drafting 1099-based independent contractor protocols and agreements for clients in New York, Berenson LLP’s attorneys continue to find a concerning misunderstanding in the industry as to how the New York State Construction Industry Fair Play Act (the “Act”) applies to contractors.
Hopefully, many home improvement contractors now know that the Act creates an assumption that subcontractors are employees, and not independent contractors. Put another way, the Act assumes that a contractor paying an installer is complying with all New York and federal employment and tax laws (such as providing workers’ compensation coverage and making all required withholdings and deductions from installer payroll).
The Act requires that a contractor post a specific notice in a prominent place which advises workers of their rights under state and federal law. The notice must be provided in English and Spanish. Companies that violate the notice posting requirement are subject to a civil penalty of up to $1,500 for a first violation and up to $5,000 for a subsequent violation within a five-year period.
What seems to be misunderstood is that this posting requirement applies to both 1099-based independent contractors and W2 employees. In other words – if you operate in New York, you better get this poster up – even if you don’t have 1099-based labor.
For a complete discussion of this and other 2014 hot button topics impacting the safety and profitability of remodelers, join us for our annual Home Improvement Legal Seminar at the PGA Resort in Palm Beach Gardens on January 30-31, 2014.