Fleet Management

New York Law Takes Effect over Driver Misclassification

March 10, 2014

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A new law takes effect Tuesday in New York state that some describe as the most stringent of any state when it comes to truck drivers and other transportation workers who have been wrongly classified as independent contractors rather than employees.

Gov. Andrew Cuomo signed the “New York Commercial Goods Transportation Industry Fair Play Act,” into law in January. It requires companies to pass one of two tests in its entirety to prove a worker is legally functioning as an independent contractor.

The first, known as the "ABC Test" after the three subsections of the law, has three requirements which all must be satisfied, according to DC Velocity. The second, known as a "separate business entity" test, contains 11 requirements that must be met to prove a worker is deemed a separate business and can be classified as a independent contractors.

The act contains harsh penalties for penalties for companies that intentionally violate the law.

The legislation received backing from both organized labor and the New York State Motor Truck Association, which represents fleets. Supporters say it addresses a long-running problem in the state, including the loss of tax dollars.

Similar legislation was passed in New Jersey but was vetoed by Gov. Chris Christie.

Read more about it from DC Velocity.

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