Summary of New York AB 8107:  Preventing Misclassification as Independent Contractors

For full text of the bill, click here.

New York AB 8107 would amend the state labor law to ensure that workers do not lose workplace rights and benefits through misclassification as independent contractors.  If passed, an independent contractor would have to meet all of the following criteria:

1. Maintain a separate business with their own office, equipment, materials and other facilities;
2. Hold or apply for a federal employer identification number;
3. Operate under contracts to perform specific services or work for specific amounts of money and control the means of performing the services or work;
4. Incur the main expenses related to the service or work that the individual performs under the contract;
5. Be responsible for the satisfactory completion of work or services that the individual contracts to perform and be liable for failure to complete the work or service;
6. Receive compensation for work or service performed on a commission or per job or competitive bid basis and not on any other basis;
7. Realize a profit or suffer a loss under contracts to perform work or service;
8. Have continuing or recurring business liabilities or obligations; and
9. Succeed or fail depending on the relationship of business receipts to expenditures.

In addition, the amendment would prohibit a finding of independent contractor status if any other person, corporation, partnership, association or other entity “maintains substantial control over the manner in which such individual performs his or her assigned duties and retains a significant financial stake in such individual’s earnings.”

The proposed law also prohibits waiving or changing the definition of independent contractor.

This law is broader than many tests attempting to “clarify” the distinction between “independent contractor” and “employee,” in that it focuses on whether the individual is in business for her or himself, and not on the putative employer’s control over the worker.  Some of the listed factors are potentially manipulable by employers intent on misclassifying their employees, but this is a solid list.