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Hope on the Horizon for NY’s Misclassified Workers?

Truck is unloaded at a job site on Gold Street in Brooklyn where a group of Latino construction workers classified as “independent contractors” were deprived of their pay.

New York, NY – Before trade unionists intervened on their behalf earlier this month, more than 40 Latino construction workers classified as “independent contractors” and routinely paid out of a plastic bag at worksites in Manhattan and Brooklyn, felt like they had nowhere to turn when their boss decided to withhold more $89,000 in wages. But such is life for working men and women too often misclassified as “independent contractors.” 

Employers can’t seem to get enough of the handy “independent contractor”designation, much in the same way they adore the new NLRB rule that effectively torpedoes “joint employer”classifications. Both are legislative tricks that benefit bosses by further stacking the deck against workers. 

The independent contractor designation allows employers to side-step a whole raft of labor rights and protections normally afforded regular employees. These labor rights and protections include minimum wage & overtime guarantees; paid sick leave; paid family leave; anti-discrimination and anti-retaliation safeguards; Workers’ Compensation and unemployment  Insurance; and prescribed rest and meal breaks. 

“I do think that the problem is getting worse,” freelance writer Janet Burns told a recent workers’ roundtable advocating for passage of a Fair Play in Employment Act. “There is a growing or greater number of misclassified workers, and I imagine that is for various reasons.”

The Fair Play in Employment Act seeks to clear up the too often dubious misclassification of employees as independent contractors through the administration of a simple and straight forward “ABC test.”

The NY Do It Right Employment Classification Test [DIRECT] Coalition — a group of labor unions, grassroots organizations and other worker allies advocating for a Fair Play in Employment Act — sponsored the roundtable at the Legal Aid Society and says utilizing an ABC test would create a “clear and predictable independent contractor test for businesses and workers.”

California, Massachusetts, New Jersey and Vermont already utilize ABC tests for wage and hour laws. Another 26 states use ABC tests in unemployment insurance law.

The criteria for establishing whether a worker can be correctly classified as an independent contractor is as follows: 

A – Free from control and direction in how they operate in their day to day job. B – Performing services that are outside an employer’s usual course of business. C – Engaging in an independent trade, occupation, profession or business, or otherwise meet the factors to be a separate business entity. 

According to advocates, workers who don’t pass the ABC test would be clearly defined as employees and afforded all the basic labor standards of that distinction — wage and hour protections, health and safety standards, workers compensation and unemployment insurance.

The “plastic bag scenario,” and wage theft that Latino construction workers classified as independent contractors experienced earlier this month, is by no means endemic to that particular industry alone. 

“My impression is that over the past few decades there has been a movement in that direction across the U.S.,” Burns continued. “Some companies certainly have been aggressively aiming for that even before the gig economy and these app and platform companies were so massive.”

There are some 150,000 New Yorkers presently working as low-wage independent contractors for app-based outfits like Uber, Lyft, Handy, Glamsquad, et al. But some 700,000 more working as maids, housekeepers, childcare providers, retail workers and building service workers are often also misclassified as independent contractors when they are clearly employees.

In New York City, 2 in 3 are people of color. Statewide, the full-time median income for low-paid independent contractors is $20,000. One in 5 workers do not have health insurance. Another 1 in 4 are on Medicaid.

Other roundtable participants — a nail salon technician, domestic worker, app-based driver, app-based courier and a former bakery truck driver — all maintained that they worked as employees but were misclassified as independent contractors. 

“As a business owner, if you can find a way to diminish your payout, you’re  gonna do it because it’s more money that you make,” ex-trucker Clayton Brown said. “It’s [also] less responsibly for them giving us a title that makes it seem attractive — but really doesn’t work in our favor.”

In 2010, New York State put the Construction Industry Fair Play Act on the books utilizing its own ABC test. And The experience of the aforementioned Latino construction workers not withstanding — a recently-released report from the New School Center for New York City Affairs examining low-paid gig and independent contract work across the state — says the overall incidence of independent contractor misclassification in the construction industry fell 14-percent over the last decade, while the number of payroll employees rose nine percent.

NY DIRECT says it’s time to help other workers across all industries.

Said domestic worker Daniela Contreras, “We don’t have anybody to turn to because we are considered independent contractors.”

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