Truck Driver Misclassification Continues to be a Concern in New York

Worker misclassification affects thousands of workers across New York State working in various industries. Studies show that misclassification rates are disproportionately high in the trucking industry, denying workers essential protections and benefits. Although New York’s Commerical Goods Transportation Industry Fair Play Act went into affect 11 years ago, worker misclassification in the trucking industry continues to be a pressing issue.

What is Misclassification?

Misclassification occurs when employers incorrectly treat workers as independent contractors when they should be classified as employees. This practice denies workers crucial protections including unemployment insurance, workers’ compensation coverage, and proper wage standards.

The Commercial Goods Transportation Industry Fair Play Act

New York State took decisive action through the Commercial Goods Transportation Industry Fair Play Act, which went into effect on April 10, 2014. This law sets clear rules for deciding if a commercial vehicle driver should be an employee or independent contractor. It applies to drivers who have a New York State driver’s license, transport goods in New York State, and drive commercial vehicles weighing over 10,000 pounds.

The Three-Part Test and Separate Business Entity Criteria

Under the law, drivers are considered employees unless they are a “separate business entity” or meet all three of these conditions:

1. They work independently without employer control
2. They do work that is different from the employer’s main business
3. They have their own established business doing similar work

A “separate business entity” can be a sole proprietorship, partnership, corporation, or other entity that meets the following requirements:

1. Working independently without employer control
2. Not losing the business when a contract ends
3. Owning significant business assets beyond basic tools
4. Owning or leasing equipment and taking on business profits and losses
5. Offering services to the public regularly
6. Using tax form 1099 when required
7. Having a written contract under the business name
8. Having their own licenses and permits
9. Hiring their own employees without employer approval
10. Not being presented as the employer’s employees
11. Being able to work for other clients

To be considered a separate business entity, all 11 criteria must be met.

The Impact of Misclassification

Recent reports indicate that more than 870,000 workers in New York State are misclassified, with significant concentrations in low-paying industries including transportation.

This misclassification prevents workers from accessing essential protections and benefits, including minimum wage protections, overtime pay, unemployment insurance, health insurance, and workers’ compensation.

By incorrectly classifying employees as independent contractors, employers deny these workers their rightful entitlements under labor laws, potentially leaving them vulnerable to financial hardship and without crucial safety nets in case of job loss or workplace injuries.

Protecting Your Rights

Misclassified workers have rights. These workers may pursue claims for unpaid wages, overtime, or discrimination, for instance, like other employees.