N.Y. Labor Law § 862-d: Violations and penalties

§ 862-d. Violations and penalties. 1. Any commercial goods

transportation contractor who willfully fails to properly classify an

individual as an employee as provided under section eight hundred

sixty-two-b of this article shall be subject to the civil and criminal

penalties provided under this section. The civil penalties set forth in

this section shall be imposed as follows: by the commissioner where such

penalty is based on a violation of this chapter; by the chair of the

workers' compensation board where such penalty is based on a violation

of the workers' compensation law; and by the commissioner of taxation

and finance when such penalty is based on a violation of the tax law,

provided that no more than one civil penalty under this section may be

imposed per employee per incident of misclassification.

(a) The workers' compensation board shall provide a copy of any order

relating to the misclassification of an employee, the intentional and

material underpayment or concealment of payroll, or the failure to

secure workers' compensation in the commercial goods transportation

industry to the commissioner and commissioner of taxation and finance no

later than seven days after the issuance of the order.

(b) Notwithstanding the secrecy provisions contained in articles

nine-A and twenty-two of the tax law, the department of taxation and

finance shall provide a copy of any assessment for failure to pay

business, corporate or personal income tax by an employer in the

commercial goods transportation industry arising out of the

misclassification of an employee to the commissioner and chair of the

workers' compensation board no later than seven days after the issuance

of the assessment.

(c) Upon the issuance of an order or determination by the commissioner

for a violation and penalties under this article, the commissioner shall

provide a copy of the order to the chair of the workers' compensation

board and the commissioner of taxation and finance no later than seven

days after the issuance of the order.

2. For the purposes of this section, the term "willfully violates"

means a commercial goods transportation contractor knew or should have

known that his or her conduct was prohibited by this section.

3. Any commercial goods transportation contractor who willfully

violates section eight hundred sixty-two-b of this article shall be

subject to a civil penalty of up to twenty-five hundred dollars for the

first violation per misclassified employee and to a civil penalty of up

to five thousand dollars for each subsequent violation per misclassified

employee within a five year period.

4. In addition to civil penalties, the criminal penalties imposed on a

commercial goods transportation contractor who willfully violates the

provisions of this article shall be a misdemeanor and upon conviction

shall be punished for a first offense by imprisonment for not more than

thirty days or a fine not to exceed twenty-five thousand dollars and for

a subsequent offense by imprisonment for not more than sixty days or a

fine not to exceed fifty thousand dollars.

5. If the commercial goods transportation contractor is a corporation,

any officer of such corporation or shareholder who owns or controls at

least ten percent of the outstanding stock of such corporation who

knowingly permits the corporation to willfully violate the provisions of

this article shall also be in violation of this article and the civil

and criminal penalties herein shall attach to such officer upon

conviction.

6. Any commercial goods transportation contractor subject to civil

penalties under this article shall also be subject to any other

applicable penalties or remedies provided by law for failure to pay any

other statutory payment or coverage obligations, including but not

limited to, unemployment insurance, workers' compensation insurance, or

business, corporate or personal income tax, as follows:

(a) for failure to pay unemployment insurance tax, the penalties

imposed by section five hundred seventy of this chapter.

(b) for intentional and material understatement or concealment of

payroll or failure to secure workers' compensation insurance, the

penalties imposed by paragraph (d) of subdivision one of section

fifty-two of the workers' compensation law, and for failure to keep a

true and accurate record pursuant to section one hundred thirty-one of

the workers' compensation law, the penalties of section one hundred

thirty-one of the workers' compensation law.

(c) for failure to pay business, corporate or personal income tax, the

penalties imposed by section six hundred eighty-five and one thousand

eighty-five of the tax law.

7. Any commercial goods transportation contractor or any officer or

shareholder who owns or controls at least ten percent of the outstanding

stock of such corporation that has been convicted of a misdemeanor shall

be subject to debarment and be ineligible to submit a bid on or be

awarded any public works contract with the state, any municipal

corporation, public benefit corporation, public authority or public body

for a period of up to one year from the date of such conviction or final

determination, or up to five years in the event of any subsequent

violation.

8. Any substantially owned affiliated entity of a commercial goods

transportation contractor, as defined by paragraph g of subdivision five

of section two hundred twenty of this chapter, shall be subject to the

same civil penalty provided under this article for a violation of such

provision.

9. Any penalties imposed under this section by the commissioner shall

be appealed to the industrial board of appeals in accordance with

article three of this chapter. Any penalties imposed under this section

by the workers' compensation board or commissioner of taxation and

finance shall be appealed in the same manner as the underlying

violation.

10. Nothing in this section shall limit the availability of other

remedies at law or in equity for a violation of this article.

11. Any fee or penalty assessed for a violation of this article shall

be deposited into the department's fee and penalty account.