Form Nys-50 - Employer'S Guide To Unemployment Insurance, Wage Reporting, And Withholding Tax Page 7
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52NYS-50 (1/14) Page 7 of 52
Exclusions applicable to all employers except nonprofit
with the person engaged to render services and request a determination
of their status. Failure to report and pay the contributions due on the
organizations, governmental entities, and Indian tribes
earnings of persons on the assumption that they are independent
• Daytime students in elementary or secondary schools. (However,
contractors may result in additional assessments and interest if their
contributions may be required on students’ earnings; see Students on
services are later determined to be employment.
page 8.)
Further information is available in our pamphlet, Independent
• Children under the age of 14.
I
Contractors,
A 318.14.
• Babysitters under the age of 18 at the home of the employer.
• Golf caddies.
New York State Construction Industry Fair Play Act
• Persons under the age of 21 performing casual services consisting of
The New York State Construction Industry Fair Play Act (Chapter 418
yard work and household chores about a residence.
of the Laws of 2010) became effective on October 26, 2010. This
law created a new standard for determining whether a worker is an
Exclusions applicable only to nonprofit organizations
employee or independent contractor in the construction industry and
• Duly ordained ministers in the exercise of their ministry.
provides penalties for employers who fail to properly classify their
employees.
• Members of religious orders in the performance of their duties.
Standard: Individuals working for an employer in the construction
• Lay members elected or appointed to an office within the discipline of
industry will be presumed to be employees unless they meet all three
a bona fide church and engaged in religious functions.
criteria below. The individual must be:
• Persons employed at a place of religious worship as a caretaker or for
(1) free from control and direction in performing the job, both under
the performance of duties of a religious nature.
contract and in fact;
• Persons receiving rehabilitative services in a facility conducted for
(2) performing services outside of the usual course of business for the
such purposes.
company; and
• Persons given remunerative work in a facility conducted for
(3) engaged in an independently established trade, occupation, or
the purpose of providing such work for persons of impaired physical or
business that is similar to the service they perform.
mental capacity.
• Inmates of a custodial or penal institution working for a nonprofit
Separate business entity: The law also contains a twelve-part test for
organization.
determining when a sole proprietor, partnership, corporation, or other
entity will be considered a separate business entity from the contractor
• Participants in Youth Service Programs under certain conditions.
for whom it is providing a service. If an entity meets all of the 12 criteria,
Exclusions applicable only to governmental entities and
it will not be considered an employee of the contractor but will instead
be a separate business that is itself subject to the law regarding its own
Indian tribes
employees.
• Elected officials.
Agencies covered: The standard for determining employment applies
• Members of legislative bodies or the judiciary.
to determinations under the Labor Law (including labor standards,
• Individuals hired on a temporary basis in case of fire, snow,
prevailing wage law, and unemployment insurance) and the Workers’
earthquake, flood, or similar emergency.
Compensation Law. The penalties provided by the law apply to
• Inmates of custodial or penal institutions.
determinations of misclassification under the Labor Law, Workers’
Compensation Law, and the New York State Tax Law.
• Officials in major nontenured, policy-making, or advisory positions.
Penalties: An employer that willfully violates the Fair Play Act by failing
• Individuals in policy making or advisory positions whose official duties
to properly classify its employees will be subject to civil penalties of up
do not require more than 8 hours a week to perform.
to a $2,500 fine per misclassified employee for a first violation and up to
• Members of the State National Guard or Air National Guard, except a
$5,000 per misclassified employee for a second violation within a five-
person who renders such services as a regular state employee.
year period.
Independent contractors
Employers may also be subject to criminal prosecution (a misdemeanor)
for violations of the Fair Play Act, with a penalty of up to 30 days in jail,
Independent contractors are excluded from unemployment insurance
up to a $25,000 fine, and debarment from Public Work for up to one
coverage. These are persons who are actually in business for
year for a first offense. Subsequent misdemeanor offenses would be
themselves and hold themselves available to the general public to
punishable by up to 60 days in jail, up to a $50,000 fine, and debarment
perform services.
from performing Public Work for up to five years.
While the statute does not define an independent contractor,
Posting: Construction industry employers must post a notice about the
unemployment insurance case law has held that common law tests
Fair Play Act in a prominent and accessible place on the job site. Failure
of master and servant must be applied in making a determination of
to post the notice can result in penalties of up to $1,500 for a first offense
whether services rendered by an individual are in the capacity of an
and up to $5,000 for a second offense. A poster may be downloaded at
employee or an independent contractor. Under these tests, all factors
or can be ordered by calling (518) 485-8589.
concerning the relationship between the two parties must be taken
into consideration to determine if the party contracting for the services
Contact us: If you have any questions concerning the Fair Play
exercises, or has the right to exercise, supervision, direction, or control
Act or if you wish to report suspected worker misclassification,
over the party performing the services. If the circumstances demonstrate
please contact the State Labor Department at 1 866 435-1499 or
either the exercise of, or the right to exercise, such supervision,
dol.misclassified@labor.ny.gov. The full text of the Fair Play Act is
direction, and control, it must be held that the services rendered are
posted on the Department of Labor Web site at .
employment.
Since matters concerning the status of persons as employees or
independent contractors are often complex, it is recommended that
employers write to the Department of Labor, Liability and Determination
Section (see Unemployment insurance issues — Where can I find the
answers? on page 46) furnishing complete details of the relationship
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