🏗️ What is the Fair Play Act?
The New York State Construction Industry Fair Play Act is a New York labor law that:
👉 Prevents employers from improperly classifying workers as independent contractors instead of employees
It was passed because many construction workers were being:
- Paid “off the books”
- Denied overtime
- Denied workers’ comp
- Denied unemployment insurance
- Misclassified as 1099 contractors to avoid payroll taxes
⚖️ Key Rule: Workers Are Presumed to Be Employees
Under this law:
Anyone working for a construction contractor is legally presumed to be an employee — NOT an independent contractor — unless strict criteria are met.
This is the opposite of how many businesses try to treat workers.
✅ The 3-Part “ABC-Style” Test
A construction worker can only be treated as an independent contractor if ALL THREE of the following are true:
- Freedom from Control
The worker is free from direction and control in how they perform the job. - Work Outside the Usual Business
The work performed is not part of the hiring company’s normal business. - Independent Business
The worker has their own independently established trade or business.
If even one of these is missing ➜
➡️ The worker must be classified as an employee.
🚨 What the Law Targets
The Fair Play Act mainly targets:
- Construction companies paying workers on Form 1099
- Subcontractor arrangements used to avoid payroll taxes
- Misclassification used to avoid:
- Minimum wage
- Overtime
- Workers’ Compensation
- Unemployment insurance
- Payroll taxes
💰 Penalties for Employers
If a company misclassifies workers:
- Fines start around $2,500 per worker
- Can go up to $5,000 per worker for repeat violations
- Employers may owe:
- Back wages
- Benefits
- Payroll taxes
- Intentional violations can even lead to criminal charges
General contractors may also be held jointly liable for violations committed by subcontractors.
📌 Who Does It Apply To?
The Act applies to:
- Construction contractors
- Subcontractors
- Independent tradespeople
- Day laborers
- LLCs or sole proprietors working on construction jobs
Even if:
- They have an LLC
- They sign an independent contractor agreement
- They receive a 1099
They may still legally be an employee under this law.
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