2023 New York Laws › LAB - Labor › Article 25-B - The New York State Construction Industry Fair Play Act › 861-E - Violations and Penalties.

§  861-e.  Violations  and  penalties.  1. Any contractor who wilfully
fails to properly classify an individual  as  an  employee  as  provided
under section eight hundred sixty-one-c 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  tax  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  construction  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
construction  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 contractor knew or should have known that his or her conduct was
prohibited by this section.
3.  Any  contractor  who  willfully  violates  section  eight  hundred
sixty-one-c 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
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 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 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 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  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.