Legislative Memo

Lev Ginsburg
Director of Government Afairs
T 518.465.7511 x207


A.8237-F (John) / S.5847-F (Onorato)



The New York State Construction Industry Fair Play Act



June 24, 2010


The Business Council of New York State opposes A.8237-F (John) / S.5847-F (Onorato) which would create a presumption that all workers at a construction site are employees and given the definitions within the bill of "construction", "contractor" and "employer" may inappropriately extend the bill to any employer who hires a contractor to perform construction work. These definitions extend the reach of the bill far outside the scope of the construction sector, which is the focus of the legislation designed to combat employee misclassification as independent contractors in the construction industry. 

The Business Council appreciates that the bill's sponsors have worked closely with the construction industry to address concerns specific to their corporate organization and business practices, as the stated purpose of the bill is to apply to that sector. If enacted, however, this bill will establish a presumptive three part test intended for the construction industry but applicable to any business which under the definitions in the bill would be a "contractor" when engaging in the overly-broad definition of "construction"; hospitals, utilities, telecommunication firms, etc.

Unchanged through the many amendments made to the bill to address this over-reach beyond the construction sector are the definitions of contractor and construction. The bill defines construction as "constructing, reconstructing, altering, maintaining, moving, rehabilitating, repairing, renovation or demolition of any building, structure or improvement, or relating to the excavation of or other development or improvement to land." Contractor is defined as "any sole proprietor, partnership, firm, corporation, limited liability company, association or other legal entity pr emitted by law to do business within the state who engages in construction as defined in this article." "Employer" means "any contractor that employs individuals deemed employees under this article."

Without changes to these definitions to confine the scope of the bill to reflect the bill's title ("New York State Construction Industry Fair Play Act"), the provisions of this bill would have the unintended consequence of classifying an individual as an employee of a hospital, for instance, when that hospital has legitimately contracted for the purposes of building a new wing. While a hospital would bid for such services and retain a general contractor to carry out the construction tasks, the definitions are so broadly written as to include within them businesses for which construction is not their primary business activity, but must access the talents of the construction sector to carry out their business mission.

If the sponsors' intent is to more clearly define the roles and responsibilities within the construction sector, and a legitimate public policy imperative exists to do so, then the definitions within the bill ought to be confined, at most, to those six digit NAICS codes for which construction is their primary business activity. This unnecessary overreach will cause confusion and added administrative and contractual costs for businesses not the intended focus of the bill.

For these reasons, The Business Council opposes this bill and urges that it be amended to reflect solely the purposes intended in the bill's title.