What's happening
This bill updates the definition of "employee" under New York's minimum wage law, modifying exclusions for outside salespeople.
Why it matters
Narrows the exclusion for outside salespeople from minimum wage protections. The amendment specifies that only those outside salespeople who are truly independent (not "contractually bound" as captive agents or representatives) are excluded, potentially expanding minimum wage coverage to more sales workers.
Addresses the status of ‘captive’ salespersons. By defining that captive salespeople (those contractually tied to a specific company) are not excluded, the bill aims to ensure these workers receive minimum wage protections, addressing potential misclassification and exploitation.
May impact business hiring practices. Employers who rely on sales staff previously classified as exempt from minimum wage may need to reevaluate contracts and compensation structures, possibly increasing payroll costs or altering contractual arrangements.
Could set a precedent for worker classification debates. The bill reflects ongoing legal and policy debates around who qualifies as an “employee” versus an independent contractor, potentially influencing similar legislation or litigation in other sectors or states.
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Who cares
Headline styles
Include Captive Salespeople as Employees
Plain English, a few words. Used as the page title.
Sponsors
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History
- Referred to labor
- Referred to labor
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1534
2017-2018 Regular Sessions
IN SENATE
January 10, 2017
Introduced by Sen. AVELLA -- read twice and ordered printed, and when printed to be committed to the Committee on Labor
AN ACT to amend the labor law, in relation to the definition of "employee" for the purpose of the minimum wage act
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 5 of section 651 of the labor law, as amended by chapter 481 of the laws of 2010, and the opening paragraph as amended by chapter 503 of the laws of 2016, is amended to read as follows:
5. "Employee" includes any individual employed or permitted to work by an employer in any occupation, but shall not include any individual who is employed or permitted to work: (a) on a casual basis in service as a part time baby sitter in the home of the employer; (b) in labor on a farm; (c) in a bona fide executive, administrative, or professional capacity; (d) as an outside [salesman] salesperson if such individual is not contractually bound to any person, firm, corporation or other entity as a captive salesperson, solicitor, agent, vendor, or other representative; (e) as a driver engaged in operating a taxicab; (f) as a volunteer, learner or apprentice by a corporation, unincorporated association, community chest, fund or foundation organized and operated exclusively for religious, charitable or educational purposes, no part of the net earnings of which inures to the benefit of any private shareholder or individual; (g) as a member of a religious order, or as a duly ordained, commissioned or licensed minister, priest or rabbi, or as a sexton, or as a christian science reader; (h) in or for such a religious or charitable institution, which work is incidental to or in return for charitable aid conferred upon such individual and not under any express contract of hire; (i) in or for such a religious, educational or charitable institution if such individual is a student; (j) in or for such a religious, educational or charitable institution if the earning capacity of such individual is impaired by age or by physical or mental deficien-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00999-02-7
S. 1534 2
cy or injury; (k) in or for a summer camp or conference of such a religious, educational or charitable institution for not more than three months annually; (l) as a staff counselor in a children's camp; (m) in or for a college or university fraternity, sorority, student association or faculty association, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and which is recognized by such college or university, if such individual is a student; (n) by a federal, state or municipal government or political subdivision thereof; (o) as a volunteer at a recreational or amusement event run by a business that operates such events, provided that no single such event lasts longer than eight consecutive days and no more than one such event concerning substantially the same subject matter occurs in any calendar year, where (1) any such volunteer shall be at least eighteen years of age, (2) a business seeking coverage under this paragraph shall notify every volunteer in writing, in language acceptable to the commissioner, that by volunteering his or her services, such volunteer is waiving his or her right to receive the minimum wage pursuant to this article, and (3) such notice shall be signed and dated by a representative of the business and the volunteer and kept on file by the business for thirty-six months; or (p) in the delivery of newspapers or shopping news to the consumer by a person who is not performing commercial goods transportation services for a commercial goods transportation contractor within the meaning of article twenty-five-C of this chapter. The exclusions from the term "employee" contained in this subdivision shall be as defined by regulations of the commissioner.
"Employee" also includes any individual employed or permitted to work in any non-teaching capacity by a school district or board of cooperative educational services except that the provisions of sections six hundred fifty-three through six hundred fifty-nine of this article shall not be applicable in any such case.
§ 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the labor law, in relation to the definition of "employee" for the purpose of the minimum wage act
Purpose or general idea of bill
To prevent employers from denying individuals due compensation, benefits, leave, training, supervision, access to facilities, or other rights and privileges due to improper classification of employees as independent contractors.
Summary of provisions
Section 1 requires that "captive" representatives, those under a contract or other binding obligation to sell products for one and only one firm, be included in the New York State definition of an employee. This is done by retaining the exclusion of outside salespeople from the definition of employee only when such individuals are under a non-captive agreement.
Section 2 effective date.
Justification
The IRS (2014) defines independent contractors as individuals "who are in an independent trade, business, or profession in which they offer their services to the general public," while noting that services cannot be said to be provided under this arrangement if they can be controlled by an employer. According to Wood (2013), the classification of employees as independent contractors has been a widespread labor practice recently investigated by the United States Department of Labor and the New York Attorney General. The Department of Labor has collected over $18.2 million in back wages from 19,000 employees who were placed in the wrong category. Other states have entered into deals with the DOL to crack down on this practice. The AFL-CIO (2014) suggests that millions of employees have been hired as independent contractors by employers in order to cut costs bypass federal antidiscrimination and collective bargaining laws, exploit undocumented laborers, or avoid having to pay for health benefits.
This practice is widespread across industries, occurring at 30 percent of firms audited by the Department of Labor; over 700,000 workers in New York could be reasonably assumed to be misclassified. In 2007, one in four New York City construction workers was estimated by the Fiscal Policy Institute to be operating under false terms. The federal government was estimated to have lost $2.72 billion due to employees filed as independent contractors in 2006 (AFL-CIO, 2014). These figures indicate that current labor laws contain glaring inadequacies which allow a significant portion of New York's labor force to fall through the cracks, often without legal recourse. Loopholes which allow individuals to be treated as employees without receiving proper benefits and protections must be closed by the legislature.
Prior legislative history
2015-16: S.5016 (Avella)
Fiscal implications for state and local governments
Increased revenue to the state due to increases in taxable wages and unemployment insurance contributions 2002-2005 losses to New York State alone were estimated at $4 billion and $175 million respectively by a 2007 Cornell University study. EFFECTIVE DATE : This act shall take effect on the first of January next succeeding the date on which it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.