§ 862-D — Violations and penalties

§ 862-d. Violations and penalties. 1. Any commercial goods\ntransportation contractor who willfully fails to properly classify an\nindividual as an employee as provided under section eight hundred\nsixty-two-b of this article shall be subject to the civil and criminal\npenalties provided under this section. The civil penalties set forth in\nthis section shall be imposed as follows: by the commissioner where such\npenalty is based on a violation of this chapter; by the chair of the\nworkers' compensation board where such penalty is based on a violation\nof the workers' compensation law; and by the commissioner of taxation\nand finance when such penalty is based on a violation of the tax law,\nprovided that no more than one civil penalty under this section may be\nimposed per employee per incident of misclassification.\n (a) The workers' compensation board shall provide a copy of any order\nrelating to the misclassification of an employee, the intentional and\nmaterial underpayment or concealment of payroll, or the failure to\nsecure workers' compensation in the commercial goods transportation\nindustry to the commissioner and commissioner of taxation and finance no\nlater than seven days after the issuance of the order.\n (b) Notwithstanding the secrecy provisions contained in articles\nnine-A and twenty-two of the tax law, the department of taxation and\nfinance shall provide a copy of any assessment for failure to pay\nbusiness, corporate or personal income tax by an employer in the\ncommercial goods transportation industry arising out of the\nmisclassification of an employee to the commissioner and chair of the\nworkers' compensation board no later than seven days after the issuance\nof the assessment.\n (c) Upon the issuance of an order or determination by the commissioner\nfor a violation and penalties under this article, the commissioner shall\nprovide a copy of the order to the chair of the workers' compensation\nboard and the commissioner of taxation and finance no later than seven\ndays after the issuance of the order.\n 2. For the purposes of this section, the term "willfully violates"\nmeans a commercial goods transportation contractor knew or should have\nknown that his or her conduct was prohibited by this section.\n 3. Any commercial goods transportation contractor who willfully\nviolates section eight hundred sixty-two-b of this article shall be\nsubject to a civil penalty of up to twenty-five hundred dollars for the\nfirst violation per misclassified employee and to a civil penalty of up\nto five thousand dollars for each subsequent violation per misclassified\nemployee within a five year period.\n 4. In addition to civil penalties, the criminal penalties imposed on a\ncommercial goods transportation contractor who willfully violates the\nprovisions of this article shall be a misdemeanor and upon conviction\nshall be punished for a first offense by imprisonment for not more than\nthirty days or a fine not to exceed twenty-five thousand dollars and for\na subsequent offense by imprisonment for not more than sixty days or a\nfine not to exceed fifty thousand dollars.\n 5. If the commercial goods transportation contractor is a corporation,\nany officer of such corporation or shareholder who owns or controls at\nleast ten percent of the outstanding stock of such corporation who\nknowingly permits the corporation to willfully violate the provisions of\nthis article shall also be in violation of this article and the civil\nand criminal penalties herein shall attach to such officer upon\nconviction.\n 6. Any commercial goods transportation contractor subject to civil\npenalties under this article shall also be subject to any other\napplicable penalties or remedies provided by law for failure to pay any\nother statutory payment or coverage obligations, including but not\nlimited to, unemployment insurance, workers' compensation insurance, or\nbusiness, corporate or personal income tax, as follows:\n (a) for failure to pay unemployment insurance tax, the penalties\nimposed by section five hundred seventy of this chapter.\n (b) for intentional and material understatement or concealment of\npayroll or failure to secure workers' compensation insurance, the\npenalties imposed by paragraph (d) of subdivision one of section\nfifty-two of the workers' compensation law, and for failure to keep a\ntrue and accurate record pursuant to section one hundred thirty-one of\nthe workers' compensation law, the penalties of section one hundred\nthirty-one of the workers' compensation law.\n (c) for failure to pay business, corporate or personal income tax, the\npenalties imposed by section six hundred eighty-five and one thousand\neighty-five of the tax law.\n 7. Any commercial goods transportation contractor or any officer or\nshareholder who owns or controls at least ten percent of the outstanding\nstock of such corporation that has been convicted of a misdemeanor shall\nbe subject to debarment and be ineligible to submit a bid on or be\nawarded any public works contract with the state, any municipal\ncorporation, public benefit corporation, public authority or public body\nfor a period of up to one year from the date of such conviction or final\ndetermination, or up to five years in the event of any subsequent\nviolation.\n 8. Any substantially owned affiliated entity of a commercial goods\ntransportation contractor, as defined by paragraph g of subdivision five\nof section two hundred twenty of this chapter, shall be subject to the\nsame civil penalty provided under this article for a violation of such\nprovision.\n 9. Any penalties imposed under this section by the commissioner shall\nbe appealed to the industrial board of appeals in accordance with\narticle three of this chapter. Any penalties imposed under this section\nby the workers' compensation board or commissioner of taxation and\nfinance shall be appealed in the same manner as the underlying\nviolation.\n 10. Nothing in this section shall limit the availability of other\nremedies at law or in equity for a violation of this article.\n 11. Any fee or penalty assessed for a violation of this article shall\nbe deposited into the department's fee and penalty account.\n