New York Independent Contractor Case

To be considered an independent contractor, and thus not an employee, an individual must meet and maintain all ten of the following conditions:

1. Obtain a Federal Employer Identification Number from the Federal Internal Revenue Service (IRS) or have filed business or self-employment income tax returns with the IRS based on work or service performed the previous calendar year;
2. Maintain a separate business establishment from the hiring business;
3. Perform work that is different than the primary work of the hiring business and perform work for other businesses;
4. Operate under a specific contract, and is responsible for satisfactory performance of work and is subject to profit or loss in performing the specific work under such contract, and be in a position to succeed or fail if the business’s expenses exceed income.
5. Obtain a liability insurance policy (and if appropriate, workers’ compensation and disability benefits insurance policies) under its own legal business name and federal employer identification number;
6. Have recurring business liabilities and obligations;
7. If it has business cards or advertises, the materials must publicize itself, not another entity;
8. Provide all equipment and materials necessary to fulfill the contract;
9. Control the time and manner in which the work is to be done; and
10. The individual works under his/her own operating permit, contract or authority.

In the new case, the claimant was a cleaner who worked in a number of buildings owned by the employer. The claimant was paid a fixed a mount per week by check. According to the claimant, he worked for the alleged employer exclusively. Most telling, the claimant was told “where to work as well as what to do.” According to testimony, “[we] instructed and supervised the claimant, [and] would ordinarily contact him if he was required to do specific cleaning work.”

The Board found that the claimant was an employee and not an independent contractor. The Appellate Court agreed, stating “relevant considerations include the right to control the work, the method of payment, the right to discharge and the relative nature of the work; however, no single factor is dispositive.” Id, citing Matter of Park v. Lee, 862 N.Y.S2d 199 (2008).

Greg Lois is the managing partner of LOIS LLC, a 19-attorney law firm dedicated to defending employers and carriers in New York and New Jersey workers' compensation claims. Greg is the author of a popular series of "Handbooks" on workers' compensation, and is the co-author of the 2016 Lexis-Nexis New Jersey Workers' Compensation Practice Guide. Greg can be reached at 201-880-7213 or glois@lois-llc.com