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Our New York Worker Misclassification Attorney Discusses the Recent Yoga Vida Case

Yoga Vida is a yoga studio in New York City and it used two different types of instructors – staff instructors who were treated as employees and non-staff instructors who were treated as independents. As you can guess, the crux of the legal battle in this case was whether the non-staff instructors were correctly classified as contractors or should have been treated as employees. The Company was fortunate enough to have the resources to fight the long battle because the Unemployment Insurance Appeal Board and the Appellate Division both found that the non-staff instructors were misclassified. As a result, the Company was responsible for certain state payroll contributions and could have been responsible for providing employee benefits. The Company filed an appeal to the Court of Appeals.

On October 25, 2016, the Court of Appeals reversed the prior determinations and found that the non-staff instructors were actually independent contractors because, in part, the evidence did not find that the Company exercised control over the results produced and the means used to achieve the results. In short, the Court found that the Company did not exercise sufficient control and direction over the workers. Some of the key factors that the Court found compelling:

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Our Award Winning New York Employment Lawyer has spoken to employees and employers regarding the legal implications of non-payment of wages under federal and state law. One of the topic that arises often is whether an individual is personally liable for failure to pay wages in accordance with the law. The short answer, in general, is that an individual can be liable and considered an “employer” depending on the circumstances. A recent decision issued on November 10, 2016 in the Eastern District of New York, Awan v. Durrani, 14-CV-4562 (SIL) discussed this issue and relevant part of the decision is quoted below:

“[A]n employer may include an individual owner who exercises a sufficient level of operational control in the company’s employment of employees.” Kalloo v. Unlimited Mech. Co. of NY, Inc., 977 F. Supp. 2d 187, 201 (E.D.N.Y. (citing Irizarry v. Catsimatidis, 722 F.3d 99, 104-11 (2d Cir. 2013)); accord Switzoor,

2013 WL 4838826, at *6 (observing that “[a] person may not be held individually liable for a company’s FLSA violations simply because he was an executive of that company”). In determining whether an individual is an employer, courts consider “whether the individual: ‘(1) had the power to hire and fire employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.’” Gillianv. Starjam Rest. Corp., No. 10 Civ. 6056, 2011 WL 4639842, at *4 (S.D.N.Y. Oct. 4, 2011); see Gayle v. Harry’s Nurses Registry, Inc., No. 07-CV-4672, 2009 WL 605790, at *9 (E.D.N.Y. Mar. 9, 2009) (quoting Keun–Jae Moon v. Joon Gab Kwon, 248 F. Supp. 2d 201, 237 (S.D.N.Y. 2002) (quoting Donavan v. Agnew, 712 F.2d 1509 (1st Cir. 1983))) (“The overwhelming weight of authority is that a corporate officer with operational control of a corporation’s covered enterprise is an employer along with the corporation, jointly and severally liab[le] under the FLSA for unpaid wages.”).”

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Delivery company found to be liable for unemployment insurance contributions for misclassified independent contractors

Thumbnail image for Thumbnail image for Female.Freelancer.Employee.Checkbox.DPC.2.28.16.jpgSpeedy Media Associates LLC’s business was to deliver, among other things, newspapers, magazines and beverages. Speedy hired employees but it also used independent contractors to deliver its products. Although the independent contractors signed a written independent contractor agreement, the Department of Labor found that an independent contractor was eligible for unemployment insurance benefits. As part of that decision, the DOL found that Speedy was responsible for making unemployment insurance contributions for all similarly situated misclassified independent contractors going back three years. Speedy filed an appeal to the Appellate Division.
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Thumbnail image for Sex.Harassment.Angry.Man.Woman.Dollar.Photo.Club.1.17.16.jog.jpgOur Award Winning New York Employment Lawyer has represented clients in sexual harassment matters. These types of cases can be emotionally difficult and selecting the right attorney is important. This post discusses some background issues but feel free to call our office to learn your rights in your specific situation and see if we can help you fight back.

Recent headlines involving Fox News and other companies have once again placed the topic of sexual harassment in the headlines. It is unfortunate that sexual harassment remains such a prevalent issue in the workplace. It was recently reported that over 60% of women in the advertising field were subject to sexual harassment at some point in their career. It is not acceptable for your workplace to be filled with terms and conditions of sexual harassment.
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Thumbnail image for Thumbnail image for Female.Freelancer.Employee.Checkbox.DPC.2.28.16.jpgThe US Department of Labor has stated that the misclassification of employees as independent contractors is a primary enforcement initiative. In fact, the Secretary of the Labor Department, Thomas Perez, has referred to misclassification of workers as a “workplace fraud” and a practice that cheats the state out of revenue and deprives workers of basic rights including protection under employment discrimination statutes. As evidence of the government’s interest in stopping this practice, the federal agency’s budget in investigating misclassification cases is for FY 2016 is $14 million dollars and it has been working with many states as part of a joint task force. New York is part of the joint task force. The federal agency has recovered over 200 million dollars in 2014.

Employers and businesses in New York State should carefully evaluated their workforces to determine if they have properly classified their workers properly before an audit, investigation or lawsuit is commenced. Our NY Independent Contractor Misclassification Lawyer can assist you in your evaluation.
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FMLA Retaliation Claims Can Lead to Personal Liability of HR Managers

In a recent Second Circuit decision, Graziadio v. Culinary Institute of America, No. 15-888 cv (2d Cir. March 17, 2016), the court found that an HR manager could be personally liable under the Family and Medical Leave Act (FMLA), 26 U.S.C. Section 2601 et seq. This is an important decision for employees and employers to take note of. Handling FMLA claims are fact sensitive and legal counsel ideally should be involved from the outset. Our Award Winning New York Employment Lawyer helps employers and employees understand their rights and responsibilities in leave situations.
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Thumbnail image for Female.Freelancer.Employee.Checkbox.DPC.2.28.16.jpgMisclassification of workers in the healthcare field is a hot issue and it is an area where many practices make a misstep leading to potential exposure involving the Department of Labor (DOL). Many practices treat physicians, doctors, dentists, therapists or similar professionals as independent contractors instead of as employees. The New York State DOL can investigate your practice’s workforce classifications. Depending on the circumstances this can raise some legal concerns. The New York Court of Appeals decision, In Re Concourse Ophthalmology Associates P.C., 469 N.Y.S.2d 78 (1983) discusses the proper employment status for multiple ophthalmologists working in a professional corporation. The court issued the following test for medical providers in determining whether an employee-employer relationship exists for purposes of the Unemployment Insurance Law:
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DOL.Audit.in.Hand.Dollar.Photo.Club.1.18.16.jpgIf you are an employer in New York State, you are subject to the NY Unemployment Insurance Law except for minor exceptions. It is important to understand your obligations and responsibilities (ideally) before you are audited or sued by a former employee in an employment law claim, both of which can be distracting and expensive for a business. It has been estimated that NYS conducts over 10,000 audits per year and employers can face tens of thousands of dollars in monetary exposure. Our experienced Award Winning NYS Employment Law Attorney has counseled employers regarding preventative issues and defense issues. Contact our office for a confidential consultation to understand your situation. Possible areas of exposure can include misclassification of your workers (improperly treated an independent contractors), paying your employees off the books, etc. It is important to get counsel before you classify a worker because the consequences can often impact a group of employees and have significant penalties and fines. Furthermore, the audit can trigger additional governmental inquiries (IRS, NYS Labor Department Labor Standards Division which handles minimum wage and overtime complaints, etc.) In short, this is something companies should try to get in front of and if that is not possible – companies should examine their legal exposure quickly and make any corrections to their practices if necessary. Lack of knowledge or an innocent error is not necessarily a defense in a misclassification case.

AN EMPLOYER’S OBLIGATIONS REGARDING AN AUDIT IN GENERAL

Section 575 of the New York State Unemployment Insurance Law requires that every employer keep records of each person in its employ, including the name, social security number, and the amount of remuneration paid to each, and that such records shall be open to inspection at any time and as often as necessary by duly authorized representatives of the Commissioner of Labor.

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Audit.Magnifying.Glass.Dollar.Photo.Club.jpgCompanies who use freelancers, contractors, consultants, day laborers or any other workers who are not categorized as employees must exercise extreme caution. The NYS Labor Department and other agencies have stepped up their enforcement efforts to investigate companies’ practices and whether workers are properly classified in all industries. An innocent error can lead to a multitude of problems for businesses including but not limited to a class action lawsuit and monetary damages in the form of unpaid payroll-related taxes, unpaid overtime wages, and failure to provide employee benefits (vacation pay, health insurance, etc.) Companies should carefully examine a worker’s duties and determine the proper employment characterization before work is commenced. There are different rules that apply to employees and contractors. In general, employees are issued a W-2 tax form, provided with Wage Theft Prevention Act Notices and paid accordingly to applicable federal and state labor laws. Conversely, in general, contractors are issued a 1099 tax form, have some expertise, and are not supervised or controlled by the business.
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Penalty.Picture.Dollar.Photo.Club.1.4.16.jpgOur New York Workers Compensation Defense Attorney has been asked these questions along with others by small business owners and household employers. In general, Pioneer Credit Recovery Inc. is a collection agency that is an agent of the New York State Workers Compensation for certain cases. In general, Pioneer has been engaged by the State to collect monies owed pursuant to a penalty or judgment issued by the Board for an employer’s failure to carry workers compensation insurance coverage. Pioneer does work for other clients and its work is not limited to workers compensation related issues. Below is a text from a letter that Pioneer sent to one of our clients. Here is a link to an article on frequently asked questions regarding a penalty. Our Award Winning NY Employment Law Attorney has helped our clients save over TWO MILLION DOLLARS in the aggregate and are happy to speak with you to see if we can help you.

Since we have not received payment on your delinquent account, this notice serves as final notice. Failure to resolve your debt may result in the filing and execution of a judgment against you and/our business as allowed by The New York State Workers Compensation Law and the New York Civil Practice Law and Rules Enforceable by the New York State Workers Compensation Board. A judgment against you and/or your business is a matter of public record. Please take this opportunity to resolve your account voluntarily.

An employer’s failure to provide workers compensation coverage is punishable by fines and/or criminal prosecution. A Stop Work Order may be issued. The cost of workers compensation insurance coverage is very reasonable compared to the legal cost of defending and possibly losing a civil suit for the injury of an employee.

Please take this opportunity to resolve your account voluntarily. We encourage you to contact our office and allow us to inform you on the options available to resolve your debt in compliance with the New York State Workers Compensation laws and avoid unnecessary penalties in the future.

Know.Your.Rights.Dollar.Photo.Club.3.9.15.jpgIf you have received such a letter or have any questions about your workers compensation issues, feel free to contact us for a confidential consultation at (800) 893-9645.
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