As someone who owns and operates a small business in the state of New York, at times you may need to hire an independent contractor to handle tasks that an employee is not qualified for. In doing so, you are aware that state and federal law carefully distinguishes between employees and independent contractors and can penalize you for treating an independent contractor as an employee. So you should be careful while designating a worker as an independent employee.
The New York Department of Labor website explains that some employers may consider having an independent contractor sign an agreement that explicitly waives their rights as employees while they are in service to the employer. The statement may claim that the worker is an independent contractor and not an employee. An employer might also try to have the contractor acquire a DBA, or a Doing Business As designation that gives the contractor an operating business name.
However, none of these provisions will supersede New York law concerning independent contractors and employees. State law is clear that a person qualifies as an independent contractor by how much supervision, control and direction the employer exercises over the worker. If a person can direct his or her own work schedule, carries insurance, is free to refuse work, and possesses an established business, that person is more likely to be recognized as an independent contractor than any written declaration.
Additionally, New York law states that no person can waive employee rights through a written agreement. So any attempt to declare a person as an independent contractor on a written form will not be recognized by the state. The state does not even consider providing a worker with a 1099 form instead of a W-2 as proof of independent contractor status. Ultimately, the best way to show that an independent contractor is doing work for you and not an employee is to fulfill state law requirements for how employers treat independent contractors.
Employer disputes over whether a worker is an independent contractor or an employee can involve many different issues, including a worker’s right to workers’ compensation. For this reason, you should not read this article as legal advice, only for general information.