New Legal Developments Affect New York Organizations Using Independent Contractors

Yoga Instructors May Be Independent Contractors

On October 25, 2016, in the Matter of Yoga Vida NYC,  a decision sure to have rippling effects through many industries, the New York State Court of Appeals–the highest court in New York State — ruled sensibly and logically, that certain yoga instructors were independent contractors, not employees. Specifically, the Court found that substantial evidence supported a finding that non-staff yoga instructors were independent contractors where the non-staff instructors:

1) set their own schedules; 2) chose how they were paid (hourly or on a percentage basis); 3) were paid only if a certain number of students attended their classes; 4) were not restricted as to where they could teach (whereas staff instructors who were employees could not work for competitors within certain geographical areas); 5) could inform students of classes they taught at other locations; and 6) were not required to attend meetings or receive training.

The Court further opined that evidence of incidental control by the yoga studio, including an inquiry by the studio as to whether the instructors held proper licenses to teach yoga; the fact that the yoga studio published a master schedule on its website; and the fact that the studio provided space for the classes, did not support the conclusion that the instructors were employees.

Employers should understand that, depending on the facts, some yoga instructors or other kinds of instructors may be deemed to be employees while others will be deemed independent contractors.

 

NYC Now Protects Freelancers/Independent Contractors

On November 16, Mayor de Blasio signed into law a bill that protects New York City freelancers/independent contractors by requiring that whomever hires a freelancer provide a written contract for the freelancer’s work, pay him/her in full and on time, and that the hiring party does not retaliate against the freelancer for exercising his/her rights.

More specifically, the law requires any person or entity who engages a freelancer to have a written contract with that freelancer for any work over $800.  The contract must itemize all services to be provided, the value of those services, the rate, the method of payment, and the payment due date or the mechanism by which such date will be determined.

The client must pay the freelancer on a timely basis and may not require the freelancer to accept less than the full amount of the contract in exchange for timely payment. If the contract does not provide the payment date or the mechanism by which such date will be determined, payment must be made no later than 30 days after the completion of the freelance worker’s services under the contract.

The party engaging the freelancer/independent contractor bears the burden of showing there is a written contract if any dispute arises regarding the terms of engagement.

The freelancer may bring a complaint with the Director of New York City’s Office of Labor Standards or bring an individual cause of action in state court. Violation of this law may result in damages equal to the value of the services, double damages, statutory damages, injunctive relief and attorney’s fees and costs. Where there is evidence of a pattern or practice of violations, the Corporation Counsel may bring a civil action in court on behalf of the City, and a civil penalty up to $25,000 may be imposed.  The law takes effect in 180 days from its signing, or on May 15, 2017.

Any nonprofits that are planning to engage freelancers should be mindful of this new law and ensure their independent contractor engagements are in writing and compliant with the new law.

In light of the above developments, it would be wise for New York employers to confer with their employment counsel to ensure their workers are properly classified and that their independent contractor agreements are properly drafted.

 

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