New York State Senate Approves Bill Empowering DOL to Issue Stop-Work Orders to Employers Who Improperly Classify Workers as Independent Contractor
By: Charlotte Moriarty on 3/20/25
On March 4, 2025, the New York State Senate passed S1514, a bill which would empower the New York Department of Labor (“NY DOL”) to issue stop-work orders against employers who improperly classify their employees as independent contractors, often called a “1099 worker.”
The misclassification of employees as independent contractor has been called by the U.S. Department of Labor as “one of the most serious issues impacting employees.” The New York State legislature aims to remedy by passing this bill, which if passed “will ensure employees are able to access the protections entitled to them by law.”
The bill provides that if, after an investigation, the Commissioner of Labor determines that an employer has knowingly misclassified employees as independent contractors or provided false information to insurance companies, the Commissioner will send notice to the employer that they may be subject to the issuance of a stop-work order. In that notice, the employer will be provided with the opportunity for a hearing, and the factual basis for the decision and instructions for compliance.
After receiving such notice, the employer will have 72 hours to address the violation or will face the stop-work order. If a stop-work order is issued, employers will be required to pay their employees at the regular rate of pay while the order is in effect, or for the first 10 days the employee would have been scheduled to work, whichever is less.
Employers would be prohibited from retaliating, discriminating against or taking any adverse action against an employee who makes a complaint to the NY DOL regarding their misclassification.
Importantly, this bill has a companion bill in the State Assembly signaling the New York State legislature’s strong intent for it to become law. The bill must be passed in the State Assembly before it proceeds to Governor Hochul for final approval. We will continue to monitor the status of this bill and issue updates as they come in.
Employers must review employee classifications carefully to ensure workers are not mistakenly designated as independent contractors or 1099 workers. Reach out today with questions about employee classification or how this legislation may impact your business, please contact Sheryl Galler at sgaller@booklawllp.com or Chaim Book at cbook@booklawllp.com.
