BILL NUMBER: S3954

SPONSOR: RAMOS
 
TITLE OF BILL:

An act to amend the labor law, in relation to the classification of
certain worksite employees as employees of a professional employer

 
PURPOSE:

This bill classifies worksite employees of professional employers as
employees of the professional employer for certain insurance purposes.

 
SUMMARY OF PROVISIONS:

Section 1. Amends the labor law to state that worksite employees are not
automatically deemed employees of the professional employer organization
for purposes of general liability, insurance, automobile insurance,
fidelity bonds, surety bonds, employer's liability which is not covered
by workers' compensation, or liquor liability insurance.

Section 2. Sets the effective date.
              

 
JUSTIFICATION:

This amendment further demarcates employee status in employee leasing
arrangements between employers and Professional Employer Organizations
("PEOs"), entities which are often used by employers to supply workers
on a project-specific or temporary basis and provide insurance coverage.
Previously, Labor Law § 922 provided that worksite employees are not
automatically considered employees of the PEO for insurance purposes
unless specifically enumerated in the leasing agreement, leaving it up
to the courts to decide the identity of the employer based on extrinsic
evidence which is often unavailable. In recent years, this has become
the source of much litigation and has become ripe for fraud and abuse in
disputed cases by unscrupulous employers and employer organizations
seeking to capitalize on the ambiguity and shift the cost of losses by
claiming that the employee is not covered by the PEO for workers'
compensation insurance because the employee was not specifically named
as a covered employee under the leasing agreement. This legislation
clarifies employee status under these type of arrangements by further
regulating what prerequisites are necessary for a PEO to claim or not
claim employment status of an employee.

 
LEGISLATIVE HISTORY:

2023-24: S7134 (Ramos) - Referred to Labor

 
FISCAL IMPACT:

TBD

 
EFFECTIVE DATE:
This act shall take effect October 1, 2024