IIAANY Encourages N.Y. Gov. to Sign Bill on Employment Status

September 20, 2002

The Independent Insurance Agents of New York Inc. (IIAANY) says Gov. George Pataki can take a major step in helping licensed insurance agents and brokers from running afoul of state agencies by signing a bill that would clarify their employment status.

The IIAANY, which has been at the forefront in discussions with the Pataki Administration in developing a legislative remedy, is urging the Governor to sign into law A.6167, which would grant agents and brokers independent contractor status.

“This legislation allows our members to be treated no differently than New York’s real estate agents,” said IIAANY board chair John Costello. “With his signature, Gov. Pataki can give agents and brokers the confidence to know that state officials will be consistent in how they consider the employment status of insurance producers. A statutory definition protects our members from wacky interpretations of the law.”

The legislation introduced by Assembly members Cathy Nolan (D-Queens) and Robin Schimminger (D-Erie County) passed both chambers of the Legislature shortly before the Assembly and Senate recessed for the summer. It would amend section of the state Labor and Workers’ Compensation laws, excluding agents and brokers from coverage of unemployment and workers’ compensation provisions.

“Conflicting definitions of independent contractors have, at times, caused some broker/agency arrangements to be at odds with state agencies,” said Paul Babbitt, chair of IIAANY’s Public Policy Advancement Committee. “The result has been costly legal disputes that, in some cases, have taken years to resolve. We credit Gov. Pataki, Representatives Nolan and Schimminger, as well as Sen. James Seward (R-Oneonta), sponsor of the Senate companion bill, for recognizing this as a major concern to our members. Now, we look forward to seeing the Governor sign this important legislation into law.”

Babbitt represented IIAANY in 1999 when he testified before the Governor’s Task Force on Independent Contractors. During his testimony, Babbitt pointed out that in some instances, the state Labor Department alleged an employee-employer relationship existed between brokers and agencies even though those brokers merely placed business through an agency.

“Though those brokers received some assistance from agencies, their schedules were not controlled by agencies,” explained Babbitt. “They owned their own books of business and received straight commissions. Those brokers were never agency employees.”

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