Cases & Deals

The Rye Arts Center receives favorable determination in New York State Department of Labor audit

Clients Rye Arts Center, The

Jones Day, on behalf of The Rye Arts Center ("RAC"), received a favorable determination in an audit conducted by the New York State Department of Labor. RAC is a non-profit organization focused on providing community-based arts programs in Westchester and the surrounding areas. In December of 2009, the New York State Department of Labor notified the RAC that it would be conducting a random audit of RAC for compliance with New York State Unemployment Insurance law. A major component of this random audit was to determine whether RAC's instructors, and certain other individuals, were working as independent contractors or as employees. Because it is a non-profit organization, a finding of an employment relationship between RAC and its instructors (and the accompanying unemployment insurance and tax liability) would have been financially devastating. After a full-day on-site audit, and nearly eight months of consideration of Jones Day's position statement on behalf of RAC, the New York State Department of Labor determined that RAC had properly classified its instructors, and other individuals, as independent contractors. Shortly thereafter, the remainder of the audit was closed, with a finding that RAC had no outstanding unemployment insurance liability. The Jones Day team consisted of Joe Bernasky, Sam Estreicher, Carolyn Lee, Helena Ajudua, and Luis Segura.