One issue we constantly see in wage and hour law is the misclassification of employees as independent contractors. In over 15 years, I have yet to see the legitimate use of an independent contractor classification. This means that if you are labeled as an independent contractor, the odds are that you are not getting the overtime pay (and other benefits) you deserve.
Employees vs. Independent Contractors
The critical difference between an employee and an independent contractor lies in the degree of control and independence in the work relationship. Employees are typically subject to more control by the employer regarding how and when they perform their work. In contrast, independent contractors often have more freedom in when and how they do their work.
Your standard pool guy is a great example: you don’t tell him when he will show up, how long he will stay, how to do his job, how much he will charge and he works for a number of different people. He is truly in business for himself. The further you get away from this general example, the closer you move to employee status.
The Fair Labor Standards Act (FLSA) and Overtime Pay
Under the Fair Labor Standards Act (FLSA), non-exempt employees are entitled to overtime pay at a rate of one and a half times their regular rate of pay for hours worked beyond 40 in a workweek. This federal law, however, does not extend to genuine independent contractors. If you are classified as an independent contractor, the odds are that you have been misclassified, and if you work overtime, you may be owed extra compensation for that time.
Identifying Misclassification
Misclassification occurs when a worker is labeled as an independent contractor but functions as an employee. Factors influencing this determination include the level of control over the work, the financial aspects of the job (like who provides tools and supplies, the relative investments made by the employer and the “contractor”), the permanency of the relationship, and the degree to which the work performed is an integral part of the employer’s business.
The Legal Implications of Misclassification
When a worker is misclassified, they may miss out on essential benefits and protections, including overtime pay, as well as unpaid social security and medicare contributions. Employers who misclassify employees as independent contractors face legal consequences, including back pay of wages, liquidated or double damages, attorneys’ fees and costs if suit is filed, and possible forced repayment of taxes to the misclassified worker.
What This Means for You
If you believe you’ve been misclassified, it’s essential to understand your rights. At Welmaker Law PLLC, we can help you understand your rights, and we always provide free initial consultations.
Documenting your hours, understanding the nature of your work relationship, and seeking legal counsel can be crucial steps in asserting your right to fair compensation.
Note to Readers:
This blog post is for informational purposes and does not constitute legal advice. If you are dealing with a specific issue related to employment classification and overtime pay, it is advisable to consult with a legal professional specializing in employment law.