The lawyers at Leeds Brown Law, P.C, representing workers in the New York City metropolitan area and nationwide, know that employers try to avoid paying overtime by calling employees independent contractors. Under laws like the Fair Labor Standards Act (FLSA) and New York Labor Law, employers are only obligated to provide overtime pay to employees who work more than 40 hours in a workweek – not independent contractors.
True independent contractors and consultants are not employees. Under the FLSA, employers are, therefore, not required to provide them with overtime pay regardless of the number of hours they work. Many businesses structure themselves in such a way that they use a variety of independent contractors to avoid paying overtime and minimum wages. If the workers are, in fact, independent contractors, this structure is acceptable and even beneficial to both parties.
However, it is not always obvious who is an employee and who is an independent contractor, and the correct classification of a worker depends on factors that go beyond what the employer calls you. Employment law attorneys at Leeds Brown have been helping employees who are wrongly classified as independent contractors to secure the unpaid overtime and other wages to which they are legally entitled. We have a deep and thorough understanding of the federal FLSA and relevant state laws and can represent you with a level of skill and dedication that is unparalleled in New York.
According to the US Department of Labor (DOL), most workers are employees. In other words, an employer-employee relationship exists. The FLSA defines “employ” as to “suffer or permit to work.” The definition is very broad because it covers work that the employer directs or allows to take place.
Regardless of his or her level of skill, an individual who is economically reliant on the business of the employer, is considered to be an employee. An employer allows an employee to work and can prevent him or her from doing the same.
It logically follows that independent contractors have economic independence and are in business for themselves. An independent contractor is not dependent on the business of the employer.
There is no single test used to determine if a worker is an employee who is entitled to overtime under the FLSA or an independent contractor. Having an agreement that states you are an independent contractor or being labeled or paid as one does not automatically mean that you are. Instead, the DOL and courts look at the working relationship in its entirety. There are several “economic realities” factors the courts take into consideration.
The more essential the work is, the more likely the worker is an employee. For instance, work is integral to the employer’s business if it is part of its production process or is a service the employer is in business to provide.
Skill alone does not affect employee or independent contractor status. Both workers may be highly skilled. An independent contractor, however, should have skills that demonstrate the exercise of independent business judgment. For example, specialized skills possessed by carpenters, construction workers, and electricians are not alone indicative of independent contractor status. Rather, it is whether these individuals take the initiative to operate as independent businesses, as opposed to being economically dependent on an employer that suggests independent contractor status.
The indefiniteness or permanency in the worker’s relationship with the organization must be taken into consideration when determining whether the worker is an employee or independent contractor.
Analysis of this factor includes the following:
An actual independent contractor works (mostly) free from control by the employer and exercises self-control over the above. However, the nature and degree of control is a factor that warrants careful analysis as workplace structures, policies and practices vary.
Misclassification occurs in nearly all industries. Trucking, construction, home health care, delivery, maintenance, and janitorial workers are all at risk for being misclassified and missing out on overtime pay to which they are entitled. In 2007, the Fiscal Policy Institute released a study on misclassified construction workers in New York City, estimating one in four workers were misclassified as independent contractors or employed by construction companies completely off the books.
Over the years, workers have filed lawsuits to recover the overtime pay they have lost because of being misclassified. Employees have banded together to fight the injustice of misclassification by filing cases in state and federal courts. Many have achieved successful outcomes:
Attorneys at Leeds Brown are focused on recovering unpaid overtime and wages that result from misclassification and other unlawful practices by employers in New York. Our employment lawyers understand the complex nature of unpaid overtime cases and can help you navigate your federal or state unpaid wage claim. We have spent decades devoted to protecting the rights of employees to receive the money they earn. Don’t let your employer take advantage of you. Call Leeds Brown today.
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