Recovering Unpaid Wages and Overtime for Employees Misclassified as Independent Contractors
Business owners who have a job that needs to get done often have a couple of options open to them – they can hire employees or independent contractors. When these choices are available, the employer may prefer the independent contractor to save money. For a number of reasons, independent contractors are in many ways cheaper than employees. Most significantly, contractors don’t have to be paid minimum wage and are not entitled to overtime. Also, employers can save significant money on payroll taxes, social security, unemployment and workers’ compensation insurance by hiring independent contractors rather than taking on employees.
Independent contractors are so attractive that some employers as a matter of course routinely misclassify their workers as contractors when they are really employees. This action hurts the worker, who misses out on wages and benefits he or she is actually entitled to. The Bayless Law Firm represents West Virginia workers who have been misclassified as independent contractors and helps them receive the pay and benefits they have earned.
Factors to Distinguish Employees from Independent Contractors
Most workers are considered employees under the Fair Labor Standards Act (FLSA), which uses a broad definition of employee. The key distinction is whether the worker is economically dependent on the employer or is economically independent and is in business for him or herself. One quick test is to consider whether the employer can allow the person to work or keep the person from the working. If the answer to either question is yes, the worker is likely an employee.
While there is no one particular test or set of factors in the FLSA to be used to determine employee/independent contractor status, there are a number of questions that courts typically ask when confronted with the issue. Ask yourself these questions if you are unsure about your employment status:
- Is the work you are doing an integral part of the employer’s business?
- Do you exercise managerial skills, such as hiring and supervising other workers or investing in equipment, and does the use of those skills affect your profit or loss?
- Who is making more significant investments in facilities and equipment – you or the employer?
- Do you use specialized skills and exercise independent business judgment/initiative?
- Is the duration of your working relationship permanent or indefinite, or is it only for a specific project or specified period of time?
- What kind of control does the employer exert?
- Who decides the amount of pay?
- Who sets the work hours?
- Who determines how the work is performed?
- Are you free to hire helpers?
- Are you free to work for others?
In addition to minimum wage and overtime pay, employees who are misclassified as independent contractors may miss out on other important benefits as well, such as family and medical leave and unemployment compensation, for example.
Help is Available for Employees Misclassified as Independent Contractors
If you can prove that you have been misclassified, you may be entitled to go back for months or even years and reclaim lost wages, unpaid overtime and other benefits that rightfully belonged to you as an employee. Attorney Kay Bayless has been helping workers in West Virginia with employment law issues like these for more than three decades. If you believe you have been misclassified as an independent contractor instead of an employee, contact the Bayless Law Firm in Princeton to speak with an experienced West Virginia employment lawyer.