Independent Contractor vs. Employee Classification

(DOL says: “most workers are employees – not independent contractors.”)

The Fair Labor Standards Act (“FLSA”) is the law that governs the pay of employees in the United States. The law requires that companies pay employees at least minimum wage ($7.25) and at least 1 ½ times the regular rate for overtime (hours over 40 in on workweek) unless the employee’s job duties make them exempt from the law. The general rule is that the FLSA applies to all “employees” as opposed to “independent contractors.” However, many companies misclassify workers as independent contractors in order to bypass the FLSA. Significantly, if a worker is misclassified as an independent contractor, they are entitled to the protections of the FLSA, including at least minimum wage, overtime, and liquidated damages as well as the protections of many other employment laws like the Family Medical Leave Act and Title VII.

The U.S. Department of Labor states that “most workers are employees – not independent contractors.” The determination of whether a wrongfully classified individual is entitled to the protections of the FLSA is based upon several notable factors but first, it is important to know that the U.S. Supreme Court has found that even if the worker signed an “Independent Contractor Agreement,” the worker may still actually be an “employee” and entitled to recover owed wages under the FLSA.

Courts look at a variety of factors to determine if an individual is an employee or an independent contractor. If your job fits into just one of the below “employee” categories, you may be misclassified as an independent contractor and entitled to compensation.

Do any of the below “employees” statements apply to you?
Employees:Independent Contractors:
Not allowed to hire other workers to perform jobAllowed to hire other workers to perform job
Employer controls how the worker performs the workWorker controls how they perform the work
Worker typically only performs the work for one companyWorker can perform similar jobs for multiple companies
Worker does not have an opportunity to make more money by working more efficientlyWorker has an opportunity to make more money by performing job more efficiently
Worker uses equipment and supplies given to them from their employerWorker provides his own equipment, supplies, uniform, truck, etc.
The work performed is not a specially skilled jobWorker provides a specific special skill to perform the work
Worker is employed for an indefinite period of time or for a longer period of time like other employeesWorker performs the work for a shorter, set period of time
The work performed is needed to run the companyThe work performed is not integral to the business but more likely a specific, special job
Worker is bound by company rules like other employees
The worker is trained to perform the work by the company
If Your Employer Misclassified You As An Independent Contractor, You Could Be Entitled To Compensation

If any of the above statements in the “employee” column apply to your job, you may be misclassified as an independent contractor and entitled to your overtime pay at a rate of 1 ½ of your regular rate for the time period of the remaining statute of limitations. Additionally, you could be entitled to liquidated damages a/k/a “double damages” which doubles the amount of pay you are entitled to receive. The court may also require that the company pay your attorneys’ fees and costs.

In order to recover these damages, you would be required to file a lawsuit. Overtime lawsuits can also be filed as a collective or class action which permits other similar employees join the case to recover their overtime as well. This permits employees a way for pursuing relatively small claims together that could otherwise be too costly.

If It’s Not Right, You Have To Fight! At Martin & Martin, our Atlanta wage attorneys successfully represent employees like you every single day. You worked hard for your pay, let us work hard to get you what you are owed. Please contact us online or call us at (404) 831-8721 for a free consultation.