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Independent Contractor Overtime Lawsuits On The Rise

Companies are increasingly classifying their workers as “independent contractors” for a variety of reasons. According to Forbes, at least 100% of jobs growth over the past decade came from the growth in contractor and temp jobs. Employers classify their workers as independent contractors in order to decrease their overhead, avoiding payment of health benefits, employment taxes and other regulatory costs. Employers also do so in order to avoid paying their workers overtime. Many workers who are classified as independent contractors assume that because they are classified as independent contractors, they have no choice but to work overtime without being paid for it. This is not correct. Often, workers who are classified as independent contractors are mislabeled and are actually employees of the companies they work for, meaning they are required to be paid one-and-a-half times their regular rate of pay for each hour they work above forty in a week. Thus, the question in such cases is whether the worker is really an employee or an independent contractor. Courts often use a multi-factor test in assessing this issue, and often focus on the following factors:

1. the degree of control exercised by the alleged employer;

2. the extent of the relative investments of the [alleged] employee and employer;

3. the degree to which the worker’s opportunity for profit and loss is determined by the company;

4. the skill and initiative required in performing the job; and

5. the permanency of the relationship.

Various state agencies have devised questionnaires to help individuals and companies determine whether their workers are employees or independent contractors, such as this one. While these tests and questionnaires can sometimes be confusing, as a general rule of thumb, if a worker is told by the company that he or she works for what to do, where to do it, when to do it, and how much the worker will be paid, the worker will generally be found by the courts to be an employee, rather than an independent contractor, meaning that the worker is legally required to be paid overtime.

If you or someone you know has been classified as an independent contractor and denied overtime within the past three years, consult with an experienced overtime attorney as soon as possible. The author of this article, Josh Borsellino, is a Texas attorney that regularly and aggressively represents workers who have been classified as independent contractors in unpaid overtime lawsuits. For a free and confidential consultation with Josh about your unpaid overtime matter, call 817.908.9861, or 432.242.7118, or fill out this online form.