Could I receive back owed overtime if I was misclassified as an independent contractor?
The Fair Labor Standards Act (FLSA) and New York Labor Law protect employee by setting certain minimums for pay and mandating overtime for nonexempt employees that work over 40 hours a week. Due to the stringent standards surrounding employees, some employers will misclassify their workers as independent contractors. Independent contractors are not required to receive overtime. In addition, employers avoid paying unemployment taxes, unemployment insurance, and workers’ compensation for these independent contractors. Employees who are misclassified as independent contractors may have a viable action for their unpaid overtime under New York law.
Are You an Employee?
An employer is not authorized to misclassify an employee as an independent contractor for any reason. Even if you have signed an independent contractor agreement and receive 1099 forms, you may still be a misclassified employee. Further, employees who work offsite or from home may still qualify as employees. To ascertain whether you are an employee or independent contractor, review these three criteria set out by the IRS:
- Behavioral control: If the employer sets the hour of work, what equipment or tools must be used, and directs the work, then the worker is likely an employee. If, on the other hand, the worker sets his or her own hours and has little direction from the employer, he or she may be an independent contractor.
- Financial control: Workers who are restricted from working for someone else will likely be employees. Workers that work for several employers at once will probably be independent contractors.
- Type of relationship: Workers who are entitled to benefits will usually be employees. You should also consider whether the work performed by the worker is directly related to the company’s core work. A bank teller, for example, would probably be an employee of the bank while the maintenance worker may not be.
Your Right to Unpaid Overtime
If your employer has violated the FLSA and New York Labor Law by misclassifying you as an independent contractor, you may be able to bring an action against your employer. Misclassified employees could potentially receive compensation for unpaid overtime, as well as liquidated damages, attorneys’ fees, and court costs. Employee misclassification is occurring at alarmingly high rates nationwide, so consult with an employment law attorney at Lipsky Lowe today if you believe you have potentially been misclassified as an independent contractor.