New York City business owners are constantly looking to cut their overhead costs while staying productive. One way to cut costs is to misclassify employees as independent contractors and avoid paying overtime. Workers who are wrongly deemed independent contractors often believe that they are not entitled to overtime pay since they were not employees. But they are.
Contact an Unpaid Overtime Attorney in NYC
If you have been wrongfully paid on your 1099 form and misclassified as an independent contractor, you may be entitled to significant compensation. The New York City wage and hour attorneys at Lipsky Lowe LLC have helped many New York City workers recover the unpaid overtime they deserve as independent contractors. Contact us today to schedule your free case evaluation. We will carefully analyze the facts of the case and help you understand your legal options.
Are Independent Contractors Entitled to Overtime Pay?
Under federal, state, and local law, employees are entitled to one and a half of their normal pay rate for every hour they work over 40 hours in a single workweek. When a worker is correctly classified as an independent contractor, he or she is not entitled to overtime pay at time-and-a-half unless overtime pay is required in the agreement. For example, an employer may hire an independent contractor for a specific job and agree to pay additional compensation for working over 40 in a single workweek.
When a true independent contractor works 50 hours in a workweek, he or she is not entitled to a pay rate of time and a half for the overtime hours. Many independent contractors are paid a flat rate for a particular project or a rate for a specific type of output. As a result, some independent contractors can earn minimum wage for the hours they worked and never receive time-and-a-half for overtime.
Misclassifying Employees as Independent Contractors
These overtime pay laws do not protect true independent contractors. However, many employers try to get around the overtime requirement by wrongly classifying employees as 1099 employees or independent contractors. Employers have a significant financial incentive to misclassify employees. Large employers in New York City can save millions of dollars by wrongfully classifying employees as independent contractors. In addition to avoiding overtime payments, they can avoid paying Social Security benefits, Medicare, and workers’ compensation for on-the-job injuries.
Merely calling an employee an independent contractor or having them sign an agreement that they are an independent contractor doesn’t mean that they are truly an independent contractor who isn’t entitled to overtime. New York has made it more difficult for employers to classify and employ independent contractors. It isn’t always clear whether a worker is an independent contractor or an employee. There are multiple factors to consider and, when an employee challenges the classification, judges will make decisions on a case-by-case basis.
Factors in Determining Whether an Employee Is an Independent Contractor
Whether a worker is considered an independent contractor is a legal determination, and the exact rules depend on the law in question and the facts involved in the case. The more control the business has over the employee, the more likely the employee is not an independent contractor. In New York, courts will typically consider the following factors to determine whether or not the employee is an independent contractor:
- The degree of control exercised over the worker by the employer
- The worker’s opportunity for profit or loss through the activity
- The degree of skill and independent initiative required of the activity
- The permanence and duration of the working relationship
- The extent to which the work is an integral part of the employer’s business
- Whether the employer maintains an office for you that you must work in
- Whether you or the employer control the tools necessary to complete your work
- Whether the work requires a special skill or is routine work that an employee might do
Courts will also review how the worker receives compensation. When a group of workers are all deemed as independent contractors and paid regularly by the employer, they are usually not. If you think that you are an employee, it’s important that you gather all of the relevant documents. Gather any written agreements you have and instructions from your employer. If you’re having difficulty being paid, document the work you’ve done and gather all of your unpaid invoices. Make sure you document all of the overtime hours you worked and haven’t been paid for yet. Doing so will help you when you meet with an attorney to discuss your legal options.
Recovering Benefits for Unpaid Overtime
You may be wondering whether seeking legal action is worth it. Given the significant amount of pay that could be at stake, it’s important that workers take the time to understand whether they really are independent contractors are not. If you’ve been misclassified, you may be entitled to thousands of dollars of unpaid overtime. If you should have been classified as an employee, you are entitled to overtime wages and potentially other damages for all of the overtime hours you worked while you were classified as an independent contractor.
You can’t rely on your human resources department and managers to determine whether you are properly classified. Instead, it’s wise to reach out to an attorney because there are strict time limits that apply to unpaid overtime claims. Procrastination can be expensive and cut off your right to obtain compensation.
Find Out How a New York City Unpaid Overtime Attorney Can Help You
Have you been classified as an independent contractor and denied overtime pay? Do you suspect that your employer is violating federal and state wage-and-hour laws? If so, the employment attorneys at Lipsky Lowe LLP are here to help. We’ve helped many New York City employees just like you recover the overtime pay they deserve. Contact Lipsky Lowe LLP today to schedule your free, confidential review of your situation.