There are many laws that regulate how employers must treat their employees. As one example, the Fair Labor Standards Act (“FLSA”) requires that employers pay all employees, with few exceptions, at a rate equal to or greater than the federal minimum wage. Additionally, the FLSA requires employers to pay most employees time-and-a-half for any hours worked beyond 40 hours per week.
Often, however, benefits and protections like those found under the FLSA do not extend to workers who are not considered employees. To make matters worse, there is no clear-cut rule for when a worker qualifies as an “employee.” Instead, there are several factors to consider, such as:
- Whether the worker performs a task that is essential to the employer’s business.
- How permanent the work arrangement is – does the worker consistently or exclusively work for the employer?
- Whether the worker invested in facilities and equipment used to perform the required work, or the employer provides the necessary equipment.
- How much control the employer has over the worker – does the employer set the work schedule or dictate how the work must be completed?
Typically, the more control an employer has over the potential earnings, work schedule, and operations of a worker, the more likely it is that the worker is an employee. If so, that worker is entitled to the benefits and protections provided by the FLSA and other similar laws.
One recent case, Solis v. Cascom, Inc., et al., illustrates how employers can take advantage of the FLSA’s limited reach. The defendant-employer, cable provider Cascom, along with the company’s owner Julia J. Gress, wound up in court after the company classified over 200 installation technicians as independent contractors rather than employees. As independent contractors, the installation techs were not entitled to a number of benefits and protections reserved for employees, including overtime compensation as required by the FLSA.
Following an investigation, the Department of Labor (“DOL”) determined that the installation techs should be considered employees rather than independent contractors. In addition to saving the company money that should have been paid to the affected workers, the misclassification allowed Cascom to operate at a lower cost, giving the company an illegal price advantage over its law-abiding competition.
Because misclassification can have a ripple effect on the market, not to mention depriving workers of their rightful earnings, employers who are caught misclassifying their workers can face stiff penalties. For one thing, employers who violate the FLSA are liable for any back pay owed to the affected workers, plus an additional equal amount as liquidated damages.
As a result of the company’s conduct in Solis, the United States District Court for the Southern District of Ohio found Cascom and Gress jointly liable for a combined $1.5 million dollars in back wages and liquidated damages. Since Cascom is now defunct, Gress must pay the hefty judgment herself.
With all of the factors to consider, it is not always easy to know who qualifies as an employee. Therefore, it is important to speak with an experienced employment attorney if you are concerned about whether you are entitled to the benefits and protections provided by the FLSA and other similar laws.
If you believe that you have been misclassified as an independent contractor instead of an employee; or that your employer is not paying you for all of your lawfully earned overtime compensation at a rate of one and half times your normal wages as requires under the Fair Labor Standards Act, contact the attorneys at Spitz, The Employee’s Law Firm today for a free and confidential initial consultation. The wage and hour lawyers at Spitz, The Employee’s Law Firm will provide you with the best options for your overtime pay dispute situation. If you even think that you may be entitled to overtime pay that you are not being paid, call 866-797-6040.
The materials available at this wage and hour law website are for informational purposes only and not for the purpose of providing legal advice. Your best option is to contact an Ohio overtime attorney to obtain advice with respect to FLSA questions or any particular employment law issue. Use and access to this employment law website or any of the links contained within the site do not create an attorney-client relationship. The legal opinions expressed at or through this site are the opinions of the individual lawyer and may not reflect the opinions of Spitz, The Employee’s Law Firm or any individual attorney.