Best Ohio Overtime Attorney Answer: Am I being misclassified as an independent contractor? What should I do if I am not being paid overtime ? What should I do if I think I am being misclassified? Who is the best wage and hour lawyer in Ohio?
Many people do not think twice when their employer tells them they are being employed as an “independent contractor.” Indeed, because payroll taxes are not taken out of someone being paid as an independent contractor, many employees may like being employed in this manner.
However, as we have written in past overtime blogs, many employers misclassify their employees, either because they do not understand the law, or because they are trying to take advantage of their employees.
How does an employer benefit from misclassifying its employees? Unlike an employee, employers do not have to pay independent contractors minimum wage or overtime, because the Fair Labor Standards Act (“FLSA”) does not apply to independent contractors. Likewise, employers do not need to provide independent contractors health insurance benefits, Worker’s Compensation benefits, or worry about harassment or discrimination claims under Title VII of the Civil Rights Act of 1964 or Ohio law. As you can imagine, this can lead to big savings to an employer.
Ohio law utilizes a “right to control” to determine if someone is an employee or a independent contractor. The determination depends on the facts of each case, and multiple factors are considered—who controls the details and quality of the work; who controls the hours worked; who selects the materials, tools and personnel used; who selects the routes traveled; the length of employment; and any pertinent agreements or contracts.
In our last wage and hout blog regarding classification of independent contractors compared to employees, we talked about employer abuse of the independent contractor classification in the context small businesses such as strip clubs, who often tell dancers they are independent contractors, and then do not pay any wages, expecting the dancer to simply live off their tips. However, as the recent decisions in Slayman, et al v. FedEx Ground System, Inc (applying Oregon law) and Alexander, et al v. FedEx Ground Package System, Inc (applying California law) make clear, even large employers can be guilty of misclassifying employees.
The facts in Slayman and Alexander are generally the same: Fedex entered into contracts with the plaintiffs (drivers) as independent contractors, and required them to buy FedEx trucks to complete deliveries along routes FedEx claimed the drivers “owned.” Fedex even went to the lengths of putting language in their contracts that purported to give the plaintiffs control over their own work:
[T]his Agreement will set forth the mutual business objectives of the two parties . . . but the manner and means of reaching these results are within the discretion of the [driver], and no officer or employee of FedEx. . . shall have the authority to impose any term or condition on [the driver] . . . which is contrary to this understanding.
[N]o officer, agent or employee of FedEx . . .shall have the authority to direct [the driver] as to the manner or means employed…For example, no officer, agent or employee of FedEx…shall have the authority to prescribe hours of work, whether or when the [driver] is to take breaks, what route the [driver] is to follow, or other details of performance.
However, the reality was for drivers was quite different. FedEx controlled everything from what kind of vehicle the drivers drove, how they dressed, how they groomed, and even regulated how drivers smelled. Likewise, FedEx, rather than its drivers, decided what packages would delivered on a particular day, and at what times. Likewise, FedEx would structure its drivers workloads to ensure they worked 9.5 to 11 hours a day. Moreover, the drivers would be required to bring along their FedEx manager for up to four ride-alongs a year to “to verify that [the driver] is meeting the standards of customer service”
The Ninth Circuit Court of Appeals found that this amount of control was enough to make the drivers “employees” rather than drivers under Oregon and California law:
Viewing the evidence in the light most favorable to FedEx, we conclude that plaintiffs are employees under both the right-to-control and economic realities tests.
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Oregon’s right-to-control test requires courts to weigh four factors: “(1) direct evidence of the right to, or exercise of, control; (2) the furnishing of tools and equipment; (3) the method of payment; and (4) the right to fire.”
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In light of the powerful evidence of FedEx’s right to control its drivers, none of the remaining right-to-controlfactors sufficiently favors FedEx to allow a holding that plaintiffs are independent contractors.
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Viewing the evidence in the light most favorable to FedEx, we conclude that the OA grants FedEx a broad right to control the manner in which its drivers perform their work. The first and most important factor of the right-to-control test thus strongly favors employee status. The other three factors do not strongly favor either employee status or independent contractor status.
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California’s right-to-control test requires courts to weigh a number of factors: “The principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.” California courts also consider “several ‘secondary’ indicia of the nature of a service relationship.” The right to terminate at will, without cause, is “[s]trong evidence in support of an employment relationship.”
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Additional factors include: (a) whether the one performing services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether or not the work is a part of the regular business of the principal; and (h) whether or not the parties believe they are creating the relationship of employer/employee.
Viewing the evidence in the light most favorable to FedEx, the OA grants FedEx a broad right to control the manner in which its drivers’ perform their work. The most important factor of the right-to-control test thus strongly favors employee status. The other factors do not strongly favor either employee status or independent contractor status. Accordingly, we hold that plaintiffs are employees as a matter of law under California’s right-to-control test.
The procedural history of Slayman and Alexander is somewhat complicated. Basically, several drivers in about 40 states sued FedEx for failure to pay overtime and a host of other claims, including fraud, under the laws of each state (The Ohio case involved claims of unjust enrichment and denial of FMLA benefits). Eventually each case became part of a larger class action, and they became part of a larger “multidistrict litigation” (“MDL”) case. Thus, while Slayman and Alexander apply California and Oregon law, the decisions will have implications nationwide, including in Ohio
If you believe that your employer is not paying you all of your wages for all of your lawfully earned overtime compensation at a rate of one and half times your normal wages as requires under the Federal Fair Labor Standards Act or Ohio Minimum Fair Wage Standards laws or you are an nonexempt employee that has been misclassified as exempt or independent contractor, 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.
Disclaimer:
The materials available at the top of this overtime, wage and hour web page and at this employment law website are for informational purposes only and not for the purpose of providing legal advice. If you are still asking, “Am I entitled to overtime?”, “Does my job have to pay me for …”, “My paycheck is not right…” or “What do I do if…”, the 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 the top of this page or through this site are the opinions of the individual lawyer and may not reflect the opinions of Spitz, The Employee’s Law Firm, Brian Spitz, or any individual attorney.