Formal employees in the United States who are not exempt from the Fair Labor Standards Act (FLSA) have certain rights regarding their hourly pay and overtime pay. Non-exempt employees have the right to minimum wage, and their wages must increase when they work more than 40 hours per week.
Those who are classified as contractors are exempt from the FLSA laws. Employers often see an advantage to having employees who are exempt from FLSA laws, because they do not have to pay overtime or maintain other wage and hour regulations. This is why many workers fall into the trap of being misclassified. If you believe that you are misclassified as a contractor, it is important to verify this, because you may be entitled to compensation.
What is the definition of a contractor?
An independent contractor is a worker who usually engages in temporary projects, using their own equipment and materials. They operate fairly independently from the business they are contracting for. For example, they may work remotely, or may work within the office for a pre-determined amount of time. Independent contractors also have the responsibility to pay their own taxes.
What can I do if I believe I’m misclassified?
If you believe that you fulfill the definition of a permanent employee rather than a contractor, you may be missing out on benefits such as overtime pay, vacation time and workers’ compensation.
You should take action to get the compensation you deserve if you have been working as a misclassified contractor for a significant amount of time. You may be entitled to backpay for previous overtime work.