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OVERTIME: INDEPENDENT CONTRACTOR V. EMPLOYEE

August 4, 2016 | Posted in: FLSA

One of the largest issues for employers is whether to classify individuals as employees or independent contractors.  Classification as an employee or independent contractor effects the way an individual is paid and dictates whether an individual is protected by the Fair Labor Standards Act (FLSA).  Employees are protected by the FLSA, therby mandating employers to comply with its provisions regarding minimum wage and overtime pay.  Employers decide whether a person is an employee or independent contractor by analyzing his or her job duties.

Employees

The FLSA requires that most employees be paid at least the federal minimum wage for all hours worked and be paid overtime at time and one-half of the “regular” rate of pay for all hours worked over 40 hours in a work week for overtime.  For more information on how to calculate the “regular” rate of pay, see our recent blog post http://www.thefriedmannfirm.com/blog/ and the Department of Labor’s website http://www.dol.gov/whd/regs/compliance/whdfs23.pdf.

Therefore, if you are an employee, you are protected by the FLSA and must be paid minimum wage and not less than time and one-half of your regular rate of pay for all hours worked over 40 hours in a workweek.  The “regular” rate of pay will vary, depending on whether any non-discretionary bonuses or other types of compensation are included in your regular rate of pay.  If you are strictly an hourly employee, overtime calculations are fairly straightforward.

The FLSA provides an exemption from the FLSA for certain types of employees.  This means an employer is exempt from paying minimum wage and overtime pay, as mandated by the FLSA, if an employee falls into a certain classification of jobs.  Those exempt from the FLSA include executive employees, administrative employees, professionals, outside sales employees and certain computer employees.  For information on the professional exemption, click here http://www.thefriedmannfirm.com/the-flsa-professional-exemption-in-ohio/.  Other posts on the executive, administrative and outside sales employees will follow.

To qualify for an exemption, employees must generally be meet certain tests regarding their job duties and be paid on a salary basis of not less than $455 per week.  Information on the salary basis requirement can be found here: http://www.dol.gov/whd/overtime/fs17g_salary.pdf.  Information on job duties of each specific exemption can be found here: http://www.dol.gov/whd/overtime/fs17a_overview.htm.

It is always best to consult with an attorney to determine whether or not you are truly exempt.  Misclassification lawsuits (those where the employer incorrectly classifies employees as independent contractors) are extremely common.  Our Columbus Employment Lawyers can answer all of your questions and help you determine whether you have been correctly classified.

Independent Contractors

If you are an independent contractor, you are exempt from the protections of the FLSA and the employer does not have to comply with the FLSA minimum wage and overtime regulations.  Independent contractors are often paid on a “per job” basis.  For factors that are considered in deciding whether an individual is an employee or independent contractor, visit the Department of Labor’s website: http://www.dol.gov/whd/regs/compliance/whdfs13.htm.

If you believe you could be misclassified, contact a Dayton employment lawyer at The Friedmann Firm Today.