Independent Contractors – 

Misclassification / Unpaid 

Overtime Wages

In an effort to cut costs, some companies are illegally classifying workers as “independent contractors” rather than employees. This classification can exploit workers and deprive them of entitled minimum wage, overtime compensation, retirement and/or health benefits, FICA taxes, workers’ compensation, and unemployment.

The employer’s use of a Form 1099 does not automatically make an individual an independent contractor in the sense relevant to overtime and minimum wage laws.

Courts consider several factors to determine whether workers are independent contractors, including:

• the degree of control exercised by the employer over the workers;
• the workers’ opportunity for profit and loss and the workers’ investment into the business;
• the workers’ investment into tools and materials;
• the degree of specialized skill and independent initiative required to perform the work;
• the duration of the working relationship; and
• the extent to which the work is an integral part of the employer’s business.

No one factor is determinative; rather, courts look at all circumstances of a working relationship to determine the proper classification.

Our wage and hour team can help you evaluate whether you might be misclassified as an independent contractor and entitled to additional compensation.