You Might Not Be an Independent Contractor under the FLSA

When employers misclassify you as an independent contractor in Nashville, Chattanooga, Memphis, or Jackson, an attorney is here to help

According to the Wage and Hour Division (WHD) of the United States Department of Labor (DOL) “misclassification of employees as independent contractors presents one of the most serious problems facing affected workers, employers, and the entire economy.” In 2014 “WHD investigations resulted in more than $79 million in back wages for more than 109,000 workers in industries such as the janitorial, temporary help, food service, day care, hospitality, and garment industries.”

If your employer has reclassified you as an “independent contractor,” the Tennessee wage and hour attorneys at Gilbert Russell McWherter Scott Bobbitt, PLC would like to hear from you. The Firm has a long, successful record of protecting the rights of employees in Tennessee in both state and federal courts.

The disadvantages of being an independent contractor

As an “independent contractor” you are not eligible for:

  • Overtime pay
  • Unemployment insurance
  • Workers’ compensation
  • Group health insurance
  • The employer’s contributions to Social Security and Medicare

In fact, being an independent contractor means you are “self-employed.” You may have to begin paying quarterly estimated withholding and self-employment taxes. You will most likely be paid on an hourly or per project basis. As an independent contractor, you will receive a 1099 for your tax return rather than a W2.

You may be an “employee” under the FLSA

In some cases, workers are misclassified as independent contractors so the employer can avoid paying out these benefits. Yet, according to their job functions and duties, they really should be categorized as an “employee.” The Fair Labor Standards Act (FLSA) is a federal law that helps make that determination.

For the FLSA to apply, there must be an “employment relationship” between the parties. In making the determination that an employment relationship exists, the WHD gives the term the broadest construction: “covering work that the employer directs or allows to take place.” It also takes into account the degree of employee dependence on the employer. By WHD’s definition, most workers are “employees,” and not “independent contractors.”

The U.S. Supreme Court has ruled that the following factors can be used to determine whether a person is an independent contractor under the FLSA:

  • Whether their services are an integral part of a company’s business. This points to employee status.
  • The permanency of the relationship. The more permanent the relationship, the more likely it is that the person is an employee.
  • Whether the person has invested in facilities and equipment. If so, this points to independent contractor status.
  • How much control the company has over the person. The more control, the more likely it is that the person is an employee.
  • Whether the person has opportunities to make a profit or suffers a loss. As opposed to always earning a set amount of money no matter what happens, like an employee.
  • Whether the person competes in the open market. If so, this points to independent contractor status.
  • The extent to which the person operates a truly independent business. The more independence, the more likely the person is an independent contractor.

If your job seems more in line with being an employee rather than an independent contractor, you may have cause for legal recourse. Contact a Tennessee wage and hour lawyer at our Firm for more information.

If your employer has misclassified you as an independent contractor, ask a Tennessee lawyer for help

The Tennessee wage and hour attorneys at the Gilbert Firm, with more than eighty years’ collective experience, have built a solid reputation as employment law advocates. We are licensed to practice in both federal and state courts, and can represent you with equal skill and determination before both federal and state wage and hour regulatory agencies. If you believe you are being wrongfully classified as an independent contractor and deprived of the protections of the FLSA and state laws, we want to hear from you. Please call 888.354.FIRM (3476) to discuss your complaint with an experienced Tennessee wage and hour lawyer, or fill out our contact form to schedule a free, no-obligation consultation. Our offices are conveniently located in Nashville, Chattanooga, Memphis, and Jackson.