Another serious major issue emerging in several wage and hour class actions is whether employees have been misclassified as an independent contractor as opposed to an actual employee. While many employers will attempt to classify employees as independent contractors for tax liability purposes, these misclassifications also have many implications in the employee’s entitlement to overtime wages and many other protections under the FLSA or other relevent state labor codes.
In determining an employee’s status as an independent contractor, there are many important questions to consider. Most of these questions relate to how much control the employer has over the employee (or indendent contractor).
Who is buying the materials?
Who invested in the equipment?
Are the services different from that of the employer?
Does the service require a special skill?
Are the services performed under the supervision of the employer?
Does the (supposed) independent contractor have employees?
Do they have other clients?
How is payment being made?
There are many other quetions and factors which the court considers in trying to determine an employee’s status. However, many employers can find unusual tricks that will make the analysis more complicated for courts. For example, in Hilton v. Apple, the class actions lawyers at Blumenthal, Nordrehaug, and Bhowmik alleged that Apple engaged their employees in Yellow Dog contracts in order to classify them as independent contractors and avoid paying them normal and overtime wages. A yellow dog contract is when the emplyees agree not to be part of a labor union.
It would be wise to contact a California labor attorney if you are unsure as to whether you are an employee or an independent contractor. First start with considering some of the questions addressed above and then consult with an employment lawyer for further clarification. Most employment attorneys — especially ones handle claims dealing with overtime claims — will offer free consultations for these types of cases. Contact one and claim lost overtime wages before the statute of limitations bars you from recovering in the near future.