Columbus Independent Contractor Misclassification Attorney
Independent contractors might perform work for a company, but they are not employees. Because they aren’t employees, employers do not have to pay them minimum wage, nor do they have to pay overtime if the contractor works more than 40 hours a week. Independent contractors also miss out on other benefits employees get, like unemployment compensation, workers’ compensation, and company benefits such as health insurance offered to employees.
Company executives are well aware of the cost-savings they can derive from using independent contractors to perform work instead of employees. But it’s not that simple. Just because your employer says you are an independent contractor doesn’t make you one. Even if you receive a 1099 instead of a w-2, have your own LLC or Employer Identification Number (EIN), or even if you signed an independent contractor agreement, it is not conclusive that you are an independent contractor. Instead, courts and the Department of Labor look at the totality of the circumstances surrounding your job. If they find that you have been misclassified as an independent contractor instead of an employee, you are entitled to compensation for all the unpaid wages and unpaid overtime you may have not been paid, whether intentionally or by mistake. The Columbus independent contractor misclassification attorneys of Brian G. Miller Co., L.P.A. can represent you and help make sure you get all the compensation due for the work you’ve done.
How to tell if you are an independent contractor or an employee
The question of who is an employee and who is an independent contractor is not always an easy one to answer. The most difficult cases tend to involve construction subcontractors, franchisees, volunteers, trainees, and people who work from home. However, even people who show up to work every day for the same company over months or years might still find their employer misclassifies them as independent contractors.
The Department of Labor (DOL) and the courts, including the Ohio Supreme Court and the U.S. Sixth Circuit Court of Appeals, have held that the answer to the question of the employment relationship depends on the facts of each case. At the heart of the matter is whether or not the employer has the right to control the manner or means of doing the work. However, the DOL and the Sixth Circuit evaluate each case by looking at the “totality of the circumstances” and the “economic reality of relationship” to answer this question.
Although there isn’t one authoritative definition of “independent contractor” or a single objective test, courts in the Sixth Circuit (which covers Ohio) consistently evaluate the worker’s relationship with the employer against seven factors in particular. These factors are:
- How permanent is the relationship?
- To what extent are the services rendered integral to the company’s business?
- How much control does the company exert over the worker?
- How much initiative and judgment does the worker exercise?
- Has the worker invested in facilities and equipment?
- What are the worker’s opportunities for profit and loss?
- Does the worker compete for jobs in the open market?
What factors aren’t considered?
Surprisingly, the Department of Labor and the courts have not considered the following factors to be relevant for determining whether or not an employment relationship exists:
- Where is the work performed?
- Is a formal employment agreement in place?
- Is the worker licensed by the state or local government?
- How and when is the worker paid?
The DOL’s new “Independent Contractor Final Rule” is no longer final
On January 7, 2021, the Department of Labor announced a new rule for determining independent contractor status under the FLSA.This rule went into effect on March 8, 2021. However, the rule was rescinded on May 5, 2021, with the rescission becoming effective May 6, 2021.
The rescinded rule would have significantly changed the economic reality test for determining independent contractor status by prioritizing two core factors over all the others, undermining the “totality of the circumstances” approach, and narrowing the factors to be considered from seven to five.
The current Department of Labor viewed the rule as an erosion of worker protections and moved quickly to rescind it. For now, we are back to the economic reality test described above. If you are unsure of your status as an employee or independent contractor, speak with an experienced Columbus wage and hour law firm that stays on top of the latest developments in wage and hour law at both the federal level and in Ohio.
Talk to a Columbus Employee Misclassification Attorney Today
If you think you might be misclassified as an independent contractor when you should really be enjoying a range of benefits and protections as an employee, reach out to Brian G. Miller Co., L.P.A. by calling (614) 221-4035 or contacting us online.