Are “Independent Contractors” Entitled to FLSA Overtime Wages?

worker.jpgIndependent Contractors are not protected by the overtime wages provisions of the Fair Labor Standards Act (FLSA). However, disputes arise frequently over whether an individual is an independent contractor or an employee entitled to overtime pay.

There is no simple measurement for making the determination. The United States Department of Labor has published an advisory listing pertinent indicia. Florida’s workers’ compensation statute 440.02(15)(d) contains a more thorough list. (Since the employee vs. independent contractor dispute also arises in the workers’ compensation forum, this is an excellent statute to reference. Except for independent contractors working or performing services in the construction industry — see 440.02(15)(c)3 — independent contractors in Florida are not entitled to workers’ compensation benefits.) Case law should also be considered.

Significant IC v. employee considerations include:

  • the nature and degree of control by the principal (examples: Who decides on what hours to be worked? Who is responsible for quality control? Does the worker work for any other company(s)? Who sets the pay rate?)
  • the amount of the worker’s investment in facilities and equipment (examples: Is the worker reimbursed for any purchases or materials, supplies, etc.? Does the worker use his or her own tools or equipment?)
  • does the worker have a company and is the company being paid for the work?
  • does the worker have a federal employer identification number?
  • may the worker realize a profit or suffer a loss in connection with performing work or services?

The dispute is fact intensive. It often takes sworn testimony and documentation to sort it out.

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