Are You An Independent Contractor Or An Employee?

The Department of Labor has issued a new “Administrator’s Interpretation” that provides a narrower definition of what it means to be an “independent contractor.” Determining your work classification, whether you are an employee (exempt or non-exempt) or an independent contractor, has significant implications. Employees are generally entitled to benefits that are not provided to independent contractors. Moreover, non-exempt employees are entitled to earn overtime compensation, whereas exempt employees and independent contractors are not. This amount can be substantial, at one and a half times the standard rate of pay for all time worked in excess of 40 hours.

The new interpretation states that the current reliance on the degree of control a worker/employer has over their job should not carry as much weight in determining employment status. Instead, the emphasis should be on whether someone satisfies the “economic realities” test. The economic realities test considers various factors, such as whether the work is an essential part of the employer’s business, whether it requires special skill and initiative, the permanence or indefiniteness of the worker-employer relationship, and the degree and nature of the employer’s control.

The Department of Labor further reasoned that when combining this test with the broad definition of the word “employ,” most workers would be considered employees under the Fair Labor Standards Act (FLSA). This is good news for many workers seeking greater benefits.

For more information or if you have any questions concerning your classification, please contact the experienced Georgia overtime lawyers at Buckley Bala Wilson Mew LLP for an immediate consultation.