Wage and Hour Laws in Atlanta
Wage and Hour Issues in Atlanta
One of the ways workers are cheated out of minimum wages and overtime pay is by being misclassified as an “independent contractor” instead of as an “employee.” Being classified as an independent contractor can have serious consequences for workers. First, employers generally withhold Social Security and Medicare taxes from employee paychecks and pay unemployment taxes on wages paid to an employee. However, they do not make such deductions from the pay of independent contractors and do not pay any part of the independent contractor’s taxes. This results in higher taxes for the independent contractor versus the employee earning the same pay. Further, independent contractors are viewed as being self-employed. If they lose their job, they may not be eligible for unemployment insurance payments.
So who is an independent contractor? The IRS has an excellent analysis of the factors considered in its Employer’s Supplemental Tax Guide, Publication 15-A, which can be viewed at http://www.irs.gov/pub/irs-pdf/p15a.pdf. Typically, independent contractors are people who follow an independent trade, business or profession and offer their services to the public for negotiated fees. Examples are lawyers, contractors and doctors. Whether a worker is an independent contractor or an employee is decided on a case by case basis. However, a key factor in determining if a person is an independent contractor is whether the person for whom the work is being done (the customer) is able to direct how the work is to be done, rather than just direct what the finished product should be. Independent contractors typically have their own customers, use their own tools, have their own places of business and perform the services at their own business location. They negotiate their fee with the customer and have the potential to earn a profit or a loss. Typically, the independent contractor is asked to complete a task and is free to decide the best manner to complete the task.
In contrast, employees typically do not have their own profession, use their employer’s tools, perform their work at the employer’s business location and are subject to supervision and direction from the employer as to the details of how the work is being done. Typically, they do not negotiate their fee with the customer, but with their employer. They do not have the opportunity to make a profit or suffer a loss, and are paid their wages whether or not the employer makes a profit or suffers a loss.
It is common for employers to tell workers that they are independent contractors and therefore will get paid a flat fee or straight time for their work. When the worker works overtime hours, he or she often receives no overtime pay. This is a violation of the Fair Labor Standards Act, even if the worker agrees to be paid as an independent contractor.
Anti-retaliation Provisions of the FLSA
One of the purposes of the Fair Labor Standards Act (“FLSA”) is to encourage employees to feel free to approach the Department of Labor with complaints about minimum wage or overtime violations. For this reason, the FLSA prohibits retaliation by an employer against any employee or former employee who complains in good faith about minimum wage or overtime violations to the Department of Labor or files a lawsuit. If retaliated against for such complaints, the employee can recover back wages, liquidated damages, damages for emotional distress, be reinstated to the job, and recover attorneys’ fees and costs of the litigation.
However, there is currently a conflict within the federal courts as to whether an employee’s internal complaint to his employer about FLSA violations is protected conduct for which the employee cannot be retaliated. For this reason, employees should consult an attorney before making any complaints to the employer to determine if your jurisdiction protects this conduct or not. Another reason the employee should consult an experienced FLSA attorney before complaining to the employer or the Department of Labor, is to make sure that the complaint is made to the proper person and in the appropriate manner so that the employer may not legally retaliate against the employee for making the complaint. As more than one court has held, “not all abstract grumblings or vague expressions of discontent are actionable as complaints.” Hagan v. Echostar Satellite L.L.C. 529 F.3rd 617, 626 (5th Cir. 2008).
