Misclassification

Under the law, different kinds of jobs have different laws and regulations that apply to them. For example, certain provisions of the Fair Labor Standards Act (FLSA) apply only to certain kinds of employees. However, sometimes employers will misclassify positions, either intentionally or inadvertently. If your position has been misclassified, you could be missing out on wages and benefits that you are entitled to receive, such as overtime pay. You should not hesitate to contact Atlanta wage and hour lawyer Brandon A. Thomas if you think that a misclassification may have happened.

A common way in which employees can be misclassified is when they are designated as independent contractors when they should be classified as employees. Independent contractors are responsible for paying certain taxes that employees are not responsible for covering. Furthermore, independent contractors are not covered by many employment laws, including the FLSA. That means that independent contractors are not entitled to overtime pay, minimum wage, and other benefits mandated by the law. Therefore, a misclassification of an employee as an independent contractor can make a significant financial difference.

Generally, courts will use the “economic realities test” to determine whether someone is an employee or an independent contractor. The economic realities test looks at several different conditions of employment to make this determination. The court will look at whether the work performed is an integral part of the employer’s business. For example, if the business is selling cookies, does the worker sell cookies (like an employee) or bake the cookies themselves that they sell to the business (like an independent contractor)?

Another thing that the court will consider is whether the worker will potentially face profit and loss. Thus, if someone is selling cookies, the court will look at who is at risk of losing money if the cookies do not sell. If the worker is the person who laid out the money for the ingredients and therefore may lose money, they are more like an independent contractor. However, if a worker is paid an hourly wage or commission, but they would not lose money besides the lost work hours, they are more like an employee. Similarly, the court will look at whether the employee has invested in equipment. Thus, if someone has bought a kitchen to make cookies, they are probably an independent contractor. If the only investment is comfortable shoes for selling the cookies, while the business invested in the equipment and storefront, they are likely an employee.

The courts will also look at whether the worker has special skills, whether there is a short- or long-term relationship between the worker and the employer, and how much control the worker has over their own pay and conditions. For example, a master baker who is paid to develop a recipe for cookies that they develop in their own kitchen, and who charges a set fee for the recipe, is more likely to be an independent contractor. Conversely, someone who is hired to work indefinitely as a counter person and is paid an hourly rate set by the employer is probably an employee. No single element of this test is determinative, however; the court will look at all of the elements and weigh the facts. As you can see, these inquiries are very fact-specific, so you should discuss your specific situation with an employment attorney.

Just because you are paid a salary does not mean you are not owed overtime wages. Employers frequently misclassify employees as exempt to avoid paying overtime wages. In other words, the FLSA covers some employees and does not cover others under specific provisions. Since the FLSA mandates overtime pay for employees who are covered, whether you are covered or not can make a big difference.

For example, employees who are classified as executive, administrative, professional, or outside sales are not covered by overtime laws. Generally, these positions will be salaried, but whether a position is or is not salaried is not determinative in itself. In order to determine specifically which positions are exempt, the courts will look at the percentage of time that an employee spends on different kinds of duties.

If your employer has misclassified your job or type of employment, you may be missing out on payment and other compensation that you are entitled to receive. The Law Offices of Brandon A. Thomas represents clients in misclassification cases in Atlanta and elsewhere in Georgia, and we are fluent in Spanish. Call us today at (678) 862-9344 or use the form on this website to schedule your free confidential consultation with an attorney. We also can assist you with other areas of wage and hour law, such as travel time wages or minimum wage claims.