independent contractor

How Do You Classify an Employee Versus an Independent Contractor?

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Although various employment statutes offer a variety of explanations as to what constitutes employee status versus an independent contractor, two primary criteria distinguish independent contractors from employees.

First, independent contractors agree on the desired work product and then control the means and manner of achieving the outcome. Second, independent contractors offer services to the public at large, not just to one business.

Keeping in mind that all of the factors of a worker relationship must be assessed and weighted and that no one factor is determinative, courts have used the following criteria to determine whether a worker is an employer or independent contractor:

– The nature and degree of control or supervision exercised by the employer
– The extent to which the services is part of the employer’s business
– The amount of the worker’s investment in facilities and equipment
– The worker’s opportunities for profit or loss
– The method of calculating the payment for work (ie- by time worked or by the job)
– The skill and judgment required for the independent enterprise to succeed
– Whether annual, vacation, or sick leave is given
– The intention of the parties regarding independent contractor or employee status.

Workers who are lower paid, lower skilled, lack bargaining power, have a high degree of economic dependence on their employer, and are subject to regular supervision and control are more likely to be considered employees. Workers who have “significant entrepreneurial opportunity for gain or loss,” and retain direction and control over their work, are more likely to be considered independent contractors.

The Law Offices of Payab & Associates is a Los Angeles based law firm with more than 17 years of experience in employment cases. Our office has successfully litigated many complex disputes including wrongful termination, sexual harassment, racial discrimination, wage and labor disputes, and retaliation cases.

Contact the Law Offices of Payab & Associates @ (800) 401-4466 or visit http://payablaw.com/ if you have any questions regarding your rights at the workplace.

3 Common Overtime Mistakes

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The federal Fair Labor Standards Act (FLSA) regulates the payment of overtime. Here are three common overtime mistakes:

Mistake #1: Misclassifying employees – some employers classify workers as independent contractors to escape liability for overtime wages. Courts look at whether an individual is “economically dependent on the business to which he renders service or is, as a matter of economic fact, in business for himself,” and they use a variety of factors to determine whether an individual is an employee or independent contractor.

Mistake #2: Exemption confusion – Paying an employee a salary does not necessarily make him exempt from overtime wages. Most employees who are exempt from overtime fall under the executive, administrative, or professional exemptions (also known as the white- collar exemptions), which require payment on a salary basis. However, for the white-collar exemption to apply, an employee must meet the duties test and be paid a minimum salary of $455 per week.

Mistake #3: Calculating the regular rate – employers should make sure to properly calculate employees’ regular rate of pay. Overtime is calculated at 1.5 times an employee’s regular rate for all hours worked in excess of 8 hours up to and including 12 hours in any workday and for the first 8 hours worked on the seventh consecutive day of work in a workweek. Further, double overtime is calculated as 2 times the employee’s regular rate of pay for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of 8 on the seventh consecutive day of work in a workweek. However, an employee’s regular rate is not necessarily the same as the hourly rate. If an employee’s only compensation is his hourly rate, the regular rate is the same as his hourly rate, and the overtime rate is 1.5 or 2 times that amount. If you provide any compensation over and above straight hourly wages, make sure you calculate any bonuses or compensations which must be included in the calculation of the regular rate.

The Law Offices of Payab & Associates is a Los Angeles based law firm with more than 17 years of experience in employment cases. Our office has successfully litigated many complex disputes including wrongful termination, sexual harassment, racial discrimination, wage and labor disputes, and retaliation cases.

Do you have any questions about your overtime wages? Contact the Law Offices of Payab & Associates @ (800) 401-4466 or visit http://employmentlawyersla.com/

The 5 Sins of Wage and Hour Management

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The 5 most commons sins managers and supervisors commit in paying, or not paying, employees what they are owed:

1. Failure to pay the minimum wage. “We’ll pay you $5 an hour until you learn the ropes; then you move up to $7 an hour.” This is illegal.
2. Failure to pay for all hours worked. “Be sure to stay close to your phone after work in case that customer calls in from the East Coast.” Employers must pay employees for all hours worked, even if the employee has volunteered to do the work without pay. Some examples include expecting employees to take customer calls off hours or insisting that they answer the phone during an unpaid lunch break.
3. Misclassifying as exempt. “Your title is Assistant manager; you’re exempt.” Companies may classify workers as exempt to avoid paying overtime and/or to avoid paying for extra hours worked. However, an employee’s title does not mean anything and the fact that the person is paid on a salary basis does not mean anything — it’s the job duties that determine whether a worker is exempt.
4. Misclassifying as independent contractors. “You’ll be working alongside our regular employees but you’ll be an independent contractor.” Many employers may classify workers as independent contractors in order to avoid payments that would have been made to employees on their behalf (e.g., Social Security). But many so-called “independent contractors” are actually employees. The more control the employer has over how the person does the job, the more likely that worker is not an independent contractor.
5. Failure to properly calculate and pay overtime. Employers can’t avoid their obligation to pay overtime. Under federal law, the employer is obligated to pay the employee at a rate of 1.5 times the regular rate for all hours worked over 40 in a workweek. Employees are also entitled to overtime pay for all hours worked over 8 hours a day. Finally, employers must pay employees at a rate of 2 times the regular hourly pay, if the employees works over 12 hours in one day.

Read More: http://goo.gl/EedPDh

The Law Offices of Payab & Associates is a Los Angeles based law firm with more than 17 years of experience in employment cases. Our office has successfully litigated many complex disputes including wrongful termination, sexual harassment, racial discrimination, wage and labor disputes, and retaliation cases.

Questions about your rights at the workplace? Contact the Law Offices of Payab & Associates @ (800) 401-4466 or visit http://employmentlawyersla.com/