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NOVA Legal Beat: Wrongly Classified as an Independent Contractor?

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Editor’s Note: This sponsored column is written by Mathew B. Tully of Tully Rinckey PLLC, an Arlington firm that specializes in federal employment and labor law, security clearance proceedings, and military law.

Q. My employer refuses to pay me overtime, claiming I’m an independent contractor. But I’m not. I’ve been working for this company for years. What can I do?

A. Employers often try to dodge responsibility for paying workers overtime by classifying them as independent contractors rather than employees. The Fair Labor Standards Act (FLSA) requires employers to pay employees overtime for hours worked exceeding 40 hours per week.

Independent contractors can provide services to a business, just as employees do. But independent contractors are self-employed rather than employed by the business they serve. Of course, differentiating an independent contractor from an employee can be quite difficult. It is even possible for some independent contractors to become employees over time if their relationship with the contracting business changes.

“In determining whether a worker is an employee covered by the FLSA, a court considers the ‘economic realities’ of the relationship between the worker and the putative employer,” the 4th U.S. Circuit Court of Appeals said in Schultz v. Capital Integration Security (2006).

To determine whether someone is an employee or independent contractor, courts will conduct what is known as a Silk test, which is named after a 1947 U.S. Supreme Court case. As the 4th Circuit explained in Schultz, this test consists of six factors:

  1. the company’s ability to control how work was performed;
  2. opportunities to reap profits or incur losses, depending on the worker’s managerial skill;
  3. the worker’s investment in equipment or hiring of other workers;
  4. skill requirements;
  5. whether the working relationship was temporal or long lasting; and
  6. “the degree to which the services rendered are an integral part of the putative employer’s business.”

After weighing these Silk factors, the U.S. District Court for the Eastern District of Virginia in Kennedy v. A Touch of Patience Shared Housing (2011) concluded the plaintiff, who had sued for unpaid minimum and overtime wages, was not an independent contractor as the defendant had claimed.

She actually qualified as an employee under the FLSA. The plaintiff performed a variety of services for a housing facility operator, including, cooking, serving meals, cleaning, and helping residents with household tasks, such as laundry and taking medication.

The court in Kennedy noted that the plaintiff claimed she had not exerted supervisory or managerial control “and exercised no control, discretion, or independent judgment with respect to her own duties.” She was paid in fixed cash amounts “at generally regular intervals” rather than reaping or incurring managerial skill-dependent profits and losses.

Further, over four and a half months she worked at two facilities and performed tasks that did not require special skills. Lastly, the plaintiff had claimed her services “were integral to defendant’s business.”

Workers who believe they have been misclassified as independent contractors should consult with an experienced employment law attorney, who could prepare an FLSA lawsuit. Employers, too, should consult with an attorney to determine whether certain workers should be classified as employees or independent contractors.

Mathew B. Tully is the founding partner of Tully Rinckey PLLC. Located in Arlington, Va. and Washington, D.C., Tully Rinckey PLLC’s attorneys practice federal employment law, military law, and security clearance representation. To speak with an attorney, call 703-525-4700 or to learn more visit fedattorney.com. 

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.