Independent Contractor Overtime Pay Lawyers in Texas
The independent contractor overtime pay lawyers in Texas at Moore & Associates may be able to help you if you were incorrectly labeled an independent contractor by your employer so that your employer could avoid paying overtime benefits. Employers misclassify workers as independent contractors all the time, and it provides employers with illegal benefits while stripping workers of important protections, including overtime pay. Independent contractor misclassification occurs in a range of industries including:
- Misclassification of call center workers as independent contractors
- Misclassification of truck drivers as independent contractors
- Misclassification of home health care aides as independent contractors
- Misclassification of janitors as independent contractors
- Misclassification of nurses as independent contractors
- Misclassification of housekeepers as independent contractors
- Misclassification of taxi drivers as independent contractors
- Misclassification of construction workers as independent contractors
- Misclassification of salon or spa workers as independent contractors
- Misclassification of landscaping workers as independent contractors
In some of these industries, as many as one-third of workers might be misclassified. According to the Harvard Business Review, as many as one-third of construction workers in the south might be improperly classified as independent contractors when they are really employees. And, as many as 20% of employers misclassify their workers.
When a worker is misclassified as an independent contractor, they lose important protections, including the ability to seek time-and-a-half pay for overtime hours worked. If you believe you were misclassified as an independent contractor, reach out to the independent contractor overtime pay lawyers in Texas at Moore & Associates. Our overtime pay for independent contractor lawyers may be able to help you get reclassified and receive back pay overtime pay, and other benefits.
What are the Consequences of Independent Contractor Misclassification in Texas?
Independent contractor misclassification has major consequences for workers in Texas. According to the U.S. Department of Labor Wage and Hour Division, misclassification of employees as independent contractors can leave you stripped of important employee protections. These protections include:
- The right to receive time-and-a-half pay for overtime work.
- Federal minimum wage protections.
- The right to family and medical leave.
- Protection against job discrimination and protection against retaliation.
- Workers’ compensation insurance.
- Access to unemployment insurance if you lose your job.
- The requirement that you pay your Social Security and Medicare taxes out of your own pocket.
- Underpayment of wages due to lost overtime pay, failure of employees to pay workers for worked time (claiming that some time is “off the clock”), and placing employment tax burdens on the worker when it legally falls to the employer.
If you believe you were misclassified as an independent contractor and didn’t receive overtime pay or suffered other losses of benefits because of the misclassification, you may still have the right to fight your classification. The overtime pay lawyers for independent contractors in Texas at Moore & Associates may be able to help you. We can review your employment situation and help you fight for your rights.
In a legitimate “freelance” or “independent contractor” situation, both parties enter the arrangement understanding their rights and responsibilities. An independent contractor typically runs his or her own business, controls the hours he or she works, and keeps receipts for tax deductions and expenses. In a misclassification situation, workers are often blindsided by the categorization, receiving a 1099 without explanation, and may not have clarity even about what the distinction means for them. They may not be prepared to account for business losses and expenses. While their employer has arrangements to protect their tax interests, the workers may not understand their rights and responsibilities under the arrangement. For example, in a legitimate independent contractor arrangement, independent contractors can negotiate rates, especially when a job will require overtime work, or control how work is delivered so that they don’t have to work overtime. With misclassification, workers may not have control over whether they end up working overtime and may not have the ability to negotiate rates when they work overtime. The overtime pay lawyers for independent contractors in Texas at Moore & Associates may be able to help you if you find yourself in this situation.
How Can I Tell Whether I’m an Employee or an Independent Contractor in Texas?
If you have been denied time-and-a-half for overtime pay, and your employer tells you that you are not entitled to overtime pay because you are an independent contractor, how can you tell whether your classification is correct? Just because your employer tells you that you are an independent contractor doesn’t mean that your employer has classified you properly. The U.S. Department of Labor’s Wage and Hour Division has released a fact sheet that offers guidance on the “Economic Reality Test.” The Economic Reality Test is the legal test that determines whether a worker is an employee or an independent contractor. Does your relationship with your employer pass the economic realities test, making you an independent contractor? A Texas overtime pay lawyer for independent contractors at Moore & Associates can review your work situation and determine whether your situation passes or fails the Economic Realities Test. If it turns out that you are an employee and not an independent contractor, your employer might be responsible for paying your overtime pay, employment taxes, and more. It can sometimes be difficult to tell if you’re an employee or independent contractor, especially if your employer has misclassified you or is fighting to avoid its responsibility to pay overtime and other benefits. It can be helpful to have an independent contractor overtime pay lawyer in Texas at Moore & Associates on your side.
Let’s look at the six factors that are considered in the Economic Realities Test.
What is the Economic Realities Test for Independent Contractors?
The Economic Realities Test is a six-factor test used to determine whether a person is an independent contractor or an employee. What are the six factors? They are:
- Ability to profit and loss
- Ability to make investments
- Ability to control and self-direct the work
- The permanence of the arrangement
- Skill
- The centrality of workers’ role in the business
Ability to Profit and Loss
Are you able to negotiate your pay for different jobs, hire your own workers to complete jobs, purchase your own materials to complete work, or use your own marketing and advertising to seek additional work independent of the company for which you work? An employer might claim you are an independent contractor because you have the option to take on more work for more pay or ask you to take work when it is available, but this may not necessarily constitute a true independent contractor relationship. In a true independent contractor relationship, an independent contractor can seek out his or her own clients, negotiate pay with clients, and have the freedom to negotiate with clients about when and where work will be done. This is more than being able to say “yes” or “no” to a given shift.
Ability to Make Investments
If your employer is the person imposing costs upon you, such as requiring you to pay for your own training or your own tools, this wouldn’t be considered a true investment. For example, if you interview for a nursing and housekeeping job, but are then told that you are an independent contractor and will have to pay for your own uniform and your own cleaning supplies, but your employer tells you what uniform you must buy and what cleaning supplies you must use, this is not likely to result in a true situation where you are making an investment in your own business. Another example reported by Harvard Business Review was where short-haul truckers were required to purchase vehicles using financing provided by the people they worked for. Payment for their “tools” were then deducted from their pay.
Ability to Control and Self-Direct the Work
Does your employer set your pay rates and prices, or are rates and prices negotiated or set by you? Does your employer prevent you from working for other people? Does your employer supervise your work? If so, you might be an employee and not an independent contractor. In a true independent contractor situation, rates are typically negotiated, including ongoing negotiations if overtime work is required for a job given unforeseen circumstances. If the way you complete your work is directed by another person or party, this person or party is likely to be considered your employer.
Permanence of the Arrangement
Typically, a true independent contractor takes on work on a per-project base, and the work may not be continuous. Employers with seasonal work might try to take advantage of the seasonality of work to inaccurately label an employee as an independent contractor. For example, if you can only work your roofing or construction job in the summer, this doesn’t mean you are an independent contractor. If your employer directs which projects you take on and which construction sites you work on during your seasonal work, you are likely an employee. If, however, you negotiate directly with clients to perform specific projects on different sites and can seek out additional work or turn down jobs, you may be an independent contractor.
Skill
Do you provide specialty services for which you are specifically hired? An example of this might be a yoga teacher hired by a nursing home or nursing service to provide yoga classes to patients and clients, or an electrician who runs his or her own business of installing solar panels and is then hired to perform a specific solar panel installation on a given job site. Skilled workers can still be employees, however. If you are a skilled solar panel worker but do jobs for a construction company as directed by the company, you are likely an employee. And if you are a yoga teacher hired only to work at one yoga studio that sets your schedule, assigns you students, and tells you which class to teach and how to teach the class, you are likely an employee, as well.
The centrality of Workers’ Role in the Business
If your employer’s business could not continue to operate without your work, you are likely central to the business and would likely be considered an employee. A truck company cannot operate without its drivers, a construction firm cannot operate without its construction workers, a nursing agency cannot operate without its nurses, and a call center or remote call service cannot operate without its call center workers.
It can sometimes be challenging to determine whether you’ll pass the Economic Realities Test, especially if your employer has taken pains to use euphemisms or other strategies to try to improperly label you as an independent contractor. A Texas overtime pay lawyer for independent contractors can look at your situation and offer guidance. The Texas overtime pay lawyers for independent contractors at Moore & Associates are here to help and can help you fight for overtime pay if you have been denied benefits due to employee misclassification as an independent contractor.
What are the Overtime Rules for 1099 Employees in Texas?
There are no overtime rules for “1099 employees.” 1099 employees are exempt from the Fair Labor Standards Act that guarantees overtime pay to workers. 1099 employees are considered independent contractors. If you find yourself asking about the overtime rules for 1099 employees, you might be in a situation where you have been misclassified as an independent contractor by your employer. Confusion regarding overtime pay often arises in these situations. For example, it doesn’t even make sense to use the term “1099 employee” because a 1099 worker isn’t an employee. If you are on a 1099, and consider yourself an employee, then the problem likely lies with your employer’s classification of your work status as an independent contractor. In this case, you may want to reach out to the independent contractor overtime pay lawyer in Texas at Moore & Associates. Our attorneys can work to fix your status, and fight to help you get the overtime pay and other benefits you might deserve.
Do 1099 Contractors Get Overtime in Texas?
If you are a 1099 contractor and are being assigned overtime work without overtime pay, you may be a victim of employee misclassification. True 1099 contractors typically set their own work hours, choose when to end their workday, and can choose, if it is beneficial to them and a given job, to work “overtime.” But if your employer is telling you to work a longer shift, assigning you more hours, or asking you to take on more work, but then isn’t paying you overtime if you work more than a 40-hour week, you might be a victim of independent contractor misclassification. Determining your status can be challenging, especially if your employer stands to benefit from the misclassification. This is why more workers who have been denied overtime pay might seek assistance of overtime pay for an independent contractor attorney in Texas at Moore & Associates. While independent contractors do not receive overtime pay, if you were misclassified, you may be entitled to have your classification corrected and may be entitled to back pay and overtime. Have questions? Reach out to the independent contractor overtime pay attorneys in Texas at Moore & Associates today.
Protect Your Rights: Take the Next Steps
Workers who have been misclassified as independent contractors can lose out on thousands of dollars in wages and sometimes end up responsible for thousands of dollars in tax burdens that their employer passed on to them. If you were misclassified as an independent contractor, you might have lost thousands of dollars in overtime pay. If you were injured on the job, you might have lost thousands in workers’ compensation benefits. According to the Economic Policy Institute, a construction worker improperly labeled an independent contractor could lose as much as $16,729 per year; and home health aides who are improperly labeled independent contractors can lose as much as $9,529 per year. Call center workers who are improperly classified as independent contractors can lose as much as $8,490 a year.
Workers may be asked to sign independent contractor “contracts,” may be asked to incorporate or form an LLC by an employer or be given a 1099. Other employers might tell workers that they are not on the payroll and therefore are independent contractors. Other employers might tell workers that because they work from home or off-site, they are independent contractors. Just because your employer tells you that you are an independent contractor does not make it so. These factors, in and of themselves, don’t constitute an independent contractor relationship. The relationship must still pass the Economic Realities Test.
These are just some of the challenges that employee misclassification imposes on workers. If you have questions about your rights, reach out to the independent contractor overtime pay attorneys in Texas at Moore & Associates today. We may be able to help you fight back and receive the overtime pay and other benefits you may deserve under the law.
