The difference between employees and independent contractors has important implications employers should know about. The Fair Labor Standards Act (or FLSA) is one of the main reasons why this distinction matters, as it applies exclusively to employees. In other words, independent contractors are not protected by the FLSA.
If you are an employer, it is critical for you to understand the difference between these two different worker classifications in order to 1) make sure your business complies with the FLSA, and 2) avoid misclassifying an independent contractor, which would result in the Department of Labor charging you with an FLSA violation.
The Difference Between Employees and Independent Contractors Matters
As mentioned above, the Fair Labor Standards Act only applies to workers classified as employees. In essence, the purpose of the FLSA is to protect employees from issues regarding overtime and pay, providing an explicit definition for cases where employees are “on the clock” and stating that employers must pay non-exempt employees overtime when they work more than the typical number of hours in a workweek. In addition, the FLSA ensures, among many other things, employees are paid the federal minimum wage.
However, given the fact that the FLSA applies exclusively to employees, countless workers throughout the United States are not protected, as independent contractors make up a significant portion of the overall U.S. workforce. Real estate agents, bloggers, videographers, and stockbrokers are just a few of the types of workers that fall within the category of independent contractors.
Classifying Workers – What You Need to Know
In 2020, the Department of Labor issued a proposal for a new method to determine who is should be classified as an independent contractor, which involves considering a number of factors in a case-by-case analysis that must take into account the unique circumstances of each individual worker. Under this new method, the Department of Labor will apply a test known as the “economic reality test” to classify workers. This test is essentially a tool that will help analyze a worker’s situation with respect to how dependent on their employer they are. The test will consider two “primary” factors and three “secondary” factors to make this analysis. Of course, the primary factors will have a lot more weight under the test than the secondary factors.
The economic reality test, however, can be quite complex, and applying it is not easy. This is why Florida business owners should hire an Experienced Employment Lawyer if they have any uncertainty about the classification of one or more of their workers.
Remember, making a mistake when classifying one of your workers can have severe consequences, so it is best to let an expert do it for you. This will not only keep you and your business out of legal trouble but also ensure your employees get the benefits to which they are entitled under the FLSA.
Contact a Top Florida Employment Lawyer for More Information
The difference between employees and independent contractors is extremely important in the business world. Whether a given worker is an employee or an independent contractor according to the Department of Labor has significant legal implications. Therefore, rather than risking classifying a worker incorrectly, you should consider working with a qualified Florida Employment Lawyer who can help you make sure every single person you hire is properly classified.
Attorney Romy B. Jurado and her team of highly skilled and experienced employment lawyers are only a phone call away. They will be able to help you no matter what you need. Contact Attorney Romy B. Jurado today by calling (305) 921-0440 or by emailing Romy@jflawfirm.com.