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Employee Classification Blogs

The ‘Gig Economy’ and Your Wage Rights as an Independent Contractor

Technology companies, such as Uber and Lyft, tout the benefits of the “gig economy,” in which workers are designated as independent contractors, not employees. The problem is, independent-contractor status often does not benefit workers.

Being an independent contractor is, theoretically, beneficial because workers are their own boss, working whenever and as much as they want. However, the companies are typically the real beneficiaries of the independent contractor designation. This is because independent contractors are typically exempt from the protections of the Fair Labor Standards Act (“FLSA”), the federal statute that governs the payment of wages, such as a minimum wage or overtime pay. Accordingly, companies can entice workers to work long hours, for low pay, and without overtime.

Because of the lower associated costs, companies often misclassify employees as independent contractors. The problem is so rampant that the United States Department of Labor (DOL), the federal agency that enforces the Fair Labor Standards Act, is actively working with the IRS to combat employee misclassification.

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You May Not Be an Independent Contractor – and May By Eligible for Overtime

An independent contractor is generally thought of as someone who is compensated by another party without withholdings and taxes and who also is paid a fixed amount for a specific job or task. Cable TV installers, painters and manual laborers often are paid as independent contractors.

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Daily Labor Report Touts Smaller 'Boutique' Firms Like Lebau & Neuworth

A recent Bloomberg BNA Daily Labor Report article, citing Lebau & Neuworth attorney Steven Lebau, states, “Whether they work on the management side or the worker side of labor and employment law, the attorneys contacted by Bloomberg BNA touted the advantages of boutiques (small law firms such as Lebau & Neuworth) for both lawyers and clients. They said the lawyers collaborate more and are able to offer high-quality and expert services at lower prices.”

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Mythbusting: Independent Contractor vs. Employee Status

Employers continue to misclassify workers as independent contractors in order to avoid paying overtime and provide employee benefits. Lebau & Neuworth recently sued the same employer on three separate occasions over a five-year period because it continued to misclassify its employees.

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