Whether you are classified as an "employee" or "independent contractor" can have wide-ranging impact, because to name one thing, only employees have a legal right to minimum wage and overtime, under the Federal Labor Standards Act (FLSA). Further, just because an employer calls someone an "independent contractor" is not the last word. The law considers the facts on the ground, so to speak, regardless of labels. An ongoing New York federal court case raises this issue again with a casino tour guide. Up North in New York, a casino tour guide was paid $50 per day, plus meal tickets and tips, for selling bus tickets from New York City to a casino, for travelling on the bus there and back with the patrons, and for allegedly remaining five hours at the casino while everyone gambled. Rui Xiang Huang v. J&A Entm't Inc., 2012 U.S. Dist. LEXIS 184727 (E.D.N.Y. Dec. 3, 2012). The guide sued the employer for minimum wage and overtime for all hours involved. The bus company has tried to dismiss the suit because they labeled the guide an "independent contractor." So far, a magistrate judge has recommended the suit go forward. If the tour guide was required to remain at the casino, assist patrons, and attend meetings—even while gambling a bit and enjoying free meals—then the guide is likely an employee entitled to minimum wage and overtime protections under federal law. The New York Court noted that workers are employees for the purposes of the FLSA based on the facts on the ground: the "totality of the circumstances" and "economic realities" of the working situation. Maryland federal courts emphasize the "economic realities" test. Schultz v. Capital Int'l Sec., Inc., 460 F.3d 595, 603 (4th Cir. 2006). Broadly speaking as the Court said in Schultz, a worker is more likely an employee if "dependent," and more likely an independent contractor if "in business for themselves." Of course, the issues become complicated in each individual situation. Let’s look at it this way based loosely on the Schultz case: A hypothetical security guard works five 12-hour shifts, and works 60 hours per week. That guard is entitled by law to twenty hours of overtime pay as an employee under the FLSA. As in independent contractor, he or she gets overtime if the employer grants it. Further many people don’t realize that if an employer requires workers to come to a job site and be on call, employees may very well be working for purposes of federal law. U.S. Department of Labor Regulation (29 CFR 778.223). Labeling time 'down time' and not paying people for it does not always cut the mustard. If you believe you are being wrongly labeled an independent contractor, and wrongly being refused and denied overtime or minimum wage compensation for all your hours worked, you might be right. We may be able to help. Call us.
