YOUR LEADERS

IN EMPLOYMENT LAW

Independent Contractor Misclassification

Most independent contractors are actually employees that have been misclassified by companies that employ them. Being considered an employee of a company as opposed to an independent contractor generally entitles you to receiving minimum wage and overtime pay. Sometimes a company will incorrectly classify a worker as an independent contractor to avoid paying them proper wages in order to cut costs. This kind of misclassification is unfortunately all too common across all job industries.

However, there are laws in effect that help regulate this sort of misclassification. The Fair Labor Standards Act states that in order to have protection under federal law, a worker must show that they are an employee and not an independent contractor. It all comes down to the relationship between the worker and the employer. If a worker is economically dependent on the employer’s business, regardless of his/her skill level, the worker can be considered an employee of the company. On the other hand, if a worker is considered to be in a business for themselves that is economically independent of the employer’s then they can be categorized as an independent contractor.

In order to determine whether a worker has been correctly classified as an employee or an independent contractor, the Department of Labor has developed a test called the “Economic Reality” Test. This test considers certain factors of the worker’s job responsibilities which include:

  • What is the employer’s extent and degree of control over the worker?
  • What opportunities does the worker have for profit and loss?
  • How integral is the worker’s job performed to the employer’s business?
  • How permanent is the relationship between the worker and the employer?
  • What initiatives and skills does the worker show?
  • How much is invested into facilities and equipment by the worker and employer?

It is important to note that even if an employer made a worker sign an agreement stating that he/she was an independent contractor does not necessarily make it true. Also, how a worker is paid, including the frequency of the payment is not taken into consideration when determining the validity of an employer to employee relationship. No one factor weighs more heavily than another and all are taken into account when determining whether a worker is an employee or an independent contractor.

Most workers receive a 1099 at the end of the year rather than a W-2 should inquire as to whether they have been improperly misclassified. If it is determined that the independent contractor was actually an employee, they may be entitled to significant back pay for unpaid overtime and liquidated damages.

RECORD SETTING AWARDS AND SETTLEMENTS

FOR OUR CLIENTS


$19,100,000

$19.1 Million for Tipped Restaurant Workers.

Workers such as servers, bussers, runners bartenders, barbacks and other tipped workers at a large national casual dining chain alleged they were owed wages. Their claims included but were not limited to: unpaid overtime, spread-of hours, misappropriated tips, uniform-related expenses and unlawful deductions.

$15,900,000

$15.9 Million for Personal Bankers.

The firm was able to recover overtime compensation for personal bankers and others similarly situated at a national bank that operates hundreds of branches throughout the United States. Employees in affected positions claimed they were required to work more than 40 hours a week in order to meet sales quotas but were not compensated overtime for their pay.

$14,500,000

$14.5 Million for Spam Text Victims

Fitapelli & Schaffer was able to recover damages for recipients of unwanted promotional text messages from a popular young adult clothing retailer. The clothing company allegedly violated the Telephone Consumer Protection Act by sending text messages to recipients’ cellular phones without their prior express written consent.

$7,000,000

$7.0 Million for Bank Loan Officers

The firm was able to recover overtime compensation for loan officers at a national bank that operates more than hundreds of branches nationwide. Employees in affected positions claimed they were required to work more than 40 hours a week in order to meet sales goals but were not compensated overtime for their pay.

$5,900,000

$5.9 Million for Commissioned Car Salesmen.

One of the largest auto dealerships in the NYC Metropolitan Area agreed to pay owed wages to its car salesmen. The company was accused of failing to pay salesmen the proper minimum wage, overtime pay, commissions, and made unlawful deductions from their earned wages in violation of federal labor laws.

$4,300,000

$4.3 Million for Personal Bankers

Even though personal bankers at this nationwide bank were classified as exempt from receiving overtime pay, the company routinely required them to work in excess of 40 hours per week. There are federal laws that help protect workers from misclassification and in this situation; Fitapelli & Schaffer was able to recover unpaid overtime for personal bankers throughout the United States.

$4,300,000

$4.3 Million for Entertainers at Gentleman’s Clubs

F&S represented entertainers at a popular gentleman’s club in New York City that claimed the club failed to pay them the proper wages. The entertainers were able to recover owed wages that included unpaid minimum wages, overtime pay, spread-of-hours pay, unlawfully retained tips, unlawful deductions, and uniform-related expenses.

$3,600,000

$3.6 Million for Tipped Employees at Upscale Restaurant

Tipped workers alleged that a Mexican Michelin rated restaurant with 17 locations denied them overtime pay, minimum wages, and call-in pay. Our firm was able to recover wages for these tipped employees that included servers, bussers, bartenders, food runners and barbacks.

$3,400,000

$3.4 Million for Assistant Managers at Bank

Fitapelli & Schaffer successfully recovered unpaid overtime for assistant managers on a salary at a bank with locations nationwide. The salaried workers argued that they were wrongfully classified as exempt from receiving overtime when working over 40 hours per week.

$3,000,000

$3.0 Million for Bank Loan Officers

The fast food chain allegedly misclassified its assistant managers as salaried workers and considered them exempt from receiving overtime pay when working over 40 hours per week. Fitapelli & Schaffer was able to recover overtime compensation for all of the popular fast food chains’ assistant managers nationwide, with the exception of California.

$2,836,000

$2.9 Million for Tipped Restaurant Employees.

Fitapelli & Schaffer was able to recover unpaid minimum wages, overtime, spread-of hours, and unlawful deductions for tipped restaurant workers at a popular dining chain. Affected workers included servers, bussers, runners bartenders, barbacks and other tipped workers.

$2,250,000

$2.25 Million for Tipped Workers at Chain Sports Bar

proper minimum wage and overtime. Fitapelli & Schaffer helped the workers recover owed wages to the following positions: servers, bussers, bartenders, and other tipped workers under federal and state labor laws.

$2,000,000

$2.0 Million for Bank Loan Officers

Fitapelli & Schaffer was able to successfully recover unpaid overtime for loan officers at a nationwide bank that operates over one thousand locations across the United States. Loan officers for the company alleged that even though they were hourly employees and consistently worked over 40 hours per week they were working off the clock and not getting overtime pay.

$1,950,000

$1.95 Million for Health Care Workers

A New York based health insurance provider allegedly had its health care workers working over 40 hours per week but required they submit weekly timesheets that only showed they worked 37.5 hours. Fitapelli & Schaffer was able to successfully recover compensation for unpaid wages, overtime and spread of hours pay.

CONTACT

FITAPELLI & SCHAFFER LLP


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