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Are You An Independent Contractor Or An Employee?

The Department of Labor has just issued a new “Administrator’s Interpretation” that more narrowly defines what it is to be an “independent contractor.” Determining your work classification – whether you are an employee (exempt or non-exempt) or an independent contractor has great significance. Employees are generally entitled to benefits not provided to independent contractors. Further, non-exempt employees are entitled to earn overtime compensation whereas exempt employees and independent contractors, are not. At the rate of one and one-half times the standard rate of pay for all time spent working in excess of 40 hours, this amount can be substantial. The new interpretation provides that the current reliance on the degree of control a worker/employer has over his or her job should not carry as much weight in determining a worker’s employment status. Rather, the emphasis and focus of the analysis should be whether someone satisfies the “economic realities” test.

The economic realities test looks at a variety of factors, including:

Is the work an essential part of the employer’s business?

Does the work require special skill and initiative?

Is the relationship between the worker and the employer permanent or indefinite?

What is the degree and nature of the employer’s control?

The DOL further reasoned that the combination of this test, along the broad definition of the word “employ,” means that most workers are employees under the FLSA. This is good news for the many workers seeking greater benefits. For more information or if you have any questions concerning your classification, please contact the experienced Georgia overtime lawyers at Buckley Bala Wilson Mew LLP, LLC for an immediate