Employee or Independent Contractor?

A recently filed lawsuit against Amazon, Inc. has highlighted an issue that is a growing concern for workers across America – employment misclassification. Pursuant to the Fair Labor Standards Act (FLSA), whether you are classified as an employee or independent contractor can have a significant impact on both the benefits you are entitled to and your take-home pay.

In the recent wage and hour lawsuit, Amazon drivers have sued the company alleging that they are not independent contractors. Instead, they assert that they should be classified as employees and entitled to back wages, overtime, and benefits.

To help employers determine whether to classify a worker as an independent contractor or an employee, the Department of Labor has developed a test with six key factors. These include:

  1. Is the work provided integral to the company’s business?
  2. Does the worker or the employer control the worker’s opportunities for profit and loss?
  3. Does the worker or the employer provide the equipment/facilities necessary to perform the job?
  4. What is the level of the worker’s skill and initiative?
  5. What is the expectation of permanency between the worker and the employer?
  6. How much and what degree of control does the employer have over the work performed?

Additionally, the Internal Revenue Service (IRS) evaluates a few different factors to make this determination. These factors include:

  1. Does the company have the right to control how the worker performs his or her job?
  2. Does the company or the worker control the business aspects of the worker’s job, such as determining how the worker is paid, what expenses are reimbursed, and who provides needed tools and supplies?
  3. Is there a written contract detailing the employment arrangement?

While no one factor is determinative, taken as a whole, these factors provide guidance concerning whether you should be considered an independent contractor or an employee.

For more information, or if you have questions concerning whether you should be classified as a contractor or an employee, please contact the dedicated Atlanta wage and hour lawyers at Buckley Bala Wilson Mew LLP for an immediate case evaluation.