The Fair Labor Standards Act (FLSA) is a United States labor law that first established the right to minimum wage and overtime pay (the FLSA also prohibits oppressive child labor, but we won’t get in to that today). While this law covers the majority of Americans, there are a few exceptions that make employees exempt from these standards:
Salaried (Exempt) Employees
As a salaried employee you are paid a fixed amount of money each year, regardless of how many hours you worked. These employees are considered “exempt” from the minimum wage and overtime way regulations. Job titles don’t determine exempt status, in order to be considered exempt employees must meet certain standards to be legally considered exempt. Some employers intentionally or accidentally overlook these extra standards meaning many salaried employees are misclassified and aren’t actually ‘exempt’ and should be eligible for overtime pay.
Tipped Employees
Employers are expected to pay their employees minimum wage but can get away with paying a reduced hourly wage by using what’s called a tip credit. You’ve probably heard of this before in reference to restaurant workers or delivery drivers. Employees can be paid below the hourly minimum wage because the expectation is that they will make up this loss in tips. These employees hourly wages + tips must still add up to at least the federal minimum wage each paycheck. It’s important to note that these tips fully belong to the employee and the employer is prohibited from using these tips for anything other than towards the tip credit.
Independent Contractors
An Independent Contractor is someone who is not dependent on the business. Contractors work as needed for a company and are most likely subject to law/instruction from a staffing agency. As a non-employee independent contractors must pay their own taxes and are subject to self-employment taxes. But, just because you’ve been told by your employer that you’re an independent contractor, been given a 1099, or signed paperwork agreeing to be an independent contractor, does not mean you are legally an independent contractor under federal law. In fact, many employers have illegally and incorrectly classified their workers as independent contractors. Take a look at the fallout that Uber and Lyft and Microsoft faced after misclassifying their employees.
How We Can Help
One of our main practice areas is helping workers recover unpaid wages from employers that aren’t correctly following the Fair Labor Standards Act.
Whether you’re a waiter, assistant manager, or delivery driver, or anyone being taken advantage of by their employer, we are here to help. Contact us today if you think you have an unpaid wages, overtime, or misclassification case.
Independent Contractor Misclassification as explained by the Department of Labor
