{"id":1717,"date":"2018-03-06T18:15:57","date_gmt":"2018-03-06T18:15:57","guid":{"rendered":"https:\/\/www.jacksonwhitelaw.com\/az-labor-employment-law\/?page_id=1717"},"modified":"2023-05-24T17:17:25","modified_gmt":"2023-05-24T17:17:25","slug":"do-independent-contractors-get-overtime","status":"publish","type":"post","link":"https:\/\/www.jacksonwhitelaw.com\/az-labor-employment-law\/blog\/do-independent-contractors-get-overtime\/","title":{"rendered":"Do Independent Contractors Get Overtime?"},"content":{"rendered":"

While there is a lot of gray area regarding the difference between employees<\/a> and independent contractors<\/a>, the law is quite clear in this regard\u2014independent contractors are not entitled to overtime pay<\/a>. In fact, employers aren\u2019t required to pay wages or provide benefits to an independent contractor because they aren\u2019t a W-2 employee on payroll. Where the gray area comes into play is with the distinction between an independent contractor and an employee. Unfortunately, it\u2019s not uncommon to see employers deliberately misclassify employees as independent contractors to save money in wages and benefits.<\/p>\n

The basis of federal wage law\u2014the Fair Labor Standards Act<\/h2>\n

The Fair Labor Standards Act (FLSA<\/a>) was passed in 1938 to put a floor under wages and a ceiling over work hours. This is the federal law that establishes the minimum wage, requires time-and-a-half pay for overtime wages, and imposes recordkeeping requirements that hold employers accountable for tracking their employees\u2019 wages and time worked. In contrast to many other federal employment laws that only apply to employers with 15 or more employees, the FLSA covers any business that engages in inter-state commerce. That includes any business that deals with customers or prospective customers in multiple states, or that order product or materials from out-of-state.<\/p>\n

The important thing to remember with the FLSA is that it only applies to employees, not independent contractors. According to the FLSA, an employee is one who follows the \u201cusual path of an employee and is dependent on the business which he or she serves\u201d (WHD Fact Sheet 13<\/a>). In contrast, an independent contractor is someone who is engaged in their own business and works with the employer on a contractual basis. As such, the employer-employee relationship applicable under the FLSA is defined by \u201ceconomic reality,\u201d not by any technical concepts or common law standards.<\/p>\n

Common problems with the FLSA<\/h2>\n

There are a number of problems that can arise from the ambiguity of the employee-employer relationship under the FLSA:<\/p>\n