OT for Independent Contractors

Do we need to pay OT if an independent contractor/contingency worker has put in more than 40 hours in a week for us?  We are in VA.



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  • I would say that first you need to see rather the person is actually an independent contractor only in name but is in reality a worker.  Here is what I have found. This is a reference taken from BLR Supplement:  

    VA Code Sec 60.2-212 (C): A worker is considered an employee unless; (1) The worker has been and will continue to be free from control or direction over the performance of such services, both under his contract and in fact. (2) The work performed is either outside the principle's usual course of business, or performed outside of the principle's business premises, or the worker is engaged in an independently established trade, occupation, profession, or business.

    If your worker falls outside of this definition for VA workers then yes they are subject to wage and hour law and would have to be paid overtime. Check with your employment law attorney but I think I am correct on this.

  • Many employers have mislabeled people "independent contractors" when in fact they are employees (and entitled to overtime pay).  Independent contractors aren't employees under the Fair Labor Standards Act.  Therefore they have no right to overtime pay. However a contract alone doesn't establish independent contractor status.There are several factors a court or the Department of Labor would examine. The Department of labor has some basic info on independent contractors at: http://www.dol.gov/esa/whd/regs/compliance/whdfs13.pdf


  • A contingency worker is not necessarily a contractor. A contractor is not necessarily a contractor. Just like calling someone a manager doesn't make them exempt from the minimum wage and overtime provisions of the Fair Labor Standards Act, calling someone a contractor doesn't make them not an employee.

    There are various tests. The IRS test is pretty commonly followed but courts have established other factors as well. Who did the training, who provides the tools, who directs the manner in which the work is to be performed, and whether or not the contractor can actually profit (versus simply being a wage slave without the protections and benefits of being an employee) are some of the big ones but there are lots of little ones also.

    Get the contractor thing wrong and you become eligible for payment of back overtime wages. Tell him what else he's won, Bob!  OK, TX!  You could also end up with benefits administration liability (e.g., back health benefits and costs realized by miscategorized workers during the time frame they were miscategorized and thereby denied benefits).

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