Joint Employment - Overtime

We are a leadership development company that organizes seminars.  Every detail of the seminar, including ticket sales, is handled by us.  In addition, our internal people attend the seminar and do various functions at it ranging from book sales, set up, security, hosting, etc.  For those that attend the seminar, they are paid on 1099 at a set rate of $300 for the weekend.  If they work more than 30 hours, they are paid at $10 per hour.  They are also reimbursed for expenses and the company pays their hotel bill.  Do you concur that the hours worked at the seminar by our own people should be overtime hours and that a 1099 relationship can not be established?

Comments

  • 5 Comments sorted by Votes Date Added
  • Yes, any hours your employees work over 40 in a week would be considered overtime hours. You cannot avoid paying overtime by turning them into independent contractors when they work over 40 hours at these seminars, because really they would still be your employees. If the DOL audited you, they would find that these are employees, not independent contractors, and you would owe backpay to the employees.
  • I would agree, although I do find it odd that your company would hint at making regular employees, independent contractors for seminars- be careful that you don't violate the Equal Pay Act as well.
  • Your topic title of Joint Employment confuses me a little.  Are the people being paid by your company?  If so, I don't see how they can be considered joint-employees.  Under the IRS 20-Question Test, it doesn't appear to me that they could be anything but employees.  The FLSA is extremely clear about all non-exempt workers being paid overtime for any hours worked in excess of 40 in any workweek, and is also clear about the workweek being any fixed period of 168 consecutive hours - consistent from week to week.  In fact, the law goes so far as to say that the employer "shall not permit" employees to work over 40 hours per workweek without payment of an overtime premium.  I absolutely concur that all hours worked for your company, paid by your company, must be overtime hours!

  • To add to what others have said, it is my understand from an accountant that an individual that receives both a W-2 and a 1099 from a company within the same year is a major IRS red flag, possibly causing an audit.  It is also supposed to be a red flag for the company. 
  • Its hardly possible for these employees to be considered independent contractors on weekends. Frankly, I'm amazed that a company in the business of seminar presentation (assuming some of the seminars might relate to HR) would even consider doing this. Whether or not the 'weekenders' actually 'like' the arrangement is also irrelevant, as one cannot legally waive his right to overtime..............so let's not suggest it's OK if it's at the employee's request.
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