Employees must be paid overtime, unless they're exempt for some reason, while independent contractors are not covered by overtime laws or workers compensation laws and a variety of other laws covering employees. A recent case decided by the Sixth Circuit, which covers Kentucky, shows how to determine whether someone is an employee or an independent contractor for purposes of overtime.

The individuals involved worked for a company called Off Duty Police Services (ODPS). They provided private security and traffic control services around Louisville; for instance, a typical day might consist of "sitting in a car with the lights flashing or directing traffic around a construction zone." Some of the workers were sworn police officers who worked for ODPS as a side job; some were not and ODPS was their full-time job. ODPS provided them with some of the equipment and gear, but they were required to buy some with their own money. All were required to use police-style vehicles which they had to buy or provide themselves in their work. ODPS had some work requirements and did some supervision, although the amount and degree was disputed. 

A worker would be contacted when a job came up, which they could accept or reject. There was much testimony that if a worker rejected a job, he or she would be penalized by not getting called for a while, a process referred to "as being placed in 'time out.'"

There are six factors used in what is called the "economic reality" to determine whether a worker is an employee or an independent contractor for purposes of overtime:

(1) the permanency of the relationship between the parties;

(2) the degree of skill required to render the services;

(3) the worker's investment in equipment or materials for the task;

(4) the worker's opportunity for profit or loss, depending on their skill level;

(5) the degree of control exercised by the alleged employer; and,

(6) whether the service is integral to the alleged employer's business.

The weight assigned these factors will vary depending on the circumstances.

The case is Acosta v. Off Duty Police Services

Lexington, Kentucky overtime lawyer Robert Abell represents individuals and employees to get the overtime pay or wages they've earned but not been paid; contact him at 859-254-7076. 

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