Do Independent Contractors Get Overtime in Texas?
1099 Employee Rights in Texas
Employers sometimes illegally attempt to save money by wrongly classifying their employees as independent contractors. If an employer wrongly classified their employees with this title, those employees may not receive vital protections like minimum wage, compensation for hours worked overtime, unemployment benefits, or worker’s compensation. Additionally, some employers purposefully fail to pay overtime wages to their independent contractors. So, do independent contractors get overtime? What other rights are independent contractors entitled to?
At Leichter Law Firm, our unpaid overtime lawyers know that most workers, by law, are entitled to receive overtime pay. However, many employers try to short their employees and independent contractors of the overtime pay they earn. If your employer has failed to pay you for overtime that you are entitled to, our labor and employment lawyers are here to help.
If you believe that you do not have a sense of control over how you do your work, your employer may have wrongfully classified you as an independent contractor. If you want just compensation for this wrongful employment classification, please do not hesitate to call Leichter Law Firm at (512) 495-9995 for help with your labor law dispute. We will ensure you understand your legal rights and have the necessary tools to fight for them.
What Is an Independent Contractor?
An independent contractor is an individual who, in pursuing an independent business, undertakes to do a specific piece of work for someone or something else, using one’s own means and methods. Basically, the idea is that an independent contractor has control over how his or her work is being done, even though his or her work is being done for someone else. To put it simply, they are self-employed.
Common examples of independent contractors include doctors, lawyers, accountants, and even dentists. The person or business owner who works with an independent contractor and pays for the services may only control the result of the work. They may not control what work is done or how it is done. If any kind of employer-employee relationship exists, the worker is not an independent contractor.
What Is the Difference Between an Employee and an Independent Contractor?
Distinguishing between an independent contractor and an employee is a complicated legal problem. Generally speaking, the right to control one’s work is the main factor in determining if someone is an independent contractor or an employee. An employer generally has the right to select, control, and discharge an employee, but an independent contractor is not under the direct control of an employer.
The bottom line is that determining whether you are an independent contractor or an employee is a tough and tricky legal issue. If someone is an employee, their employer will withhold Social Security, income tax, and Medicare taxes from their wages. These are known as payroll taxes. Those taxes are not withheld from their wages when it comes to independent contractors. Importantly, many labor and employment laws do not apply to contractors.
How Will a Court Find “Control” Over an Employee or Independent Contractor?
The crucial component in determining if someone is an independent contractor or an employee is the right to control the individual’s work. To find control, the courts have turned to the following factors:
- The degree of control exercised by the alleged employer
- Skill and initiative required to perform the job
- The extent of the relative investments of the worker and the alleged employer
- Degree to which the worker’s opportunity for profit and loss is determined by the alleged employer
- The permanency of the relationship
If your employer has been telling you when, where, or how to complete your work, you may be wrongfully classified as an independent contractor. This deprives you of benefits, overtime pay, and other compensation you would be entitled to if you were correctly classified as an employee. Please contact a Fair Labor Standards Act (FLSA) lawyer if you think you have been wrongfully classified as an independent contractor. Leichter Law will help you get the money you deserve.
Independent Contractor (1099) Employee Rights
Although many traditional employment benefits, such as health insurance, minimum wage, and workers’ compensation are not available for 1099 employees, they have other rights that regular employees do not. Specific rights that contractors have that employees do not include the following.
As a 1099 employee, one of the most significant benefits is independence. Clients that you have a written contract with do not have any control over how you implement your services, the hours you work, your rate of pay, where you work, or whether or not you can hire subcontractors. Many contractors even have intellectual property rights. However, retaining these rights is often contingent on the language in your written agreement with the client. If you are unsure of whether or not you can keep IP rights, speak with a skilled employment lawyer in Texas.
As the name suggests, an independent contractor has the right to a contract agreement with their client. Rather than having an employee-employer relationship, you would have a client-consultant relationship. Before ever beginning work for a client, you can and should have a signed contract in place. The contract essentially replaces standard employee benefits that contractors don’t get. These contracts are strict, and either party has the right to pursue legal action if there is a breach of contract.
Remember that the language in a contract should always be as clear as possible. You may even want to consider outlining the client’s termination rights. Otherwise, they may terminate their contract with you at any time. Termination rights exist to outline the possible reasons for termination, the notification period before termination, and even reimbursement for early termination.
Many contractors own and manage their own businesses, hence why they are self-employed. Contractors make all major decisions about their business and have the right to file a breach of contract lawsuit if a client fails to pay. Completely managing their own business is one of the many perks that 1099 employees enjoy.
You also have the right to advertise your work and have multiple clients. Contractors often have more than one client and a contract for each. Many contractors work with multiple clients a week, sometimes multiple in a single day. They are not legally obligated to work with only one client even if they still have obligations to that client.
Let’s say that you are actually an employee at a company rather than a contractor. Sometimes, employers try to misclassify their employees as 1099 workers. They often do this to deny their workers paid overtime, vacation pay, pension plans, and other benefits. However, this practice is illegal and could land employers in a lot of trouble with the Internal Revenue Service (IRS). Federal law forbids employers from misclassifying their full-time employees as 1099 employees.
You also have the right to collaborate with other contractors and subcontractors for your project. If you are a carpenter, you may collaborate with a painter or bricklayer in the construction of a house. Ensure that your contract always states that you have the right to do this. Otherwise, a client may raise an issue with you.
Do Independent Contractors Get Overtime in Texas?
According to the Fair Labor Standards Act, independent contractors are not employees, and therefore do not receive the same protections. This is one of the main reasons why employers will try to misclassify their workers as contractors. If you are an employee who has not been paid overtime or given the benefits you deserve, we strongly encourage you to speak with an attorney. A labor and employment law specialist will examine the facts of your case and help you determine where to go from here.
However, there are some situations in which independent contractors are also entitled to overtime pay. The Department of Labor actually relies on the “Economic Realities” test to determine whether or not someone is protected under federal overtime laws. This test asks whether or not the contractor is, in reality, economically dependent on the employer. If so, they are entitled to overtime pay. If not, they are not.
How Many Hours Can a 1099 Employee Work in Texas?
Freelancers and contract workers have no set hour laws, which means they can work as few or as many as they please. They set their own hours; if they exceed 40 hours, they generally will not receive overtime pay. If a contractor does exceed 40 hours in a single workweek, this is only the contractor’s concern, not the client’s.
Why Would an Employer Misclassify an Employee as an Independent Contractor?
In an effort to cheat the system and get around FLSA and EEOC laws, many employers try to classify their permanent employees as contractors. Most employers who engage in this shady tactic do so just to save money. Their goal is to avoid fulfilling obligations to employees, such as the following.
- Minimum wage
- Overtime pay
- Freedom from discrimination
- Adhering to hour laws
- Allowing union organizing
- Offering benefits and pensions
What’s more, is that many employers hire immigrant workers as contractors in order to pay them as little as possible. This is an extremely exploitative practice, and those workers deserve fair pay for their hard work.
What Industries Commonly Misclassify Employees as Independent Contractors?
Workers in many of the following businesses are routinely misclassified as independent contractors and illegally denied overtime pay:
- Oil and gas industry
- Courier and package delivery
- Cable TV and satellite installation
- Repair technician
- Home health care
- Staffing companies
- Hotel/Motel staff
- Janitorial/Custodian staff
- Car Service/Limousine drivers
- Home improvement installation
If you have worked as an “independent contractor” or a “1099 employee,” and have worked more than 40 hours in a workweek without receiving additional overtime compensation, then you need to speak with a qualified overtime attorney with Leichter Law Firm. Our board-certified employment law specialist can tell you whether you are entitled to compensation for unpaid overtime, additional money for liquidated damages, attorney’s fees, and other costs.
Texas Independent Contractors Overtime Lawyers
The labor and employment attorneys at Leichter Law Firm are here to help you get the compensation you deserve for wrongfully being classified as an independent contractor. Our experience and knowledge of labor and employment law, particularly in independent contractor classifications, are unmatched.
You need the skill and experience of the attorneys at Leichter Law Firm on your side to ensure that your employer pays you properly for your hard work. Do not hesitate to call us at (512) 495-9995 to discuss how we can get the compensation you deserve. The time you have to make such a claim can range from two to three years, but we recommend you call as soon as possible.