Because of the protections and rights extended to employees under the Fair Labor Standards Act, it is important for laborers to make sure they are properly classified as employees.
Many companies who hire laborers for specific tasks will classify them as independent contractor.
At times this is a true status and in the best interest of the independent contractor.
But there are circumstances in which laborers who should be classified as employees are paid as independent contractors.
This legal status is important to protect the rights offered to employees regarding minimum wage, overtime payment protection, and workers' compensation regulations.
If a laborer is improperly classified by a principal employer, there is potential that they are owed specific benefits or paid wages that have not been given to them.
To receive these benefits and wages that have been fairly earned, it is important to determine if a person is considered an employee as defined by the FLSA and by precedents set in court.
Numerous factors have been considered crucial to determining if a person is, in fact, an employee.
If there is a sense of permanence in a business relationship, this may be enough to classify a person as an employee and not an independent contractor.
Also, the level of control exemplified by the principal in the business agreement may indicate that a person is an employee and not truly independent.
The structure of a business venture and the interactions between parties are crucial to determining an employer-employee relationship and making sure that everyone's rights are protected.