Caution: Misclassified 'Independent Contractors'

Law360, New York (August 5, 2011, 12:20 PM EDT) -- The Fair Labor Standards Act requires covered employers to pay nonexempt employees overtime compensation for all hours worked in excess of 40 hours per week. No overtime pay obligation exists for independent contractors. Consequently, many employers view the use of independent contractors as an alternative to hiring employees — particularly for individuals whose hours may vary or the length of the need for their services may be relatively short.

Many employers misunderstand the requirements associated with treating workers as independent contractors, however. Misclassifying workers who really...
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