Can my employer classify me as an independent contractor to avoid paying benefits?

What the Law Says

The Fair Labor Standards Act (FLSA) protects workers’ rights to minimum wage and overtime pay—but only if they are classified as 'employees.' Employers cannot simply label someone an independent contractor to avoid these duties. Courts and the Department of Labor use the 'economic reality' test—not job titles—to determine whether a worker is truly in business for themselves or economically dependent on the employer.

Under the FLSA, covered employees must receive at least $7.25 per hour and overtime pay of at least one and one-half times their regular rate for hours worked over 40 in a workweek.

The statute itself does not define 'employee' or 'independent contractor'—instead, courts interpret these terms using a multi-factor economic reality test that asks whether the worker is economically dependent on the employer (making them an employee) or truly in business for themselves (a contractor).

Misclassification deprives workers of critical protections—including minimum wage, overtime, unemployment insurance, and workers’ compensation—and may expose employers to back wages, penalties, and liquidated damages.

Statutory Text

Every employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages at a rate not less than $7.25 an hour.

— 29 U.S.C. § 206 — Minimum wage

What to Do

Sources