Many companies in West Virginia and across the nation utilize independent contractors in addition to their regular workforce of employees. However, businesses often stumble when employing contractors, since the practice can often result in misclassification of workers. A major manufacturer of baked goods headquartered in another state recently settled a lawsuit that alleged the company had misclassified its distributors as contractors.
Flowers Foods settled the Fair Labor Standards Act misclassification lawsuit for $9 million. The lawsuit stated that the distributors had been classified as independent contractors, and all their dealings with Flowers and its customers were controlled by the company. Since the relationship reflected actual employment by Flowers, the distributors argued that they should have received overtime pay for the extra hours they worked over their regular shifts. In addition to the monetary settlement, the distributors’ terms of employment now includes an arbitration agreement.
The U.S. Department of Labor as well as the federal court system have established tests to determine employee classification. State and local laws apply to companies as well in their respective locations. Therefore, it is critical that businesses follow all appropriate guidelines when determining if someone should receive independent contractor status.
Employers may apply specific criteria when deciding a worker’s status. For example, an independent contractor would not be controlled and directed by a company for which the work is being provided. Also, the work provided by a contractor is typically not in the hiring company’s main course of business.
When companies are guilty of misclassification, their workers will likely not get the amount of pay or benefits they should receive. A West Virginia attorney familiar with wage and hour laws can help those who may have been misclassified. A knowledgeable lawyer can help clients receive the pay to which they are entitled.