Ask the Attorney – Wage and Hour Edition, Vol. 6

I work at a local gym, signing up new customers, taking payments, supervising other employees and whatever other tasks the owners tell me to do. Each day, the owners email me a to-do list that needs to be completed for the day. The owners set my schedule and tell me when to perform certain tasks, such as making the deposits for the day. I get paid a salary, but no taxes are ever taken out of my check and this past year I received a 1099 from the company rather than a regular W-2 which I have always gotten from prior jobs. Are they doing something wrong? – Dale F.

Dear Dale,
It sounds like your employer has classified you as an independent contractor rather than an employee. In essence, independent contractors work for themselves and contract with companies to perform various services. However, companies often misclassify employees as independent contractors in order to avoid providing certain benefits to employees. Misclassifying employees as independent contractors presents a series of problems as the employer is not paying its share of taxes, and the employees are denied benefits such as workers’ compensation benefits, unemployment benefits, and FMLA leave. There are several factors that go into whether someone should be classified as an independent contractor or employee, including the company’s control over the worker’s hours and duties; the worker’s opportunity for profit or loss; the worker’s skills; and other factors. It sounds like your employer exercises a great deal of control over your job, which strongly suggests that you are misclassified as an independent contractor. Give me a call so that we can discuss the other factors and talk about what options you may have.

I am a salaried employee and work in the corporate office of a local assembly plant, managing the office staff. Every year the plant shuts down for three days during the first week of March, June, September and the last week of December. When the plant shuts down they cut my salary by three-fifths. Can they really do that? – Sandy C.

Dear Sandy,
It sounds like your employer has instituted what is referred to as furlough days, where a company completely shuts down to save on costs, including operational costs and wages. However, employers cannot deduct wages of salaried, also called exempt, employees so long as the employee is ready, willing and able to work. Otherwise, they will lose the ability to pay the employee on a salary basis, which means they have to pay overtime at a rate of 1½ times the employee’s regular rate. Call me to discuss how we can help.