As many employers discover too late, violating the Fair Labor Standards Act offers little reward and a lot of risk. Shifts in the workforce and changes in technology have brought a rencent increase in activity related to the FFLSA with a focus on the classification of employees being independent contractors as well as exempt versus nonexempt employees. One of the biggest risks for a business for failing to be proactive in its evaluating and ensuring compliance with FLSA is the exposure to attorney fees. In the event an employee brings an action under the FLSA and recovers any overtime, the employer is responsible for reasonable attorney fees and costs incurred by the plaintiff’s counsel.
A company or business in classifying an individual or entity that may provide services for them has created either an independent contractor or employee-employer relationship. In determining the nature of the relationship, the company must balance a number of factors including what control the company or business has over that individual or entity. More specifically, does the company direct how that individual or entity is to perform the services to be provided?
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