Can independent contractors receive overtime pay?

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Can independent contractors receive overtime pay?

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A. Independent contractors are not eligible for overtime pay. However, some employers may classify workers as “independent contractors” to avoid paying overtime. To determine whether a worker is a true independent contractor, courts typically use the “economic realities” test. This test analyzes the amount of control exercised by the employer; the skill and initiative needed to carry out the job tasks; the extent of the relative investments of the employee and employer; the degree to which the employee’s opportunity for profit and loss is determined by the employer; the extent to which the employee’s services are vital to the business; and the permanence of the worker/employer relationship. The courts typically conclude that if two of these factors cut against the existence of an employer-employee relationship the worker will be considered an independent contractor and thus not eligible for overtime pay.

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