Are Independent Contractors Entitled to Overtime?
If an individual truly is an independent contractor, they are not entitled to overtime compensation for hours worked over forty (40) in a workweek. To determine whether an individual is an independent contractor, courts typically apply what is called the “economic realities” test; this test analyzes the following factors: (a) the degree of control exercised by the alleged employer; (b) the extent of the relative investments of worker and alleged employer; (c) the degree to which the workers’ opportunity for profit and loss is determined by the employer; (d) the skill and initiative required in performing the job; (e) permanency of the relationship; and (f) the extent to which the worker’s services are integral to the entity. While no one factor is dispositive of the issue of whether an individual is an independent contractor or employee, courts typically conclude that if two (2) or more of the above factors cut against the existence of an employer-employee relationship, the individual
