One area of employment law that often gets overlooked is wage and hour litigation. This often involves the misclassification of employees as independent contractors or companies overtly expecting their employees to work overtime without compensating them correctly. Federal standards are set by US Department of Labor under the Fair Labor Standards Act.
Since 2000 there has been 358% increase in the number of wage and hour litigation lawsuits. The question then becomes: Why? Much of this may have been inspired by the Obama administration’s crackdown on employee misclassification by employers.
Misclassification lawsuits generally involve the classification of those who would be more accurately described as employees as independent contractors or specialist exempted employees. Employees are entitled to a number of benefits and protections, including wage and hour restrictions and compensation for overtime. Independent contractors are not. On the same token, independent contractors enjoy a lot more power over their employment decisions than do wage employees.
For instance, independent contractors have control over the means, the manner, and the time at which their work occurs. Wage employees generally have these elements of their work dictated to them by their employer.
Decline of Unions Results in More Wage and Hour Lawsuits
Another reason why wage and hour lawsuits saw a sharp increase over the past couple of decades is the fact that unions are playing a much smaller role in the lives of American workers. Typically, issues that would have been addressed by collective bargaining and pre-established contracts are now played out in the courtroom. More and more American workers are using the courts to settle issues with employers than ever before and that trend may continue into the foreseeable future.
While unions still dominate some areas of industry, a greater number of workers have entered what many are calling “the gig economy.” This has led to even more confusion about who is or is not an employee versus an independent contractor. This also has contributed to the number of misclassification lawsuits as employers attempt to exploit the blurred edges around who constitutes what kind of worker.
How Employers Exploit Misclassification to Underpay Employees
There are a number of good reasons why employers would attempt to misclassify an employee as an independent contractor or a manager. Employees are entitled to a host of protections and entitlements that independent contractors are not. In addition, executive or “professional” positions may be exempted from requirements to pay overtime.
In some instances, employees classified as managers are performing the same menial tasks as those whom they are supposedly managing. In other instances, employees are being classified as independent contractors even when they are expected to work from 9 to 5.
Both Missouri and Federal law explicitly prohibits employers from classifying those who do work for them on the basis of how much money they will save by doing so.
If you believe that you have been the victim of misclassification in Kansas City or the surrounding area, feel free to contact HKM Employment Attorneys at 816.607.4691 and we will begin discussing the details of your case immediately.