A Valid Independent Contractor Agreement Does not Necessarily Exempt Employers From Wage Claims
Reading Time: 4 minutes
In the face of wage claims under section 448.110, Florida Statutes, the existence of an independent contractor agreement not always dispositive in classifying an individual as an independent contractor or an employee for the purpose of a wage dispute. Courts consider a number of factors when deciding whether an individual qualifies as either an employee or independent contractor under section 448.110, and the existence of an independent contractor agreement is not dispositive, nor given much weight, in this decision.
Individuals qualifying for federal minimum wage under the federal Fair Labor Standards Act (“FLSA”) are entitled to receive state minimum wage in Florida. §448.110, Fla. Stat. (2012). An individual must qualify as an employee, not an independent contractor, to qualify for federal minimum wage under FLSA. 29 U.S.C. § 206 (Supp. V 2006). Courts do not rely on labels placed on individuals by virtue of independent contractor agreements as a determinative factor when classifying these individuals. Rutherford Food Corp. v. McComb, 331 U.S. 722, 729 (1947) (“Where the work done, in its essence, follows the usual path of an employee, putting on an ‘independent contractor’ label does not take the worker from the protection of the Act.”); (Wirtz v. Welfare Fin. Corp., 263 F. Supp. 229, 236 (N.D.W. Va. 1967) (“[A] written contract denominating a watchman an independent contractor rather than an employee did not make him such for purposes of the Act . . . his actual status must be determined on the basis of economic reality rather than technical concepts.”). Rather, courts rely upon several factors when determining whether an employer-employee relationship exists. Such factors include:
(1) the nature and degree of the alleged employer’s control as to the manner in which the work is to be performed;
(2) the alleged employee’s opportunity for profit or loss depending upon his managerial skill;
(3) the alleged employee’s investment in equipment or materials required for his task, or his employment of workers;
(4) whether the service rendered requires a special skill;
(5) the degree of permanency and duration of the working relationship;
(6) the extent to which the service rendered is an integral part of the alleged employer’s business.
Freund v. Hi-Tech Satellite, Inc., 185 Fed. Appx. 782, 783 (11th Cir. 2006) (quoting Sec’y of Labor v. Lauritzen, 835 F.2d 1529, 1535 (7th Cir. 1987)). None of these factors are dispositive; however, significant consideration should be given to whether the individual enjoys economic dependence. Usery v. Pilgrim Equip. Co., Inc., 527 F.2d 1308, 1311 (5th Cir. 1976).
For example, when faced with having to classify truckers, courts have held that truckers were independent contractors, therefore not provided minimum-wage protection by FLSA, when they owned their own trucks, the maintenance of which was the responsibility of the individual trucker, were paid by the tonnage-mile and not on an hourly basis, could “accept outside hauling jobs, [could] come and go at will, and [were free] to quit at any time.” Wirtz v. Manchester Sand, Gravel & Cement Co., 236 F. Supp. 885 (D.N.H. 1964), see also Brennan v. Sand Prods., Inc., 371 F. Supp. 236, 238 (W.D. Okla. 1973) (truckers were independent contractors when not integral part of business, had no interest in business but only in their trucks, and success of the truckers depended upon their own initiative); Goldberg v. Bellotto, 207 F. Supp. 499, 500 (S.D. Fla. 1962).
In sum, to prove that an individual is an independent contractor rather than an employee an employer must stress economic dependency and cannot rely solely on an independent contractor agreement. Using the example given, when providing evidence that a trucker is an independent contractor a party should stress the individual’s economic dependency, and further supplement by providing evidence that the trucker was paid by the mile, was free to come and go at will, was free to quit at any time, and had no interest in the business.