Overtime Pay & Independent Contractors

Independent Does Not Always Mean No Overtime Rights

It’s easy to assume that the word “independent contractor” means overtime laws don’t apply. Employers often reinforce this idea, making workers believe that once they sign a contract, they’ve given up wage protections. But the truth is more complicated. Titles don’t decide rights. The law looks at the reality of the work, not the label an employer chooses.

In many cases, so-called “independent contractors” are actually employees under the law. That means they should receive overtime pay and other benefits. Employers know this, yet misclassification is rampant because it saves them money. At Horn Wright, LLP, our employment law attorneys challenge these classifications and fight for every dollar misclassified workers deserve.

Misclassification of Independent Contractors in New York

New York has some of the toughest rules against worker misclassification. Under New York Labor Law (NYLL) § 861-c, the presumption in the construction industry is that workers are employees unless proven otherwise. This protects people in fields notorious for calling employees “contractors” to avoid paying overtime, workers’ comp, and unemployment insurance.

The Fair Labor Standards Act (FLSA, 29 U.S.C. § 207(a)) also applies when the reality of the job fits the definition of “employee.” Even if a contract or tax form says otherwise, courts focus on whether the employer had control over the work, set the schedule, or provided the tools.

This is where misclassification and overtime pay violations intersect. Workers labeled as contractors but treated like staff are entitled to overtime protections under both federal and state law. Employers who get caught face serious employer liability for overtime violations, including back pay and liquidated damages.

Evidence That Shows a Worker Is Really an Employee

Proving misclassification requires evidence that the job looked more like employment than independent contracting. Courts and agencies use what’s called the “economic realities” test under the FLSA, and New York applies similar factors. Evidence often includes:

• Control over work. If the company sets your schedule, directs your tasks, or supervises your performance, you look like an employee.
• Tools and resources. If the business provides the equipment, uniforms, or workspace, it suggests employment rather than independence.
• Economic dependence. If your income comes primarily from one company, you are likely an employee under the law.

This evidence also plays into identifying overtime violations. For example, if a delivery driver is classified as a contractor but works fixed shifts, wears the company logo, and uses company vehicles, that worker has strong proof of employee status. Courts rely on these details to cut through employer arguments.

Remedies for Misclassified Independent Contractors

Once misclassification is proven, the law provides real remedies. Workers can recover:

• Back overtime pay. Under both the FLSA and NYLL, courts award unpaid wages going back two to six years depending on the statute.
• Liquidated damages. Federal and state law generally award an additional equal amount, doubling the recovery.
• Attorneys’ fees. Workers don’t have to absorb the cost of bringing a claim; employers may be ordered to cover fees.
• Employment protections. Reclassification also gives workers access to benefits like unemployment insurance and workers’ compensation.

These remedies show why employers gamble with misclassification. They may save money in the short term, but the long-term cost, once damages, fees, and penalties are added, is much higher. This is why calculating unpaid overtime damages thoroughly is key. Lawyers use time records, pay stubs, and testimony to show the true cost of misclassification.

New Hampshire Provides Weaker Misclassification Protections Than New York

State protections vary widely. New Hampshire, for example, uses a narrower test to determine whether someone is an employee or contractor. This test gives employers more flexibility to classify workers as independent, even when the relationship looks like employment.

New York’s approach is far stronger. By presuming employment in industries like construction and applying strict duties tests for exemptions, New York workers have a better chance of proving misclassification. They also benefit from a longer six-year window under NYLL § 198(3) for filing claims, compared to shorter timeframes in many other states.

This difference underscores why filing an overtime pay claim in New York can produce stronger outcomes than in states with weaker rules. Employers in New York face stricter scrutiny and harsher penalties if they abuse independent contractor classifications.

Industries Where Independent Contractor Abuse Is Rampant

While misclassification can happen anywhere, certain industries are notorious for it:

• Construction. Workers are often called contractors to avoid overtime, despite being supervised daily and using company-provided tools.
• Transportation and delivery. Drivers labeled as independent contractors frequently work fixed routes and wear company uniforms, signaling employee status.
• Hospitality. Hotels and restaurants sometimes contract out cleaning or catering staff while exercising control over schedules and duties.
• Healthcare. Home health aides and nurses are often treated as contractors even when agencies control every detail of their assignments.

In each of these industries, employer liability for overtime violations is a recurring issue. Employers cut costs through misclassification, but when claims succeed, the damages owed are often industry-wide. Group actions are common, multiplying the stakes.

How Courts Decide Who Qualifies as an Employee

Courts don’t take employers at their word. They look at the entire relationship between the worker and the company. Under the FLSA, the “economic realities” test considers whether the worker is economically dependent on the business. New York courts also consider control, supervision, and integration into the business.

Key questions include: Did the worker set their own schedule? Could they take on multiple clients? Did they control how the work was done? If the answer is no, the worker is probably an employee.

This analysis is central to identifying overtime violations. Courts understand that labels are easy to manipulate. What matters is the substance of the relationship. That’s why testimony, schedules, and company policies carry so much weight in these cases.

Horn Wright, LLP, Protects Misclassified Independent Contractors

Being called an “independent contractor” doesn’t mean giving up your rights. Employers often misuse the term to shift costs and avoid paying overtime, but the law looks deeper. At Horn Wright, LLP, we help workers prove they were employees all along.

Our employment law attorneys gather evidence, challenge employer defenses, and pursue every available remedy, from back pay to liquidated damages. We know which industries abuse misclassification most, and we know how to expose it.

If you’re ready to work with a nationally recognized firm that protects misclassified workers, Horn Wright, LLP, will fight to reclassify your status and recover the overtime you earned.