Glorious blatant misclassification

Employees misclassified as independent contractors present great opportunities for major recoveries of unpaid wages and overtime.  

Undercapitalized or greedy contractors bid jobs low on the basis of low cost labor.  They will bid low because they know they can pay their laborers straight time for their hours, no matter how many, and most of those laborers will be glad to be getting paid.

Some contractors tell their employees that they will be classified as contractors and will not get unemployment insurance or workers comp. or have taxes taken from their pay, or get overtime.  The employees think this is fine.  All they hear is "no taxes." 

Prevailing wage states require contractors working on state funded jobs to pay their employees an inflated wage similar to what the local union members would get for the same work.  It's an incentive to hire union members.  The catch is that independent contractors don't have to receive prevailing wage.  They get paid for the job.  So, unscrupulous subcontractors purposely mis-classify their employees as subcontractors and then deny them the prevailing wages they are due on the grounds that they are not employees and are merely getting paid for the job. 

Even when they think they are right, they are wrong.  Some of these contractors will even issue paychecks from their in-house payroll system, to their "independent contractor" employees, showing pay for say 56 hours at regular pay for a week.  This is printed above the "overtime" line which shows 0 hours and $0.  That's 16 hours of overtime paid at the regular rate.  This violation sets up damages equal to 16 hours at the regular rate.  And that is just for one week.  Think three years of this nonsense, for multiple employees, and add in attorney's fees.  That's right, it gets big fast.

These willful violations of the Federal Fair Labor Standards act lead to three years of trailing liability and liquidated damages, not to mention attorney's fees.  Thanks to Zavala v. Wal Mart Stores, an unpaid overtime case out the federal District Court of New Jersey, liability for unpaid wages can extend to the general contractor or the owner of the job.

This kind of case makes me tingle all over.