NEW Federal Law Affecting Independent Contractors

  1. Overtime
  2. NEW Federal Law Affecting Independent Contractors
independent contractors

There is a new federal that is affecting independent contractors. Make sure to understand the law better if you are or if you hire independent contractors. Click here to find the final rule from the Department of Labor. Employment attorney Alan Crone recorded a video breaking down the rule change. We have also transcribed the video for you below!

Hello, everybody. Alan Crone here, the Chairman and CEO of The Crone Law Firm. And I wanted to talk to you just briefly today about a new ruling. The Department of Labor issued some new rules on defining independent contractors. The Department of Labor vacillates every time there’s a change of administration.

The Republicans try to change the rules to benefit employers, and the Democrats try to change the rule to benefit workers. And now we’re on the left side of that. The Biden administration has issued new rules that would make it easier for courts to find that workers who work as independent contractors are, in fact, employees and not independent contractors.

This has applicability and importance on a couple of levels. One, whether or not someone’s an independent contractor or an employee drives, whether or not they’re entitled to employment compensation, whether they’re subject to withholding for taxes and therefore have to pay self employment tax themselves.

It also affects whether or not they’re entitled to an overtime premium. Overtime premium is a premium for anyone who’s not exempt from the overtime requirements who work more than 40 hours in a given work week. It’s under federal law. There’s some state laws that are different, so check on your local laws to determine whether or not there are additional requirements. But under federal law, if you are an independent contractor, then you’re not entitled to overtime.

It is my personal legal opinion that most, if not all of the people walking around believing that they’re independent contractors are in fact, employees and should be entitled to overtime. The people who go to the same employer every day, who don’t have the ability to make a loss or turn a profit in their business and who are directed by their boss to do things a certain way, are almost certainly employees and not independent contractors.

I would encourage everybody to examine their relationships in light of these new regulations. If you’re an employer, you should look very carefully to determine whether or not any independent contractors you employ could be seen to be employees down the road. Same thing with employees.

If you’re working for someone who pays you as an independent contractor, you’re working long hours and you feel like you’re underpaid, this is an opportunity to look and d, if perhaps you’re misclassified, this is brand new, and so it’s going to apply from essentially the first of the year forward. So you’ve got some time to take a look at this before a claim builds up. Thank you very much.

Previous Post
How Do Non-Compete Agreements Work?
Next Post
Alan Crone Makes an Appearance On The Deep Wealth Podcast