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Seventh Circuit ignores DOL standard on contractor classification

For the past two decades, there has been a lot of dispute over the classification of contract workers in the nation's district appeals courts. While many government organizations in Mississippi and other states have overlapping standards, there is no single test that can be used everywhere. Due to the lack of a single classification system, there are often critical differences in how similar workers are compensated and taxed.

The Wage and Hour Division of the U.S. Department of Labor (DOL) decided to adopt the "economic realities" test in 2015 to determine which workers are contractors. While this test is commonly used, many criticized the DOL for minimizing the role that control over the worker plays in classification. Control is often considered the most important factor in classifying between normal employment and contracting. Other factors include special skills used, permanence of employment and how much profit for the worker is based on managerial skill.  We currently have cases in federal court seeking compensation for underpayment of wages.  Call George B. Ready if you think you may have been shortchanged at work.

The Seventh Circuit court rebuked the standard set by the DOL in a recent decision regarding the classification of a maintenance worker for a housing authority in Illinois. The worker claimed that, despite signing an independent contractor agreement, the housing authority exerted control over the way an employer would. While a lower appeals court ruled in favor of the housing authority, the Seventh Circuit found that the worker was incorrectly classified as an independent contractor.

People who think they have been wrongly classified as independent contractors might be able to seek compensation. According to labor law, full-time employees are eligible for overtime, disability and other benefits. Some employers try to avoid paying these benefits by classifying normal employees as independent contractors. An attorney with a focus in wage and hour law may be able to help victims of this type of practice.  Contact George B. Ready if you feel you have been misclassified.

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Law Office of George B. Ready
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Hernando, MS 38632

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