Properties Magazine February 2017 : Page 59

Legal Services Five Common Misperceptions About Overtime Laws A look at typical mistakes that lead to costly Fair Labor Standards Act liability By Ann-Marie Ahern McCarthy, Lebit, Crystal & Liffman Co. LPA N avigating the labyrinth of employment laws is challenging, especially for smaller employers. And, if employment law compliance is hard, the granddaddy of all tricky statutes is the Fair Labor Standards Act (“FLSA”) – the law that governs, among other things, payment of overtime. contractors, misuse of this classifica-tion is widespread and risky. In 2015, the National Employment Law Project reported that as many as 459,000 people in Ohio are misclassified as indepen-dent contractors and nearly 45% of all employers misclassify. Calling someone an independent contractor does not make them one, and can result in unpaid overtime liability. Courts apply a looser test in determining appro-priateness of classification than that applied by the IRS, examining the “economic realities” of the relationship, including: the permanency of the rela-tionship; the degree of skill required; the worker’s investment in equipment; the worker’s opportunity for profit; the degree of control over the manner in which the work is performed; and whether the work is an integral part of the employer’s business. The longer, more exclusive and/or controlling the But wait, you may have heard that employers are getting a reprieve from new regulations that would have expanded overtime greatly. You may feel heartened by promises of a 75% decrease in the regu-lations that apply to employers. You may be seeking solace in speculation that the Department of Labor will not as vigorously pursue claims in the coming years. Even if this is true, none of it means that employ-ers should let their guard down when it comes to overtime law compliance. While change may be on the horizon to the regulations that apply to the FLSA, the law itself, with its arcane language and ticky-tacky application, will remain. The availability of attorneys’ fees and the avail-ability of civil penalties will assure that FLSA lawsuit filings will persist. Employers often falsely believe that their good intentions to treat employees fairly will suffice. As a result, we see recurring, common mistakes that lead to Ann-Marie Ahern costly FLSA liability. Here are five of the most common: 1. “We’ll just make them independent contractors.” While there are certainly advantages to classifying workers as independent Sometimes, the best defense is a great offense. &#0d;uol_;Ѵrbm];Š;1†ঞˆ;v m;]oঞ-|;;lrѴo‹l;m| -]u;;l;m|v|o-7ˆbvbm] ;lrѴo‹;uvom1olrѴb-m1; bvv†;vķo†u;lrѴo‹l;m|]uo†r v|-‹v-_;-7o=|_;1†uˆ;ĺ Trusted Advisors. Respected Advocates. www.mccarthylebit.com SM www.propertiesmag.com 59

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