• LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

Adding staff? Decide before you hire whether you want an employee or an independent contractor. Under the Fair Labor Standards Act (FLSA) and some states’ laws, you must pay overtime to nonexempt employees. Not so for independent contractors.

Make the employee-or-contractor call well before you bring someone on board. Don’t assume you can make the designation later.

Recent case: Rexhep Bulaj did repair and maintenance work for Wilmette Real Estate and Management in exchange for a weekly salary and a rent-free apartment. He received a regular paycheck with tax deductions, got a W-2 at the end of the year and had to be on duty during specific hours and at specific properties. Over time, his duties expanded to include showing vacant apartments to prospective tenants.

When he was fired, he sued, alleging he had regularly worked more than 60 hours per week, but had only been paid a set salary that was not based on how long he worked.

The company argued that Bulaj had really been an independent contractor. It said that how he did his work was entirely up to him and that he provided his own tools.

The court said that wasn’t enough to make him an independent contractor, given all the other evidence that the company had treated Bulaj as an employee for more than a decade. (Bulaj v. Wilmette Real Estate and Management, No. 09-CV-6263, ND IL, 2010)

Final note: Drafting independent contractor agreements isn’t a DIY job. Get your attorney to do it.

Like what you've read? ...Republish it and share great business tips!

Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...

We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.

The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.

" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/12982/make-choice-up-front-employee-or-contractor "

Leave a Comment