Just a Lawyer in Lincoln's Hometown

November 1, 2010

Hammerhead – About to get hammered

Filed under: Employment Law — Chuck @ 1:00 am
Tags: ,

Sam Hammer just started Hammerhead construction. He used to work for another small construction company and then became independent contractor with HugeCo, a manufacturing company. A wonderful carpenter, great guy, good buddy, and too cheap to hire a lawyer before he started the business. He decided to do things just like HugeCo.

So when Hammerhead got its first good job, Sam brought on Allen, Alice, and Albert to help. He brought them onto the job as independent contractors, the same as he was when he was working for HugeCo. Allen was the lead carpenter, and Alice and Albert took their instructions from him or Sam. Alice and Albert were new to the carpentry business. Neither of them had their own business. Neither of them advertised their services.

Although Allen, Alice and Albert brought their own hand tools with them to work, Hammerhead Construction provided all the other tools. Hammerhead provided the plans. Sam and Allen told Alice and Albert what needed to be done, in what order the work needed to be done and how it was to be done.

Sam felt that he needed to develop a reputation as a good contractor, so he worked long hours. He worked Allen, Alice and Albert long hours as well. They all worked 70 hours that first week. Sam was paying Alice and Albert $10/hour, and at the end of the first week, he gave them both a check for $700 even.

Alice and Albert both said, “Where’s our overtime?!” Stunned, Sam replies, “But you are independent contractors, you don’t get overtime.”

“Sam,” says Alice, “my brother is a lawyer, and he said we aren’t independent contractors. We are employees, and employees who work overtime get paid time and a half for anything over 40 hours a workweek. You owe us both another $150 bucks!”

Sam calls a lawyer, explains the situation and asks, “Are they right?”

“Yes they are. You give most all of the tools they use, you tell them where to work, when to work, and how to work. You didn’t hire their businesses, they don’t have any. They don’t hold themselves out as being available to do any other jobs. They do the same thing you do, but under your direct supervision.”

“Alice and Albert both look like any other employee. The fact that you said they were independent contractors doesn’t make them contractors. It is what is actually happening that matters here. If it walks like a duck, looks like a duck and quacks like a duck, it is a duck. Alice and Allen are employees, and you’ve got to pay them overtime.”

“Why didn’t you call me before bringing them on board?”

Chuck from Watson Law, LLC

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