Far too often, employers find themselves in the position of unknowingly violating the law as it relates to compensating their employees. Similarly, it is critical for employees to understand what their rights under federal and state law and how much they should be earning. Unfortunately, the complicated and often dynamic nature of federal and state law can render understanding labor law exceedingly challenging for both employers and employees. One such complex issue is determining whether a worker should be compensated as an on-call employee.
On-call time is where an employee is not technically working but is still compensated because he or she is considered to be “on-call.” Determining whether an one should be classified as an on-call employee can be challenging insofar as it is a query that is dependent on a number of very specific variables. Indeed, making this issue even more difficult is the fact that there is no bright line rule for determining whether an on-call employee must be paid for on-call time.
Both federal (FLSA) and state (NYCRR) law call for employees to be compensated while they are on-call at their place of employment or at a place required by the employer. What happens however, when an employee is not required to be in a certain place while on-call. The answer in part, is dependent on for whom the employees use of time benefits. In other words, who benefits more from the time the employee spends on-call, the employee or the employer. This is not a straight forward inquiry, however. Moreover, this is not the only inquiry that is necessary to determine whether an employee should be compensated for time spent on-call. This determination turns on several other significant variables.
If you have questions regarding on-call time, or other labor and/or employment law related questions, call Gilbert Law Group today at (631)630-0100, and speak to one of our qualified and knowledgeable attorneys.
The United States Court of Appeals for the 2d Circuit recently issued a decision that could potentially save certain business owners both money and stress. The 2d Circuit, which encompasses the states of New York, Connecticut, and Vermont, in a recently decided case (Saleem v. Corporate Transportation Group, Ltd.) provided guidelines for employers as to whether their workers are employees or independent contracts. The issue of classification of workers as an employee or independent contractor is significant. For example, an independent contractor is exempt from minimum wage and overtime requirements. Further, such a classification can have significant tax consequences for a business. The above-referenced case clarifies longstanding issues regarding classification workers as employees or independent contractors. The hope is that the by issuing said guidelines, the Court will help employers avoid troublesome allegations of misclassification.
The case involved a driver service and its workers. Corporate Transportation Group and its affiliate companies (CTG) run a black-car service in the New York City area. The Company requires its drivers to sign a contract that acknowledged they were “not an employee or agent” of the company “but merely a subscriber to the services offered” by CTG. The drivers filed a class action lawsuit against CTG seeking unpaid overtime pay pursuant to the federal Fair Labor Standards Act (FLSA) and New York state wage and hour law.
In its decision, the Court established a three pronged analysis for determining whether a worker is an independent contractor or an employee. The Court initially noted that any independent contractor misclassification dispute arising under the FLSA must be examined under an “economic realities” test. The Court then listed the following three factors to be crucial to its decision:
- The Drivers Had Entrepreneurial Opportunities Not Available to Employees;
- The Drivers Made A Heavy Investment In Their Business and;
- The Drivers Maintained A High Level Of Flexibility.
The Court cautioned however, that its ruling was based on the fact-specific “totality of the circumstances” comprising the relationship between CTG and the drivers in this specific case. “In a different case, and with a different record, an entity that exercised similar control over clients, fees, and rules enforcement in ways analogous to CTG might well constitute an employer within the meaning of the FLSA.”
As a result it is clear that each case is to be determined on a case by case basis. Further, there is a lot of gray area as to how each of the above-referenced guidelines may be applied to difference business. Each case can turn on several variables. It is always best to consult an experienced employment attorney. If you have questions regarding employee or independent contractor classificication status, or are facing potential misclassification issues, call Gilbert Law Group today at 631.630.0100.