Do Subcontractors Get Paid Overtime?

David ManesUncategorized

The quick answer is that subcontractors as being contracted to head contractors on a project do not receive overtime payment for their work, unless stipulated in the contract. At the root, subcontractors are contractors who work for other contractors. This means that subcontractors receive the same treatment as contractors.

Terminology: Understanding What a Contractor Is

For clarity, it’s important to understand the definition of a contractor and what that means for day-to-day working. A contractor or an independent contractor is a self-employed individual who manages their own work, offering a particular service or good. Moreover, a contractor meets certain qualifications to be classified as a self-employed worker. When a contractor signs a contract with a company for a certain project, this does not qualify the contractor as an employee of the company.

On extensive projects, it’s not unusual for the principal contractor on the job to hire subcontractors to perform portions of the work. A subcontractor is an individual who is under contract to the principal contractor or another subcontractor to perform specific parts of the work on a project. Subcontractors may choose to contract subcontractors as well.

Is Your Position with a Company as a Contractor or Employee?

The IRS outlines a few common law rules to determine what position a worker holds within a company. These standards are split into three different categories: behavioral, financial, and relationship type. The key is to analyze the entire relationship before making a determination.

Behavioral

  • Who controls the worker’s assignments?
  • Is how the work performed dictated by an employer?
  • Does someone control what the worker does?

Financial

  • How is the worker paid?
  • Are the business aspects controlled by the one paying?
  • Are expenses reimbursed?
  • Who provides tools, equipment, and supplies?

Relationship Type

  • Is there a written contract involved?
  • Does the worker receive employee benefits such as insurance, vacation pay, or a retirement plan?
  • Will the relationship continue?
  • Is the work a fundamental part of the company?

A worker who is misclassified as an independent contractor rather than an employee suffers a loss of wages, benefits, and employee protections. Independent contractors are responsible to take care of their own benefits and protections.

Workers Who Don’t Receive Overtime

Many different workers don’t receive overtime for various reasons. Workers who receive a salary are exempt from receiving overtime pay. Here’s a quick list of some of the workers who don’t receive overtime wages.

  • independent contractors and subcontractors
  • volunteers
  • seasonal recreational business employees
  • newspaper deliverers
  • babysitters

Although independent contractors don’t experience the benefits of being an employee, contractors have the flexibility to pursue their own entrepreneurial dreams and plans. A contractor creates a brand, chooses the schedule, supplies the equipment, and benefits from all successes.

A contractor might not receive overtime pay, but a contractor can benefit in many other ways.

If you believe that you’ve been misclassified as a subcontractor rather than an employee, contact an employment lawyer who will know how to navigate your case and your rights under the law.

Don’t hesitate, talk to an attorney: (412) 626-5626 or lawyer@lawkm.com.