1) Private and public sector employees/the
FLSA uses the “
economic realities” test to determine whether a worker is an independent
contractor (not protected) or an employee
2) Economic realities test factors
a) Degree of the alleged employer’s right to control the manner in which the work is performed
b) Alleged employee’s opportunity for profit or loss depending on his/her managerial skill
c) Alleged employer’s investment in equipment or materials required for his/her task of his employment of helpers
d) Whether service rendered requires a special skill
e) Degree of permanence of the working relationship
f) Whether service rendered is an integral part of the alleged employer’s business
3) An employee in private industry may be covered by the
FLSA in one of two broadly interpreted ways:
a) If employee is engaged in interstate commerce, the production of goods for interstate commerce, or works in activities closely related and directly essential to the production of goods for commerce, he/she is covered/i.e., employees who manufacture or handle goods moving in interstate commerce, clerical workers who use the mails or telephones for interstate communication or keep records of interstate transactions, employees who regularly cross state lines in the course of their work, and communication and transportation workers, including those involved with maintenance, repair and improvement.
b) If the business enterprise/employer is engaged in interstate commerce, production of goods for interstate commerce, or working in goods or materials moved in interstate commerce and the business enterprise has an annual business volume of at least $500,000, all employees are covered. If an employer has two or more employees who are individually engaged in interstate commerce, then all the remaining employees are also covered.
American Bar Association // Section of Labor and Employment Law
Equal Employment Opportunity Committee // EEO Law Basics // Spring 2006
