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Do independent contractors ever qualify for overtime pay?

On Behalf of | May 19, 2020 | Blog, Uncategorized |

As someone who works as an independent contractor or subcontractor, your income largely depends on the projects you accept. Your rights and obligations are different from those who have a formal, ongoing relationship with an employer as employees.

Contractors have to pay their own taxes and provide their own tools and materials. Working as a contractor can mean that you don’t have any kind of employer-sponsored benefits and that your income may be irregular. As such, contractors typically charge more per hour than employees who have similar skills and educational backgrounds.

Although most contractors will charge a flat hourly rate for their services, there are situations in which a contractor may potentially have the right to request overtime rates for the work that they perform or bring a claim against a client who doesn’t pay overtime as required by law or the contract you signed.

Your clients may outline circumstances in which they offer overtime pay

As a contractor, you will typically have to negotiate the terms of your contract with each individual company that hires you. Some companies are willing to incentivize extra work by independent contractors or subcontractors by offering them overtime wages in certain circumstances.

Some companies will base their policy on federal overtime statutes, paying contractors time and a half for every hour over 40 during each workweek that they work. Other companies may offer overtime wages for workers who spend more than 12 hours on a single shift or workers who commit to working on federal holidays and even extra hours put in over the weekend.

You may be able to negotiate terms that allow you to collect overtime wages. It is also possible that the company will do its best to avoid having you work more than 40 hours so they are not obliged to pay you that higher rate.

Federal law mandates overtime wage for contractors in certain cases

While the primary focus of overtime statutes enforced by the Department of Labor is to protect hourly workers from abuses by their employer, there are also protections that apply to contractors.

The Contract Work Hours and Safety Standards Act is a federal statute that mandates the payment of overtime wages to contractors and subcontractors working on federal contracts. If a company that hires you needs you to perform work on a federal contract, you will have the same right to overtime compensation as an hourly worker would in that scenario.