Fair Labor Standards Act
Passed in 1938 and amended several times since, the Fair Labor Standards Act (FLSA) essentially ensures that all workers covered under the act are entitled to the minimum wage of $5.15 per hour, and overtime at a rate no less than one and one-half times their regular rate of pay. Overtime is applicable after 40 hours of work in a workweek. While this seems fairly straightforward, some important points and exceptions need to be noted:
Contractual criteria: First, it is important to realize that the FLSA applies only to those employees that have an established relationship between employee and employer. Simply, this means that a contractor relationship between a business and an individual voids the application of the FLSA between this type of worker and the employer. However, regarding the application of the FLSA be aware that the courts have taken a fairly liberal view as to the establishment of an employer-employee relationship. There are no criteria in this determination. The courts have tended to look at tests of "economic reality" rather than "technical concepts." Hence, be very careful when hiring contract labor to ensure that the relationship meets the proper tests. The IRS has excellent documentation to this regard.
Source:
http://www.digitaloutput.net/back%20edit/edittopic4a2.html
Thanks for providing the FLSA information. I found its discussion of the difference btw an "employee" and a "contractor" to be helpful.
Seems there are a hundred different situations in which one needs to make that determination--was someone a contractor, or an employee? I think that's why we need to focus on what the particular situation was in THIS case, and your post is helping us to do that.