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Han Solo: Independent Contractor or Employee?

Was Han Solo an independent contractor or employee of the Rebel Alliance under the FLSA? You know you’ve always wanted to know the answer to this question! How  else can you expect to impress a beautiful girl unless you can provide a detailed legal and in-universe explanation for one position or another that does not violate sacred Star Wars canon? You can’t, of course, which is why you’re here. They don’t call me the Juris Doctor of Love for no reason. In fact, they don’t call me that for any reason at all. Or at all, period. Nonetheless, it’s on my business cards. 

Seriously though–and I do take this far more serious than is healthy–the answer depends on which movie we look at in the ever-increasing Star Wars film universe. So for this post, we will consider just the first Star Wars: Episode IV: A New Hope: The One Where Han Shot First (In Some Versions): A Star Wars Story: Being the First Part of the Lord of the Rings.

Oh, Han Solo:  smuggler, scoundrel, scruffy-looking nerfherder. Until the start of Star Wars: A New Hope, he’s a down-on-his-luck outlaw with a price on his head larger than a fanboy’s expectations of Episode IX. Until, that is, an agent of the Rebel Alliance, the only one Obi-Wan Kenobi, makes a proposal:  transport humans and cargo past the Imperial patrols and deliver them safely to Alderaan. Han Solo’s first question, logically, is whether he would be an employee or an independent contractor in this scenario, and given his business savvy, he immediately contacted a skilled employment law attorney in South Carolina for the answer. So…

What makes Han Solo an independent contractor or employee?

Control, control, you must learn that CONTROL is the key to determining whether the person is an independent contractor or employee. The Imperial Revenue Service (IRS) has issued guidance in making this classification. Two key factors noted by the IRS are control over the person’s behavior and control over the financial and business aspects of the employee’s job. In other words, is the person permitted to exercise complete discretion in getting the work done and in how the person gets paid? If not, then the person is more likely an employee.

In Mr. Solo’s FLSA lawsuit against the Rebel Alliance in imperial court, what does the court consider that weighs in favor of him being a contractor?

First, Plaintiff Solo has virtually no restrictions placed on his discretion in performing his mission. The only directions he receives from Mr. Kenobi? “No questions asked.” Solo has the discretion to determine time and location for departure (docking bay 94, of course), the means of transport (the Millennium Falcon),  and calculating the proper course to Alderaan, which, as we know, ain’t like dusting crops, boy. So the element of control (or lack thereof) over Solo’s behavior leans in favor of an independent contractor arrangement.

Second, Solo has no restrictions placed on the financial and business aspects of this arrangement. Solo remains free to use his own resources and tools to accomplish the mission, as he sees fit, and he can make all the upgrades and modifications to the Falcon that would be necessary. So this factor also also tends to support Solo’s status of independent contract. Also, his name is SOLO, so….

Can a person’s status change from independent contractor to employee?

Yes, if the level of control changes during the course of employment. So, in Captain Solo’s case, he begins as independent contractor, subject to the terms of payment of 2,000 credits now and 15,000 when they arrive safely at Alderaan.

However, the Force has other ideas, for upon arriving at where Alderaan USED to be, the mission changes. Solo’s ship, with its passengers hidden on board, is captured by the Empire, which leads to a rescue attempt of Princess Leia, a high-ranking member of the Rebel Alliance.

Once the Princess enters the picture, the level of control changes almost immediately. Princess Leia asserts control over the mission and begins bossing around Han Solo and Luke Skywalker (and even Chewbacca, the famous walking carpet himself) like she’s, well, like she’s royalty or something. At this point, Han Solo instantly becomes an employee of the Rebellion, pursuant to Princess Leia’s assertion of control over the mission. At that point, Han Solo becomes entitled to….

Overtime–Or, How Long It Takes to Become As Wildly Handsome as Me (i.e., it happened over time and with frequent surgery)

That’s right, the Rebel Alliance, as if it didn’t have enough trouble on its hands with fighting a war and all, now has to start tracking Han Solo’s hours worked so it can properly pay him overtime for all the hours he’s working to help save the Galaxy from the villainous Empire. (I recommend a time-tracking software such as Fettch Your Hours or Jabba Jabba Jobsite, both excellent options.) The Alliance, being the good guys, does not engage in wage theft and so takes its legal obligations seriously. After a polite request, Han Solo received all of his earned overtime pay for the many hours he spends fighting for peace and justice in the galaxy, and I didn’t even have to send an threatening letter to Mon Mothma that compares her to the Dark Lord of the Sith if she doesn’t comport with the law’s requirements.

Ultimately, if you or a smuggler you know is uncertain as to whether or not they should be getting paid overtime, send me a holo transmission immediately. I may not be your only hope, but I’ll certainly help you any way I can.

THE END

DIRECTED BY J.J. ABRAMS

WRITTEN BY JEREMY R. SUMMERLIN, E$Q

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Overtime Wage Theft in South Carolina

Types of Wage Theft in South Carolina: Unpaid Wages and Unpaid Overtime

Wage theft is the term used when employers and businesses fail to pay South Carolina employees all the wages that the employee earned. (At least, it’s the term used by me and other employee advocates; employers call it an “oopsie!”) Wage theft occurs both in traditional wages (weekly paycheck, commissions, accrued PTO) and in overtime and minimum wage cases under the Fair Labor Standards Act (FLSA). (I’ll refer to the FLSA claims as “overtime wage theft” for inflammatory purposes.)

If an employee should be getting paid overtime for the extra hours he or she is working, and the employer refuses to pay overtime, then the employer is engaging in overtime wage theft, which is illegal in South Carolina. (Also currently illegal in South Carolina? Playing pinball before you’ve reached the age of 18. But I’m a sweet-natured felon, don’t worry. )

Most of the wage theft cases I see in my practice come under either the South Carolina Payment of Wages Act or under the FLSA, which are the two laws covering wages or pay in South Carolina. I’ve blogged about wage theft under the South Carolina law before, so I’d like to focus this article on overtime wage theft under the FLSA.

Overtime Wage Theft Comes from Misclassification by the Employer

Most FLSA overtime wage theft claims come when an employer deliberately or negligently misclassifies an employee as exempt from overtime pay. In other words, the employer tells the employee, “You don’t get overtime pay [time and a half], no matter how many hours you work.” And that’s completely fine, if the employee is getting paid a genuine salary of at least $455 a month AND has the duties that meet the FLSA’s requirements to be exempt form overtime pay.

However, the problem arises when the employee clearly isn’t getting paid a salary OR clearly doesn’t work the managerial or administrative duties that would exempt him from the FLSA’s requirements, and yet the employer doesn’t pay overtime at all. In this case, if the employee is working more than 40 hours a week, the employer is getting the benefit of free or discounted labor by not having to pay the overtime premium. That’s where the overtime wage theft comes in (or “wage oopsies!” for all you defense attorneys).

Sometimes, this is a genuine oversight by the company. Perhaps it’s a small business with an owner that doesn’t understand the law, or it’s a close question as to whether the employee is entitled to overtime or not. Those cases do happen, but the law still requires a business owner to make sure that the employees are being paid properly. Often that means hiring a lawyer to vet wage practices and make sure the company is in compliance.

Because, the bottom line is, if the company has misclassified an employee, even if it wasn’t malicious, the company still has to pay to make it right.

Exempt vs. Non-Exempt & Employees vs. Independent Contractors

However, the more egregious examples of overtime wage theft include companies who deliberately misclassify employees as exempt from overtime just so that the companies can save money.

A common variation of this misclassification practice comes when the employer decides to classify employees as “independent contractors” instead of employees. The reason they do this is because independent contractors aren’t entitled to overtime pay or minimum wage under the FLSA, and the company doesn’t have to provide other benefits either. An employer who takes this step without the facts to support this decision risks a great deal of trouble and money later on.

Let Me Explain–No, There is Too Much. Let Me Sum Up.

The determination of whether an employee has been misclassified is extremely fact specific. If you believe you’ve been a victim of overtime wage theft, you should speak with an employment attorney immediately.

And if you believe you’ve engaged in youthful illegal pinballing, you should speak with a criminal defense attorney, because the State will (and should!) vehemently protect the innocent people of this State from wanton, profligate, and underage arcade gamers.

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U.S. Supreme Court Issues New Ruling on FLSA Exemptions from Overtime

Earlier this week, the U.S. Supreme Court ruled that certain employees of a car dealership in California were exempt from overtime pay under the Fair Labor Standards Act (FLSA). Unless you’re an automobile service adviser for a car dealership, the specific factual outcome of the case is likely not important to you.Image result for pictures of car dealerships

However, more importantly, the Supreme Court decided that “exemptions” from overtime should NOT be looked at narrowly. Exemptions, under the FLSA, are the different categories of employees who don’t get overtime pay. For example, supervisors, office managers, and professionals typically do not get paid overtime, so long as the employer pays them a sufficient salary. They are “exempt” from overtime requirements. (I’ve blogged about these exemptions in more detail at my law firm blog page here.)

So now, the Supreme Court has determined that these exemptions should be viewed more broadly by the courts, which means in effect that the Court thinks the tie should go to the runner (i.e., the employer, NOT the employee); this also means, potentially, that for employees whose cases are on the fence, courts may be inclined to side with the business. I expect to see many more companies using this case as a further defense in misclassification cases in the future. However, the fact remains that the duties test–in other words, do the specific duties that the employee performed fall within the proposed exemption?–will still have to be proved by the employer.

Bottom line: South Carolina employers who deliberately or accidentally misclassify employees as exempt from overtime run the risk of an FLSA lawsuit, which can result in back pay awards, liquidated damages, and attorneys’ fees. If you think you should be getting paid overtime and you’re not, give me a call.

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Are Strippers Employees or Independent Contractors?

The question of whether exotic dancers are employees or independent contractors of the strip clubs where the dancers are employed recently wound up in the lap of the Fourth Circuit Court of Appeals. (South Carolina employees fall under the Fourth Circuit’s juris–, uh, –diction and its interpretation of the FLSA.) Luckily, the court managed to keep its eyes focused up here and refused to dance around the issue or beat around the bush, choosing instead to nip this issue directly in the bud.

Are South Carolina Strippers employees or independent contractors?

For some employers, the answer may be polarizing. In McFeeley v. Jackson Street Entertainment, Dynasty McFeeley—clearly destined to be an exotic dancer—and others, sued two strip clubs in Maryland, alleging that the clubs had failed to pay them minimum wage, that the clubs had done so in bad faith, and that the dancers were entitled to liquidated damages (Double Damages) under the Fair Lass’s Supple Act (FLSA).

After stripping away all other issues in this case, the district (federal trial court) erected a firm set of standards, known as the “economic realities” test, to determine whether the dancers were employees or independent contractors. This test swings on whether the worker is “economically dependent on the business to which [s]he renders service or is, as a matter of economic [reality], in business for [her]self.”

What’s the Test for Employee versus Independent Contractor?

Application of the test turns on sex factors:

(1) the degree of control that the putative employer has over the manner in which the work is performed;

(2) the worker’s opportunities for profit or loss dependent on [her] managerial skill;

(3) the worker’s investment in equipment or material, or his employment of other workers;

(4) the degree of skill required for the work;

(5) the permanence of the working relationship; and

(6) the degree to which the services rendered are an integral part of the putative employer’s business.

The court determined that the strip clubs exercised sufficient control over the dancers by requiring the dancers to sign-in each day, setting the dancers schedules, establishing work policies, mandating how much could be charged by the dancers, maintaining exclusive control over the entire establishment and atmosphere, including lights, sound, and music, and insisting on calling all the dancers Chastity on Sundays to assuage any matters of conscience. Based on these factors and others, the court ultimately determined that these dancers were employees under the FLSA and were therefore entitled to unpaid wages.

What does that mean for South Carolina Strip Clubs?

The decision will likely send ripples throughout the circuit as companies ensure they’re in compliance with the FLSA. This is the breast possible outcome for these dancers and at the very least throws up a red light for employers attempting to misclassify their employees as independent contractors.

Not THAT red light.

If you’re interested in the basis provisions of the FLSA, you can read more here. And, as always, if you have any specific questions, shoot me an email at Jsummerlin@hortonlawfirm.net.