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April 26, 2011
Was Maintenance Worker an Independent Contractor?

A janitorial and building maintenance worker sued the company he worked for for unpaid overtime. The company claimed the worker was an independent contractor and not an employee.

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What happened. “Rahij” maintained three properties in the Chicago metropolitan area for Wilmette Real Estate and Management Company from 1996 to 2008. After he was fired, Rahij sued Wilmette for failure to pay him overtime in violation of the Fair Labor Standards Act (FLSA), claiming that for several years he’d worked 66 hours per week.

What the court said. The U.S. District Court for the Northern District of Illinois explained that when determining whether a worker is an employee under the FLSA, it applies a six-factor test used by the 7th Circuit to determine the “economic reality” of the working relationship. Here are the factors, along with the court’s application of each to Rahij’s case.

  1. The nature and degree of the alleged employer's control as to the manner in which the work is to be performed. “[Wilmette] controlled the manner in which [Rahij] performed his work by setting his work schedule, monitoring the quality of his work, and disciplining him when his work did not meet [Wilmette’s] expectations,” including his termination.
  2. The alleged employee's opportunity for profit or loss depending upon his managerial skill. “[Rahij] had no opportunity for additional profit or loss from his janitorial and maintenance work for [Willmette] because his compensation consisted of a fixed, bi-weekly salary and a rent free apartment.”
  3. The alleged employee's investment in equipment or materials required for his task. “[Wilmette] essentially provided [Rahij] with all of the supplies and materials he needed to perform his assigned duties.”
  4. Whether the service rendered requires a special skill. “[T]he majority of [Rahij’s] day-to-day tasks principally entailed rudimentary janitorial and building maintenance skills.”
  5. The degree of permanency and duration of the working relationship. In Rahij’s 12 years of employment, Wilmette reported his “annual compensation to taxing authorities using W-2 Statements and also made regular bi-weekly payroll withholdings from his salary for federal and state income taxes, Social Security and Medicare, and unemployment taxes.”
  6. The extent to which the service rendered is an integral part of the alleged employer's business. “[Rahij’s] duties—cleaning, maintaining and repairing—can be fairly characterized as duties integral to [Wilmette’s] business…” Bulaj v. Wilmette Real Estate and Management Co., LLC, No. 09 CV 6263 (2010).

Point to remember. The court found as a matter of law that Rahij was an employee and not an independent contractor. Therefore, Wilmette’s failure to pay overtime pay violated the FLSA.

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