Issue: The issue in this case is whether or not the defendant (John), the real estate office owner, should compensate the plaintiffs (independent contractors) to make up their differences in wages to be paid minimum wage when commission base pay is lower than minimum wage. In essence, the real issue exists of whether or not these independent contractors are actually employees.
Rule:
The FLSA covers only employees, not independent contractors, who typically are hired to work on specific projects. However, whether a person is an employee for purposes of the FLSA generally turns on whether the worker is employed by a single employer. There are three different tests that can be used in order to classify the plaintiffs as employees rather than independent contractors. In this case, the plaintiffs are considered employees by law under the FLSA and the IRS 20 part test.
Application:
In this case, there is much proof that the plaintiffs are employees of the defendant. The first piece of evidence is the defendant requiring the plaintiffs to work at the office three days a week from 9-5 on what he calls floor time. Setting required hours of time and requiring work on employer premises is under the IRS 20 part test. The second piece of evidence is the defendant requiring a specific colloquy for the contractors when speaking with the customers. Setting instructions for work is under the IRS 20 part test. The third piece of evidence is the defendant requiring reports of all sales calls, sales visits, and customer feedback. Setting reporting requirements is under the IRS 20 part test.