Can an employer bill me as contract labor to avoid paying overtime?

UPDATED: Sep 16, 2011

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Can an employer bill me as contract labor to avoid paying overtime?

I recently requested my week’s paid vacation off from an employer and was told that the only way I could take it this month was if I did the work I would have done then ahead of time. I was told I would be paid my normal wage but that they could not pay me overtime because they couldn’t afford it so I would be billed as a contractual employee at the rate in which I work currently. I work full time otherwise. Is this legal?

Asked on September 16, 2011 under Employment Labor Law, Texas


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

First of all, if you have accrued a week's paid vacation, you should not have to work twice as hard to take it. You are entitled to the time off with pay and your employer needs to understand that it must accommodate you. Secondly, by trying to then change your work time period will actually harm you because it would appear for one week they want you to pay your self-employment tax because you would be billed as a 1099 independent contractor and the taxes you pay on that is much higher than your W2 employment status. Quite a shock is it appears they prefer to cheat the government and believe you would accommodate. Do not allow your employer to bully you into this situation but keep in mind that in most situations while retaliatory firings are illegal, employment is still considered at will. Talk to your state's labor department before confronting your employer.

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