Can I pay an independent contractor a high rate against future revenue with the downside that they might not make minimum wage?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Can I pay an independent contractor a high rate against future revenue with the downside that they might not make minimum wage?
Asked on June 9, 2013 under Employment Labor Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
IF the person truly is an independent contractor, you can pay him/her however you and he/she agree; independent contractors are not employees and are not covered by minimum wage requirements. Note though, that just because you call someone an independent contractor or issue him/her a form 1099 does not, by itself, make him/her an independent contractor. An independent contractor is, as the name implies, "independent" to at least some significant degree: e.g. he/she controls how the job is done; provides own tools and equipment; has at least some say over hours and place of work (some work may need to be done at your location or during certain hours, but anything where the contractor could be flexible, he or she must be free to be flexible); can make a profit or realize a loss; markets or advertises own services; usually has more than one client/customer, if not exactly at the same time, at least in succession. If on the other hand, the "independent contractor" works only for you and in essentially all respects but name functions as an employee, the law will treat him/her as an employee and you will have to pay minimum wage, pay the employer portion of withholding, etc.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.