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Texas - Contract Labor or Employee

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  • Texas - Contract Labor or Employee

    First off thanks to all those who post and help others in these forums.

    My situation is full of red flags. I am positive that there are several laws being violated, but I need assistance in determining what kind of ground myself and other workers have to stand on.

    I, along with approximately 15 other people, work for a dance studio in Texas. When you are initially hired, you are told the following: You will receive hourly compensation for hours worked that you are Teaching and The employers will train you at their cost, and continue training you throughout your employment.

    They do have a contract they attempt to have employees sign. I say attempt because I have told them I will not sign it due to the many flaws it contains. It contains a no-compete clause. I have researched this area and found that a no-compete clause is now enforceable in Texas IF the employer upholds their end of the contract. In this case, their end states they will continuously train their employees in the art of dancing in order to be qualified to teach in their studio. They are not providing training. Instructors are buying DVD's online to learn material they teach. So already the non-compete clause is losing weight.

    The contract itself is very generic and explains that the studio is an at will employer. It does not state an exact hourly rate of pay, commision. The exact wording in the contract that refers to your status is:

    " I acknowledge that I work as contract labor and pay my own federal income tax and social security __________ Initials"

    Now here is the major issue. They have recently added two pages to the contract stating that full time and part time employees have a "required schedule". They specifically state that full and part time employees have a required schedule, and additionally are "required" to attend sales training meetings. They did attempt to get employees to sign the new contract with the added pages, but again, I denied.

    Here are my points of concern:

    1. They are requiring employees be on site and ready to teach, yet they are not compensating them unless they are actively teaching lessons. Example: A full time employee works 10 hours a day, but may only teach 5 of those hours. The remaining time is spent waiting for walk in customers. Duting this "limbo" time the instructor is being told they cannot leave without supervisor approval.

    2. They are mandating lunch breaks for one hour for full time employees. And have recently added a sign in sheet. They are telling employees they must sign in and out when they are leaving.

    3. The studio refers to us as independant contractors, yet we rely on studio material, guidelines, advertising and curriculum to perform our job. We are assigned students, told what level dancing to teach them, and have to adhere to strict guidelines as to what material we can or cannot teach them. We are provided all written material and literature to use during the lessons. I list these things because I believe this goes against the rules of us being considered independant contractors.

    4. We fill out a time sheet for a weekly paycheck. The owners then proof each time sheet and make any adjustments they see fit. We do not receive any form of pay stub for our records, merely a handwritten check with the amount earned and a description of "payroll".

    I, along with a couple instructors, am very meticulous about recording the hours I have worked. Including what time I am in limbo and teaching. Would this information prove useful if/when I seek reimbursement for unpaid hours?

    My general thoughts on this situation are that the owners want the benefit of having independant contractors so they are not forced to pay taxes, yet they want the control of Employees and hourly work effort of employees. Does anyone know of specific laws and/or case law I can cite when I approach the owners?

    Thank you in advance for any assistance!

  • #2
    If you're going to be an IC, why does it matter what employees are required to do?

    OTOH, whether or not you meet the criteria to be deemed an IC is debatable. Have you checked this?
    http://www.irs.gov/taxtopics/tc762.html
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

    Comment


    • #3
      I have no problem being an IC and paying my own taxes. That is not my issue. My issue is that IF I am being carried and paid as an IC, ie. being paid when I teach only, then what legal standing do I have when my employer requires me to be on site for the other hours but does not pay me?

      On average FT employees work 50-60 hours a week. Yet they only get paid for teaching hours, which could be as low as 10 hours. So that's 40-50 hours we are "required" to be there but not getting paid for it.

      Comment


      • #4
        You don't have any, unless you've covered this in your agreement/contract. The company (it's not theoretically your employer unless you're an employee) may require whatever you agree to. Wage and hour laws do not apply to ICs.
        I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

        Comment


        • #5
          I'm going to answer the questions from the link you provided, thank you by the way. Maybe this will shed some light and allow you to help me in determining if we are, in fact, IC's or employees.

          Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training, or other means. The studio has total control over what, when and how we teach. We are provided a syllabus to teach from, a breakdown of what happens on certain hours of teaching, and methods of sales we have to follow.


          The extent to which the worker has unreimbursed business expenses If we go to a competition, the studio pays for our travel and room/board.


          The extent of the worker's investment in the facilities used in performing services The studio is in a space rented by the owner.


          The extent to which the worker makes his or her services available to the relevant market We are not allowed to solicit student's outside the studio. Any solicitation or marketing is done by the owners.


          How the business pays the worker We get paid when we teach, that's iut.


          The extent to which the worker can realize a profit or incur a loss We receive a commision on sales we achieve. As an example, if we sell 10 lessons at $100 per hour, we get 8% commision and an hourly rate to teach those 10 lessons.


          Written contracts describing the relationship the parties intended to create This is the tricky part. In the contract are several things, a promise to stay with the studio for 18 months, a no-compete clause for two years after termination of employment, and an agreement to not solicit any students or prospective students outside the studio. Any refererence to the worker or owner in this contract is Employer/Employee.


          The extent to which the worker is available to perform services for other, similar businesses According to the contract, we are not allowed to teach dance anywhere within 50 miles during our term, or for two years after.


          Whether the business provides the worker with employee–type benefits, such as insurance, a pension plan, vacation pay, or sick pay No benefits are given.


          The permanency of the relationship Contract states 18 months, but is at will and the employment can be terminated by the emmployee or employer at any time with notice.


          The extent to which services performed by the worker are a key aspect of the regular business of the company Not sure I understand what the intent of this one is, but our services are the key aspect of what the studio does.

          Comment


          • #6
            The preponderance of the evidence here leads me to the conclusion that you should be an employee, with all the rights and responsibilities of an employee. Hence, at least minimum wage for all hours worked (which includes the "sitting and waiting" time the company requires you to be physically present) and overtime pay for hours worked over 40.

            I recommend you have this "agreement" reviewed by an attorney versed in contract/employment law. Honestly, I'm not sure I'd be wanting to sign this either. Is it common in the industry to treat trainers such as you as ICs?
            I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

            Comment


            • #7
              Yes it is common for dance instructors to be categoried as IC's. In talking/visting other studios, they are treated as what I call "true IC's". They schedule their own lessons, make their own sales, teach from their own syllabus. They can come and go as they please when not teaching, understanding that if they are not in the studio, they may miss a walk in customer.

              They usually sign a contract with the studio indicating that they will pay the studio a fee for the use of the floor, and respect the hours of operation ect. If this were the case for my studio, I would have little or no complaints.

              This usually happens when a person opens his/her own studio and has their own students. They in turn, allow other instructors to use their floor to teach, so long as the instructors pay a fee.

              I will take your advice and seek a lawyer's help. I thank you for your time and input. I really wanted to see if indeed there was some indication of bad things here before I paid a fee to consult an attorney. But who knows, if I can provide documentation on the laws to my employer, they may have a change of policy. One can only hope, because I love doing what I do.

              Comment

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