Employers within the life sciences industry must understand that misclassifying employees as exempt could lead to significant financial risks. Pursuant to 29 U.S.C. § 216(b), some of the monetary damages available to prevailing plaintiffs include attorney’s fees and costs, liquidated damages that should amount to unpaid overtime, and unpaid overtime wages. Additionally, we added that pursuant to 29 U.S.C. § 255(a) of the FLSA, some of the damages recoverable for at least twenty-four months since the date the claim was brought and available to prevailing plaintiffs include liquidated damages and unpaid overtime.
As a continuation of our discussion, this blog post is an overview of some of the concerns independent contractors have when working and engaged with the life sciences industry.
Independent Contractor Concerns within the Life Sciences Industry
Employers within the life sciences industry engage in the common practice of using independent contractors as a way of supplementing the workforce. For instance, contract workers are known to be highly involved in clinical studies, medical research, and development within the biopharmaceutical arena.
Employers must understand that in order to avoid typical pitfalls, they must determine whether a worker is working as an independent contractor or as an employee. Making such a determination is critical because, for example, unlike workers working as employees, it is the responsibility of independent contractors to undertake their own tax reporting and withholding, but they do not always do so. Another thing to note is that independent contractors are not essentially entitled to analogous protections provided under state law (e.g., workers’, disability, and unemployment compensation protections) and the lot of benefits enjoyed by employees pursuant to 29 U.S.C. § 1001 et seq. and subject to ERISA (Employee Retirement Income Security Act of 1974).
In this regard, employers within the life sciences industry should be aware that the designation of workers as independent contractors is often scrutinized and evaluated by the Department of Labor (DOL), the Internal Revenue Service (IRS), and a number of state regulators. Usually, when assessing whether workers are sufficiently subject to the control and direction of an employer (such that they would be qualified to enjoy the protections and benefits entitled to employees) or whether the economic reality is such that they are truly independent, state regulators and federal agencies have to consider a myriad of factors.
Accordingly, employers must be aware that in order to determine whether a worker is an independent contractor or not, state regulators and federal agencies look into factors that include, but are not limited to:
In Part X of this series and our blog post titled “Trainee, Volunteer, & Intern Concerns within the Life Sciences,” we shall move the discussion forward by hammering on the concerns employers should have when trainees, volunteers, and interns are engaged in the business activities of the life sciences industry.
In the meantime, stay tuned for more legal guidance, training, and education. In the interim, if there are any questions or comments, please let us know at the Contact Us page!
Always rising above the bar,
Isaac T.,
Legal Writer & Author.