Updated June 23, 2020:

Independent Contractor Not Paid for Work

Unpaid wages for work are different for employees and independent contractors. An independent contractor not paid for work that he or she completed may be wondering what recourse he has against his client and how to make them pay as agreed. Unfortunately, it's not uncommon for independent contractors to have difficulty being paid by their employers. These employers, who may be facing difficult times financially, may also cut the pay of their regular employees. However, both types of workers have the right to be paid as agreed.

Are payments to independent contractors considered wages?

The main difference in payments to independent contractors is considered per project they complete. The wage is different for an employee and a contractor. As a contract worker, you are not paid by wage and hour. An independent contractor has no employee benefits. Since they are not employees of that company. An employee is paid an hourly wage for the company they work for. They are payment employees who are paid by a set schedule. The minimum wage is entitled to an employee along with other employee benefits. Employment laws vary vastly among employees and independent contractors

What is an independent contractor?

An independent contractor is considered as someone who is a freelancer. This means that they are paid by completing specific tasks and assignments. The set schedule to complete the task is within a time frame. This involves a contractor agreement between the service providers and you. As an independent contractor, you don’t receive health insurance.

What is a 1099 Worker?

A 1099 worker is another name for an independent contractor. It determines what type of worker you are. By nature, the wage claim and pay situations should be accepted by both parties. As some may fail to pay the worker on time it is important to reach out to an attorney for additional information. And the laws vary depending on what state you are in. By state laws, employers are required to pay employees a wage based on the job. 

Do Independent Contractors Have any Rights?

Self-employed freelancers have the rights to a contract, control, and decisions, as well as the ability to work full-time or part-time. You can work from anywhere and collaborate with other freelancers. When a client does not pay on time, independent contractors might impose late fees. 

Because independent contractors are not considered as an employee, they are not covered by most federal labor laws or employment laws. They are not protected against discrimination laws in the workplace under Title VII. As a business person, you also don’t have any employee benefits because you are self-employed. 

An independent contractor not paid for work has the right to file a claim. Not only should you file a complaint with the state department of labor for unpaid wages, but you should also file a claim with the federal department of labor (enforcing the FLSA, the fair labor standards act). 
If you were misclassified as a non-employee, you should be entitled to receive compensation from one company or both.

Employees vs. Contractors

It's important to know whether your employer considers you an independent contractor or an employee, especially if the company you have done work for is in the process of declaring bankruptcy.

The basic difference between the employee and the contractor is that an employee's day-to-day work is directly supervised and controlled by the employer, and an independent contractor works unsupervised without the employer telling them exactly how the work must be done. Employees are paid by wage and hour, while contractors are typically paid by their services. Dealing with nonpayment for the work performed is different for employees and independent contractors.

Employees and Nonpayment

Employers are obligated to pay their employees and must offer fair pay, at least the minimum wage required by their state. They also must pay overtime hours, and the pay must be distributed immediately and on a regular basis. Every state has specific laws that govern how employers pay their workers, and it's also regulated by the federal Fair Labor Standards Act.

Employees who do not feel they are being paid as agreed need to contact the employer in writing before doing anything else. Explain in detail what payments were not made as expected, including overtime or late paychecks. If this doesn't work, you can do one of the following:

  • Contact an attorney that handles this type of case. They will help you get the pay you're owed, but you will also have to pay the attorney for their time. Many attorneys of this type agree to be paid only if you win the case. You can also specify that the attorney's fees will be paid as part of the settlement by the employer.
  • Contact your state's employment agency, specifically the wage and hour department, to file a claim against the employer.

Either process can take a long time, and it's possible you may never get paid. Be sure to keep all documentation given to you by the employer that proves how much you are owed. This may include pay stubs from previous paychecks, letters or emails, employee guides or handbooks, or any other relevant documentation. Doing so will help substantiate your claim and increase your chances of success.

Contract Workers and Nonpayment

Independent contractors typically have contracts with their employers, who are also referred to as customers or clients. If they don't, they should. However, it may still be possible to force your client to pay as agreed without a written contract.

Just like employees, contract workers should send their claim to the business in writing. This letter should explain in detail the work that was performed and the payment that is expected in exchange. If you do not have a written contract, gather all documentation you do have, including previous payments and tax documents, such as a 1099 form.

If the written request does not result in payment, your next step is to hire an attorney. They will help you sue for payment, and the more documentation you have available, the better your chances of success will be.

Small Claims Court

Whether you are an employee or an independent contractor, you can go to small claims court to attempt collection from an employer or client. Each state has its own limitations on the amount you can claim in small claims court. However, be aware that you may still have difficulty getting payment even if you win your case.

Bankruptcy of a Business

If you have been doing work for a business that files for bankruptcy, you may have an even tougher time getting paid. Businesses that file bankruptcy have to pay claims for money they owe in a specific order, and independent contractors are rarely at the top of the list. However, this doesn't mean you should give up. Contact an attorney, and be patient, and you may get the payment you are entitled to.

Types of Control

A control helps the company evaluate the relationship between the goals and performance of the company. This is a type of process that a manager uses to set the company standards. 

  • Workers hours
  • Relationship between the two parties
  • Workers expectations

Consult with an attorney based on your situation. Once an attorney has answered your question, you can choose whether to handle your issue with management or a government agency.

If you need more information or help with an independent contractor not paid for work, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.