In the case of Faludi v. U.S. Shale Solutions, LLC., Jeff Faludi, a consultant who formerly worked for U.S Shale Solutions (an oil and gas company), claimed that he was entitled to overtime pay for all hours that he had worked exceeding the 40-hour weekly minimum.
Faludi was given a fixed monthly pay, regardless of how many hours he put in. That said, he could set his own time and work from anywhere he wanted to. It was clarified in the case that Faludi was not subjected to the same level of supervision, guidance, or control that other U.S. Shale Solutions employees were.
With all that considered, the Fifth Circuit court decided that Faludi was an independent contractor and was not entitled to overtime.
Key lessons from this case:
- Overtime pay applies to employees only. Those identified as “independent contractors” are excluded from receiving overtime.
- Employers who hire independent contractors must ensure that their contract clearly states the worker’s employment status.
If you want to know more about overtime regulations, read our guide on Texas Overtime Laws.
