What award can an unpaid independent contractor expect? What are the legal incentives to pay contractors? I (Washington State, USA) worked, under contract, for an LLC (Los Angeles, California, USA) and never received payment. I was considered an independent contractor; contract specifies Californian jurisdiction. I have limited legal counsel and anticipate legal action in small claims court. I anticipate that no representative of that LLC will come to court, and expect a default judgment. For purposes of this question, let's say that the contract specified US$500 for my services, and I have received none of this. What awards can I expect? In what ways would a judge's decisions about awards be legally limited? $500? Interest? Time spent pursuing collections? Filing fee? Anything else? My research so far suggests $500 plus reasonable (less than credit card) interest. I am primarily interested in this because it doesn't seem that there are any legal incentives for LLCs to actually pay their contractors; if only a fraction of contractors seek justice, and the award never exceeds the originally agreed upon amount, then the rational decision would seem to be, don't pay the contractor. Are there any other legal disincentives for this behavior? I'm aware that Los Angeles has recently passed a Freelancer Protection Act, but to my knowledge, I am not covered by this act-- I am located outside of LA and the contract was entered into prior to the passage of this act.
What awards can I expect? In what ways would a judge's decisions about awards be legally limited? $500? Interest? Time spent pursuing collections? Filing fee? Anything else? My research so far suggests $500 plus reasonable (less than credit card) interest. Your lawsuit would be for breach of contract, probably filed in California small claims court for this small dollar amount. An award for breach of contract includes: the amount not paid pursuant to the contract, pre-judgment interest from the date that payment was due at the statutory rate in California (the legal rate specified in the contract applies until the contract is superseded by the verdict, but if the prejudgment interest rate is not specified in the contract, the rate is ten percent per annum from the date of the breach, California Civil Code § 3289), post-judgment interest at the statutory rate in California (10% per annum in a contract if not otherwise specified), and out of pocket costs incurred in filing the lawsuit (typically, the filing fee, the service of process fee, postage, copying costs incurred for trial exhibits, and any court fees incurred to collect the judgment if it is entered). Attorney fees are not available unless the contract says so. You are not entitled to any recovery for time spent pursuing collections. Often you have have a collections agency collect it for a percentage of the amount recovered (probably 50% in a claim of this size) plus a small fee, although they might not accept such a small dollar amount debt to collect. The main virtue of this is that it hurts the credit of the person who owes the money, a harm to the non-paying customer that is often far worse than not paying the amount owed on time. Are there any other legal disincentives for this behavior? A well drafted contract can provide for an award of attorney fees incurred in collecting the debt, can set a non-usurious interest rate and late fees for non-payment, and can take steps like requiring a deposit up front, or consenting to service of process by mail, to make collection more likely and to create stronger incentives to pay. Also, if the non-payment rate is low enough and the value of your time doing what you normally get paid to do is high, it may not make economic sense to pursue bad debt which takes some time and some money to get a small potential recovery, as opposed to letting it slide and doing more work that does pay. A small claims lawsuit is probably ten to thirty hours of work for which you will not be compensated even if you win. Depending upon your average hourly rate for your labor, and the percentage of your billings that go uncollected, it may not make economic sense to collect the unpaid bill, or you may want to delegate the job to someone else whose effective hourly rate of labor value is lower. Courts are cost effective places to collect large debts, and can be cost effective if many people owe you money and you can mass produce your collections process (as, for example, credit card companies do). But courts are often not cost effective for collecting one off small dollar amount debts, despite the streamlined process and reduced filing fees that are available in small claims court. if only a fraction of contractors seek justice, and the award never exceeds the originally agreed upon amount, then the rational decision would seem to be, don't pay the contractor. Consumers are not purely rational actors on a transaction by transaction basis in these matters. The vast majority of the time, people pay as agreed even though they could get away with paying less by forcing the person who did business with them to sue them to get paid. On a case by case basis, this is often not rational, but as a long term strategy for all transactions that a consumer enters into, it often does make rational sense. In small dollar transactions, blacklisting people from future business and harming their credit records is usually enough of an incentive to make uncollectible invoices an acceptable cost of doing business. But a good business person does evaluate every customer to whom trade credit is extended for creditworthiness if the customer does not pay in advance. On the other hand, as a business person, you may have a strategic interest in pursuing every unpaid invoice even if it isn't cost effective to do so when considering that unpaid invoice in isolation, in order to instill in your customers the knowledge that when you say you will sue them if you aren't paid, that you are making a credible threat. This may discourage people from not paying you in the first place.
Don’t ignore the debt collects In most jurisdictions, your failure to pay can and will be recorded on your credit history. This may affect your ability to obtain finance or the rate you pay for it. For credit reporting, there is no need for the creditor to prove the debt before doing this. For example. In general, you are not legally allowed to default on a contractual obligation (i.e. not pay the bill) even if the other party has defaulted on theirs (i.e. failed to complete the work). It is not clear that you have explained to the contractor that you are withholding the remaining payment until they have fixed the alleged defects or if you have just not paid the money. When you have a contract dispute you need to be clear and take active steps to resolve it. Perhaps head office thinks all these items have been resolved. Perhaps you think they are defects or omissions but they are actually within normal tolerances or are exactly what you contracted for. Unless you talk to them, you can’t resolve it. When you have set out the disputed items, given them a time to fix them, told them you will pay when they are fixed, and possibly set out an alternative method of resolution (like you accepting the defects for a 5% discount) then you have a bona fide dispute. At that point you can tell the debt collector this and they must stop pressing you and remove your name from the credit reports.
The software is "work for hire" and the copyright is owned by the client, not you. This is the default rule when copyrightable work is done on this basis in the absence of an agreement to the contrary. To not be "work for hire" you would have had to have a written agreement to the contrary or would have had to written the software before you were engaged by the client and then sold it to the client as an off the shelf finished product. [After further research I have determined that the language above is not accurate.] While you didn't have a written agreement, you did have an agreement reached without committing it to a final written form signed by both parties that is sufficient to cover all of the material terms of the contract and that is a binding and fully performed agreement. UPDATE: The "work for hire" issue is a bit more complex than I initially stated. Here is an American Bar Association summary of the issue in the independent contractor context (there is also a plausible argument that while the parties characterized you as an independent contractor for tax purposes that you were in fact of de facto temporary employee in which case it would automatically be work for hire, but I'll put that issue aside and take it at face value): Under the Copyright Act (17 U.S.C. §§ 101 et seq.), a work is a “work made for hire” only if: (1) it is prepared by an employee within the scope of his employment; or (2) it is specially ordered or commissioned from an independent contractor pursuant to a written agreement and the work falls within one of nine statutorily defined categories. . . . For works created by independent contractors, only the following types of works are eligible to be “works made for hire”: a contribution to a “collective work” (a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole); a part of a motion picture or other audiovisual work; a translation; a “supplementary work” (a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes); a “compilation” (a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship); an “instructional text” (a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities); a test; answer material for a test; or an atlas. This software is clearly specially ordered or commissioned from an independent contractor. I suspect that if you looked at the course of dealings including the client's specification of what work needed to be done (probably in part by email or in some other written form) that it would meet the requirement of a written agreement even though there wasn't a document called a contract signed by both parties. But, this still begs the question of whether it falls in one of the nine statutory categories. This American Bar Association source says that custom software doesn't qualify. The list above does not include many types of works that businesses frequently hire outside personnel to create, such as websites, logos, advertisements, photography, and custom software. For works that do fall within the defined categories, the business must have a written agreement from the author expressly stating that the work is made for hire for it to qualify as such. Although the agreement and course of dealings between a business and an independent contractor may give rise to an implied license for the business to use the works created by the contractor, it is highly preferable to avoid relying on an implied license. Any business that engages a non-employee to create a work and intends to own the copyright to such work should have a written agreement with the author expressly stating that the work is made for hire (if it falls within one of the eligible categories). If the work is not eligible to be a work made for hire, and for good measure even if it is, the written agreement should include a provision assigning the copyrights to the business. An example of such a provision is: “To the extent that the Work Product is not recognized as a ‘work made for hire’ as a matter of law, the Contractor hereby assigns to the Company any and all copyrights in and to the Work Product.” By including such a copyright assignment clause, a business will be able to obtain the copyrights it expects, even if the work does not qualify as a “work made for hire.” The copyright office's official publication on the subject provides a statutory citation (17 USC 101), and doesn't contradict the ABA presentation, although it is less detailed and specific on the legal issues. This section of the United States Code is a series of definitions. The relevant one states: A “work made for hire” is— (1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities. In determining whether any work is eligible to be considered a work made for hire under paragraph (2), neither the amendment contained in section 1011(d) of the Intellectual Property and Communications Omnibus Reform Act of 1999, as enacted by section 1000(a)(9) of Public Law 106-113, nor the deletion of the words added by that amendment— (A) shall be considered or otherwise given any legal significance, or (B) shall be interpreted to indicate congressional approval or disapproval of, or acquiescence in, any judicial determination, by the courts or the Copyright Office. Paragraph (2) shall be interpreted as if both section 2(a)(1) of the Work Made for Hire and Copyright Corrections Act of 2000 and section 1011(d) of the Intellectual Property and Communications Omnibus Reform Act of 1999, as enacted by section 1000(a)(9) of Public Law 106-113, were never enacted, and without regard to any inaction or awareness by the Congress at any time of any judicial determinations.
When a platform has the right to kick you out as they deem fit, without any evidence why they did it, does that change if you have a paid? It depends on the purpose of payment and the terms &amp; conditions it triggers. Your description reflects that payment entitles the user to have no ads &quot;and stuff&quot; (?). Payment does not necessarily entitle the user to continued access, diligence from customer service, or other features. Without fully knowing the platform's terms &amp; conditions regarding payment it is impossible to identify what obligations (other than not displaying advertisements) your payment creates on the platform. The information you provide here is insufficient for assessing whether you have a viable claim such as fraud or breach of contract. On the other hand, the platform's apparent arbitrariness and lack of response might support a finding of unfair or deceptive practices if the platform does not honor or proportionally reimburse your payment. Many jurisdictions have legislation prohibiting practices which are unfair, deceptive, or unconscionable (example: MCL 445.903). Oftentimes statutory law establishes an agency in charge of addressing customers' complaints.
It is not required that you sue each defendant in their own courts. Two of the defendants are natural persons living in the US (Utah, Florida), one is a US company (Utah and California), one is a Norwegian company, and one is a Norwegian natural person. This is one case, not five unrelated cases. If the court find against Carlsen, the plaintiff would need to go to Norwegian courts to enforce the claim. This is helped by the Norwegian Enforcement Act of 26 June 1992, the Dispute Act of 17 June 2005 and the Arbitration Act of 14 May 2004, which basically say that if you're found liable for a tort in US courts, you can collect via the Norwegian courts. Here is a more detailed analysis of the Norwegian legal situation. It is possible that under Norwegian law the US judgment against Carlsen would be reduced, depending on how big the award is. The suit involves, in part 15 USC Ch. 1 (antitrust law) where the US has asserted jurisdiction if there is a nexus to the United States (not just American companies), and under 28 USC 1367, plaintiff asserts that federal courts have supplementary jurisdiction over the state claims.
Unfortunately your employer is right. The rule says that in order for FMLA to apply to you, you must work at a location with 50 or more employees within 75 miles. Your client is not your employer, even if your employer considers it a place of business. This is outlined in 29 USC 2611 (2)(B)(ii): (1) Commerce The terms “commerce” and “industry or activity affecting commerce” mean any activity, business, or industry in commerce or in which a labor dispute would hinder or obstruct commerce or the free flow of commerce, and include “commerce” and any “industry affecting commerce”, as defined in paragraphs (1) and (3) of section 142 of this title. (2) Eligible employee &nbsp;&nbsp;(A) In general The term “eligible employee” means an employee who has been employed— &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) for at least 12 months by the employer with respect to whom leave is requested under section 2612 of this title; and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) for at least 1,250 hours of service with such employer during the previous 12-month period. (B) Exclusions The term “eligible employee” does not include— &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any Federal officer or employee covered under subchapter V of chapter 63 of title 5; or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any employee of an employer who is employed at a worksite at which such employer employs less than 50 employees if the total number of employees employed by that employer within 75 miles of that worksite is less than 50. So if you had 50 workers within 75 miles of you (regardless of state borders), then you would be eligible, unfortunately since you do not have that, you are not eligible for FMLA. The number of workers at the office that are not employed by your employer do not count. You are right that the reason for the 50 employee rule is to lessen an undue burden on an employer without adequate resources to cover your absence, but you don't have a case since you are not defined as an "eligible employee" by law.
The Commonwealth of Virginia defines a worker as an employee if his or her employer: Furnishes, tools, materials and equipment needed to do the work; Sets the hours of work; Withholds payroll federal and state income taxes and Social Security taxes Receives direction and training from the employer about how to do the work; and Is paid by the hour, week, or month instead of being paid at the completion of a job Virginia also lists the 20 IRS factors and Virginia exemptions for Employee Classification on their web site. One of the factors in determining if a worker is an employee states, "If the employer furnishes significant tools, materials and other equipment by an employer, the worker is generally an employee." Other factors include whether or not the employer can discharge a worker or if the worker can quit work at any time without incurring liability. There are many factors that will be unique to your particular situation that will determine if you were an employee or a contractor. If you were an employee and not a contractor then, in Virginia, the employer would have had to pay you at least minimum wage for your efforts. Generally speaking, an employers recourse for dealing with a non-negligent employee who performs their work incorrectly is to terminate the employment relationship. It is generally not acceptable to dun the worker for damages that occur during the normal course of business. If, on the other hand, you were an actual contractor then your contract with your client will be the guide in how you were paid and would also define the damages for which you are responsible for work not performed to contractual specifications. It is still possible to pay an employee for piece work. This is often done in construction and could make sense for the type of work you were performing. However, the Fair Labor Standards Act requires that the employer maintain records regarding hours worked so that there is an assurance that minimum wage and overtime rules are followed. There is a good article related to the construction industry that provides a good explanation of the details. Most state employment commissions, including Virginia's, provide assistance to workers to help them determine if they were properly classified. Virginia's website does this as well allowing you to call or send an email.
Anyone who is an employee as defined in the federal Fair Labor Standards Act of 1938 (FLSA), 29 USC 201 et seq.(or parallel state minimum wage laws) and is not within the scope of an exemption to the minimum wage law, must be paid minimum wage. The relevant question is whether or not the person is an employee who is not exempt from the minimum wage requirement as defined in the FLSA. The question is a mixed issue of fact and law in which the characterization given to the relationship by the company and the person doing the work is one factor, but not the only or the controlling factor, in determining employee status. The exact nature of the work governs whether the FLSA's minimum wage requirement applies or not. For example, "employee" is defined for puroses of the FLSA at 29 USC 203(e) to exclude "any individual employed by an employer engaged in agriculture if such individual is the parent, spouse, child, or other member of the employer’s immediate family" and certain kinds of volunteers. Piecework pay is allows under certain limited circumstances by 29 USC 207(g) when the usual result is that reasonable workers earn the minimum wage. Tipped employees (which is a form of revenue sharing) also receive special treatment. Most of the exemptions are found at 29 USC 213. Most relevant to your question is 29 USC 213(a)(1) which includes an exception for an "outside saleman" who is paid on a straight commission basis, and 29 USC 213(a)(5) and (a)(6) which contain exclusions for certain farming and fishing occupations. Straight commission compensation without regard to the minimum wage is generally not permitted with regard to an employee who is an "inside salesman" (e.g. someone who works at a retail store in a mall or at a phone bank for a telemarketing company), or for anyone other than an outside saleman in non-agricultural jobs. Independent contractor status generally depends upon the degree of control that the company has over the manner in which the work is performed, the assignability of the contract to do the work, and the extent to which the worker does work for many different companies on a contract basis while complying with employment related laws for the contactor's own employees (e.g. worker's compensation). The working for many different companies on a contract basis prong of the test is frequently controlling in practice. Six of the main factors considered by the Labor Department in determining independent contractor status are discussed in Fact Sheet #13. A true independent contractor may be paid on a revenue sharing basis without regard to minimum wage, although in practice, if this results in the independent contractor earning less than minimum wage, there will be strict scrutiny of the practice. Typical independent contractor arrangements that would be allowed would include an attorney working on a contingent fee basis, or an independent broker or realtor working on a straight commission bais. More often than not, a true independent contractor is someone you couldn't even imagine being an employee subject to minimum wage laws of the company in light of the overall relationship and often this will involve a business to business contract, rather than a business to a non-professional individual contract with only personal services involved. There are some safe harbor provisions that if met can insure independent contract status, but it is very common for someone who legally is an employee to be misclassified as an independent contractor in an attempt (often futile if the matter is pressed by regulatory or tax officials) to avoid compliance with laws incident to the employment relationship.