The U.S. Department of Labor requires employers to pay workers at least minimum wage - $7.25 per hour - and time-and-a-half their regular pay rate if they work more than 40 hours in a week. There are some exceptions included in the Fair Labor Standards Act (FLSA), which free businesses from their normal payroll obligations. One exemption covers independent contractors - individuals who are hired to perform a skill-specific job one time or on multiple occasions, but do not have an employee relationship with the company.

This means the employer can't exert complete control over the work contractors perform, require them to wear uniforms or dictate specific schedules. If a business falsely classifies employees as independent contractors to avoid paying them the wages they are owed, the Department of Labor's Wage and Hour Division can demand back wages and penalties for non-compliance.

According to the Wage and Hour Division, common problems with employment relationships include:

- Construction companies misclassifying bona fide employees as independent workers.
- Employers failing to pay employees for volunteer time, if it involves work that is routinely performed during scheduled hours.
- Businesses considering homeworkers independent contractors, when they are actually employees.

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