VMS Data Sales Agents Misclassified as Contractors, Denied Overtime Pay, Lawsuit Claims

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Online marketing company VMS Data, LLC and its owners face a proposed collective action wherein a former employee claims inside sales agents were misclassified as independent contractors and deprived of proper overtime wages.

Per the case, the workers should have been classified as employees given the nature of their jobs, and entitled to overtime protections under the federal Fair Labor Standards Act (FLSA). As a result of VMS Data’s treatment of its employees as independent contractors, the workers have been denied time-and-a-half overtime pay when they worked more than 40 hours per week, the suit alleges.

The plaintiff says he started working for the Maricopa County, Arizona-based company in September 2016 as an opener and then worked as a closer before being promoted to a marketing director. Throughout the plaintiff’s employment, which continued until December 2019, he was responsible for performing inside sales-related duties with the aim of selling websites to businesses, the case relays. The plaintiff estimates he worked between 35 and 45 hours per week on the clock with another 20 hours per week off the clock.

While the plaintiff and other inside sales agents were classified as independent contractors, and therefore denied overtime pay, the lawsuit argues that the workers “were actually employees” for the following reasons:

• Workers were required to use VMS Data’s equipment and wear uniforms;
• The defendants provided the workers with a script to use on sales calls;
• Workers were required to perform tasks off the clock when they worked from home;
• The defendants controlled the agents’ schedules;
• Sales agents were economically dependent on VMS Data;
• The defendants maintained the right to hire, fire and discipline workers;
• Sales agents were supervised and subject to the defendants’ policies and rules;
• Workers had no financial investment in the defendants’ business and no opportunity for profit or loss;
• The services performed by sales agents were integral to the defendants’ business; and
• Sales agents were hired as permanent employees to work for the defendants for “continuous unspecified amounts of time.”

Per the lawsuit, VMS Data classified inside sales agents as independent contractors in order to avoid its obligation to pay time-and-a-half wages for the hours they worked in excess of 40 each week. The case claims the defendants “knew that—or acted with reckless disregard as to whether—” their failure to pay sales agents overtime wages would violate federal and state law.

“As such, Defendants’ conduct constitutes a willful violation of the FLSA,” the complaint alleges.

The lawsuit looks to represent anyone who worked for the defendants as an inside sales agent within the past three years and was not paid one-and-a-half times their regular rate of pay for time spent working in excess of 40 hours per week.

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