Workers’ Compensation: Not So Independent Contractors
By: Meredith Ullman | 5/13/2013 | Category: Workers Compensation-Independent Contractors
Many Ohio employers are operating under the false assumption that providing a worker with a 1099 form is sufficient to create an independent contractor relationship. Ohio employers must understand that providing a worker with a 1099 form, or even creating a specific independent contractor agreement, is not sufficient to remove a worker from coverage under the Ohio Workers’ Compensation Act.
Ohio workers’ compensation has its own standard which is applied to determine whether or not an employment relationship exists. The workers’ compensation standard is generally broader than the master/servant standard used by courts. The main question asked in determining employment status for workers’ compensation purposes is “who has the right of control?” If the right of control is delegated to the person performing the work, the person is an independent contractor.
So, while you may believe your business is in the clear by providing a worker with a 1099 form and an independent contractor agreement, neither are sufficient determinants of employment status. A worker may still be considered an employee and need workers’ compensation coverage.
- Factors which help determine control include:
- The person who controls the actual details and quality of work;
- The person who sets the hours worked;
- The person who maintains and decides on the materials, tools and additional people used;
- The person who determines how to get to and from projects;
- The person who sets the length of the project;
- The person who decides the type of business;
- The person who determines method of payment; and
- Whether there are any relevant agreements between the parties.
Additionally, please be aware that there are other pitfalls in misclassifying an employee as an independent contractor. If the employee works more than forty hours a week, there are potential wage and hour issues, as well as possible tax withholding issues.
Lastly, if you are hiring an independent contractor who has his own employees, check to ensure the independent contractor has workers’ compensation coverage. As a general contractor, you may be on the hook for the employee of an independent contractor you hired, should that independent contractor not have coverage for his own workers.
Please do not hesitate to contact Meredith Ullman or any of the experienced workers’ compensation attorneys at RBS with questions concerning the use of independent contractors.