Ohio Independent Contractor Law

Sep 30, 2021
By Peter Friedmann

There are discrepancies between Ohio’s laws for independent contractors and the protections provided by the Fair Labor Standards Act (FLSA). For instance, in Ohio, independent contractors are not entitled to certain FLSA protections, such as minimum wage and overtime regulations. To discern which standards apply to you, it is essential to determine if you are an employee under the FLSA or an independent contractor governed by Ohio laws.

Ohio Independent Contractor Law – Classifying An Independent Contractor

Understanding the distinction between a typical employer-employee relationship and the criteria that define an independent contractor is crucial. Your status, whether as an employee or an independent contractor, will dictate the laws relevant to your employment.

The FLSA stipulates that an employer-employee relationship “must be distinguished from a strictly contractual one.” There isn’t a single rule or test to ascertain if someone is an independent contractor or an employee. Nevertheless, the U.S. Supreme Court deems several factors significant when making this determination:

An employer/employee relationship, according to the FLSA, “must be distinguished from a strictly contractual one.” There is no singular rule or test that determines if someone is an independent contractor or an employee. However, some of the factors that the U.S. Supreme Court consider significant in determining if someone is an employee or an independent contractor include:

  • The degree of independent business organization and operation of the independent contractor/employee;
  • The overall permanency of the relationship between individuals;
  • The alleged contractor’s investment in facilities and equipment, if any;
  • The general extent to which the services provided are an integral part of the business; and
  • The amount of control the employer/business has over the independent contractor/employee.

Essentially, an independent contractor is “engaged in a business of his or her own.” These factors will vary for each individual. According to the Ohio Department of Job and Family Services, an independent contractor is someone who is “under contract to perform a special service for an employer.” For matters like unemployment insurance tax reporting for Ohio independent contractor law, independent contractors are excluded from benefits such as being able to claim unemployment insurance. Additionally, an independent contractor’s employment usually has a set term and is not considered indefinite.

What To Do If You’ve Been Misclassified

If you believe that you have been misclassified by your employer, it  is crucial that you speak with an experienced employment lawyer from The Friedmann Firm, LLC. Misclassification can result from either a genuine oversight by your employer or a deliberate act. Regardless of the intent, an employment lawyer can help you navigate the complexities of your specific situation. We aim to ensure you receive appropriate compensation for all work hours and have access to the benefits and rights you deserve.

Some steps to take before consulting with an employment lawyer include:

  • Keeping track of your pay stubs as soon as you realize you may be misclassified.
  • Keep a record of other relevant information, such as your employment contract and other key documents such as communication between you and your employer about the misclassification.
  • Compile details about your job duties. This will aid both you and your lawyer in determining your accurate classification.

Frequently Asked Questions

What is the 4113.15 law in Ohio?

Section 4113.15 of the Ohio Revised Code specifies rules for the prompt payment of wages. It also clarifies conditions under which employers can make payroll deductions. According to this law, wages must be paid at least bi-monthly unless an industry commonly follows a longer payroll period or if mandated by law.

What is the difference between an independent contractor and an employee in Ohio?

An employee is someone that an employer has hired to work for them. This establishes an employee/employer relationship, which provides the employer with the right to control how an employee performs their job duties.

In contrast, an independent contractor enters into a service agreement without establishing an employee-employer relationship, maintaining autonomy in their work execution.

How do I become an independent contractor in Ohio?

There are multiple avenues, such as contracting with rideshare platforms like Uber or Lyft. Independent contractors also encompass freelance professionals like writers, cosmetologists, and other service providers.

Does Ohio law protect independent contractors?

Unfortunately, independent contractors are not offered protections under Ohio employment laws, such as discrimination laws, employee benefits or unemployment benefits.

What happens if an independent contractor is not paid on time?

While independent contractors are not afforded  the same protections as employees when it comes to being paid, that does not leave them without any options. Independent contractors still have the right to be paid as agreed between both parties. A contractor may impose late fees, pursue legal action if their contract has been breached, and they can file a claim with the Department of Labor.

Can an independent contractor bring a discrimination claim?

The U.S. Equal Employment Opportunity Commission (EEOC) specifies that independent contractors are not covered by anti-discrimination laws. This means that they cannot file a discrimination claim against an employer they are working with.

Can an independent contractor collect unemployment?

Under current state law, independent contractors cannot collect unemployment.

Are independent contractors eligible for Ohio Paid Family Medical Leave?

Independent contractors are not eligible for Ohio Paid Family Medical Leave.

What employee benefits do I miss out on by becoming an independent contractor?

As an independent contractor or someone who has been misclassified as one, there are a number of benefits that you miss out on. You miss employment benefits like:

  • Health insurance
  • Paid time off
  • Stock options
  • FMLA
  • Protections afforded by the FLSA, like minimum wage and overtime pay

Be sure to contact The Friedmann Firm, LLC if you believe you have been misclassified as an independent contractor. We can help determine if you have been misclassified and help you seek legal action.

Who decides whether I’m an employee or an independent contractor? What if a government agency determines that I am an employee?

Generally, your employer classifies you based on your duties and relevant state and federal regulations, including the FLSA, FMLA, and the Internal Revenue Code. If a government body classifies you as an employee, it indicates your role aligns with their guidelines for employment status.

Do I need to use written agreements when I do contract work for clients?

Yes, you should always utilize written agreements if you perform contract work for clients. You are conducting business and a written agreement protects both you and your client during the time period you perform services for them.

Who is liable if I am wrongly classified as an independent contractor?

The employer who misclassified you typically bears liability. Misclassification could deprive you of benefits like minimum wage, overtime, FMLA, health insurance, and more.

Can an independent contractor be held to a non-compete agreement?

Independent contractors can be held to non-compete agreements they’ve signed if the agreement is deemed reasonable under Ohio law. If you have concerns about such agreements, consult with a specialized lawyer before signing.

Some independent contractors may not be willing to sign a non-compete agreement, in which case they will not be enforceable. We recommend speaking with a non-compete agreement lawyer before signing a non-compete agreement, especially if you have questions about what the agreement means for you.

For further questions on how to determine whether you are subject to FLSA or independent contractor laws, please contact the Friedmann Firm LLC for a free consultation.

The Friedmann Firm LLC is based in Columbus, Ohio and their independent contractor lawyers offer free and confidential consultations. Contact an independent contractor lawyer today, online or at 614-610-9755.