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How do you decide whether to bring on a full-time employee versus hiring a contractor, and what implications can that decision have on your business?

Let’s start by acknowledging that the differences between full-time employees and contractors are significant, so they impact employers here in Ohio in far-reaching ways. By understanding the distinctions, you can steer clear of potentially costly legal consequences. Here’s a quick breakdown of each one.

Independent Contractors

Many small businesses rely on independent contractors for their staffing needs, whether it’s because they’re just starting out, or they want to ramp up during busy periods of the year. Roofing, painting, cleaning and landscaping businesses are good examples of this. For companies like these, using independent contractors over hiring employees provides several key benefits, including labor cost savings, reduced liability and greater flexibility when it comes to hiring and firing.

An independent contractor is different than an employee is a number of ways. Some of these include:

Employees

Despite the advantages that independent contractors offer, companies may find that it makes more sense to hire an employee. The key characteristics that set an employee apart from a contractor include:

Note that employees are covered under the Fair Labor Standards Act (FLSA) and are therefore entitled to Social Security, Medicare, the Family and Medical Leave Act or healthcare under the Affordable Care Act. Independent contractors are not entitled to these benefits.

Making the Right Choice is Essential

Employers take on significant risk when they classify an individual who performs services for them as an independent contractor instead of as an employee. If a court determines that a misclassification occurred with respect to a worker’s engagement with an employee, the potential legal consequences include unpaid overtime, unpaid taxes, un-provided benefits, and potentially a discrimination claim (or claims under other laws that protect employees but not contractors).

Specifically, if an independent contractor is discovered to meet the legal definition of an employee, the employer may be required to:

Guidelines

There is no single test for determining if an individual is an independent contractor or an employee under the FLSA. In making its own determinations, the IRS compares the degree of control exerted by a given company to the degree of independence retained by the individual. Specifically, the IRS considers this relationship in three distinct ways:

Behavioral: Does the company in question control – or have the right to control – what the worker does, and how the worker does his or her job?
Financial: Are the business aspects of the worker’s job controlled by the payer? (e.g., in what way the worker gets paid, whether expenses are reimbursed)?
Type of Relationship: Do written contracts or employee benefits (e.g., pension plan, insurance, vacation pay, etc.) exist? Also, will the working relationship continue over time, and is the work performed a key aspect of the business?

When attempting to answer these questions as they relate to a specific worker of yours, we believe it’s prudent to err on the side of caution. The risks associated with misclassification – both legal and financial – are just too high to take. Making the right call is a good decision for your business – and for our collective well-being.

Finally, a quick resource share: The Ohio Department of Jobs and Family Services offers 20 questions that can help you determine whether or not an employer-employee relationship exists. Read the questions here.

If you have questions regarding workers’ compensation, the attorneys at Nager, Romaine & Schneiberg Co., L.P.A. are here to help. In the event you are hurt at work, or terminated after reporting a workers' compensation injury, you need to seek immediate legal advice. Contact the Ohio workers’ compensation lawyers at NRS Injury Law by filling out our No-Risk Consultation form, or call (855)GOT-HURT and speak with one of our trained staff members.

If you become injured or sick on the job, workers’ compensation (WC) benefits can be of great benefit to you by helping you cover certain crucial and often large costs. Under Ohio WC regulations, you as an employee will get paid and have medical costs covered if you elect to receive WC benefits. In return, you give up the right to sue your employer over the injury or illness you incurred.

Nearly every employee in Ohio must be covered by a WC policy through the Ohio Bureau of Workers’ Compensation (BWC). That policy will cover a range of medical costs associated with an injury or illness, as well as wages for time off work due to the injury, and settlements for permanent disabilities caused by the injury.

So what medical costs does Ohio WC cover?

Provided that your claim is allowed, Ohio WC will cover medical treatment recommended by your doctor that is proper and necessary to treat your industrially related condition, as well as related costs that can help you return to your current job—or help you seek a new one, provided that your injury or illness prevents you from returning to that current job. That may include things such as:

Generally speaking, only widely accepted Western medical practices will be covered by WC in the state of Ohio. For alternative, experimental or investigative treatments or therapies, you may want to get an attorney's help to obtain coverage.

WC also pays out for things such as lost wages (i.e., time that you can’t work due to the injury or illness), temporary total disability, permanent partial disability, and permanent total disability.

No-Cost Evaluation

If you receive WC benefits for a job-related injury or illness, then you are giving up the right to sue your employer for compensation separately. Note that in some cases, you may actually receive greater compensation from a lawsuit than from the WC benefits. Before making any decision, you owe it to yourself and your loved ones to carefully consider all your options. An experienced WC attorney can help you chart the best path forward based on your specific circumstances and needs.

The workers’ compensation attorneys at Nager, Romaine & Schneiberg Co., L.P.A. are highly knowledgeable regarding the complexities of workers’ compensation law. We offer the personalized service that injury victims deserve.

In the event you or a loved one is injured at work, you need to seek immediate legal advice. Contact the Ohio personal injury attorneys at NRS Injury Law by filling out our No-Risk Consultation form, or call (855) GOT-HURT and speak with one of our trained staff members. Learn more about your workers’ compensation rights from the workers’ compensation resources listed below.

Workers’ compensation resources:

Ohio Bureau of Workers’ Compensation Handbook for Injured Employees

Ohio Bureau of Workers’ Compensation Injured Worker Questions and Answers

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