Employee or Contractor?
Broadly speaking, anyone who works for an employer is an employee if the employer has the right to control what will be done and how it will be done. A person’s title does not matter, nor does the amount of time a person works for the company. Employment includes services performed by workers who are employees under the usual common law rules, employed as corporate officers or are specifically defined as employees in the law.
An employer-employee relationship exists when a person who hires an individual to perform services has the right to exercise control over the manner and means by which the individual performs his or her services. The right of control, whether or not it is exercised, is the most important factor in determining the relationship. The right to discharge a worker at will and without cause is strong evidence of the right to exercise direction and control.
Independent contractors may provide services for a company, but they operate their own businesses. The person hiring them does not control how they perform those services. Ohio law identifies 20 factors that can be used to help identify whether an employer-employee relationship exists. You can find them at
codes.ohio.gov/oac/4141-3-05. For more information, see
JFS 08075, “Employee or Independent Contractor,” or call (614) 466-2319.
Appeals, Audits and More
Appeals
If employers believe an unemployment tax determination was not in accordance with the law, they have 30 days from the date the determination was mailed to request an appeal. The appeal must be in writing, and it must state the reasons the employer believes the determination was incorrect. Appeal requests may be submitted online at unemployment.ohio.gov, by email to UITaxAppeals@jfs.ohio.gov, by fax to (614) 752-4952, or by mail to Unemployment Tax Appeals, P .O. Box 182830 Columbus, Ohio 43218-2830.
Audits
ORC Sections 4141.18 and 4141.20 require employers to maintain records and to give the Ohio Department of Job and Family Services the authority to audit those records. Audits are performed to verify reported payroll and exclusion information and to answer any questions you may have regarding unemployment law.
An audit usually covers one year unless issues are discovered that could affect other years. At a minimum, the auditor will review payroll records, W-2 forms, business year-end tax returns, 1099s issued by your business, and other taxing authority returns filed by the business. Other records may be required.
If you consider a worker to be a subcontractor or an independent contractor, the auditor must verify that these conditions exist. The auditor will base all decisions on legal and administrative guidelines and will explain any potential findings to you in the audit exit conference.
For more information, see JFS 08018, “Important Information about Unemployment Insurance Tax Audits,” or call (614) 466-2319.
SharedWork Ohio
SharedWork Ohio is a voluntary layoff aversion program. It allows workers to remain employed and employers to retain trained staff during times of reduced business activity. Under a SharedWork Ohio plan, the participating employer reduces affected employees’ hours in a uniform manner. The participating employee works the reduced hours each week, and the Ohio Department of Job and Family Services provides eligible individuals an unemployment benefit proportionate to their reduced hours.
Ohio employers may apply for a SharedWork Ohio plan if they have at least two affected employees who do not work on a seasonal, temporary or intermittent basis; if they are current on all unemployment taxes; and if they agree to the program requirements. For more information, call (866) 733-0025, option 3, or visit SharedWork Ohio.