News and Updates
Category: Independent Contractors
DOL Issues Final Rule on Independent Contractors
Who’s Really an Independent Contractor? DOL Finalizes New Rule Clarifying Classification Earlier this month, the U.S. Department of Labor (DOL) finalized its rules regarding classification of independent contractors. The organization hadn’t previously defined this by regulations, only by guidelines (which are as clear as OSHA “best practices”). The updated rule creates a six-factor “economic realities” test to determine whether or not a worker is truly an independent contractor under the Fair Labor Standards Act (FLSA). Among others, the test includes factors such as degree of permanence, amount of control the employer holds, and the worker’s skills. Since Ohio employers aren’t required to cover 1099 employees under their BWC policy, we have a lot of discussions with clients about whether or not a worker actually meets the qualifications of being an independent contractor. Understanding these qualifications is not only important for insurance purposes, but also for recordkeeping, and the application of minimum wage and overtime rules. Our friends at Roetzel & Andress have done a great job of explaining this new classification rule in a way that’s easy to digest and understand, so we’re deferring to their recent update for the details. For more info on how independent contractors can impact your Ohio BWC policy, check out this blog. This goes into effect March 11
Should We Cover Independent Contractors for Workers' Comp?
Don’t let the 1099 fool you. Just because your company doesn’t send these workers a W-2 doesn’t mean you shouldn’t cover them for workers’ compensation in Ohio. You may be thinking, “We’re not concerned – all of our 1099ers have a certificate of coverage from BWC.” Ok, so they knew that they had to manually elect coverage for themselves if they’re an LLC filing as a sole corp right? It can be more complicated than it appears on the surface, but we’re here to help you get a handle on it. Keep in mind this is not legal advice. If you have specific situations about classifying workers, you can always reach out to us, but sometimes it’s best to follow up with an employment attorney. Navigating the world of gig workers can be tricky, but just ask Ugicom – it’s best to classify workers correctly from the beginning. A lot of employers will casually mention that they don’t have to cover certain workers as employees for workers’ comp, because these people are independent contractors. Unless they come and go as they please with no schedule parameters, don’t utilize company vehicles or other property, and you have no say in the work they perform - they may in fact be independent contractors. If you can’t confidently tick all of those boxes, it may be time to reevaluate. When Ohio BWC performs a payroll audit, the
