Tag Archives: Ohio

05.31.22
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The Ohio Supreme Court Just Made It Much Harder to Win a Misclassification Dispute

In the middle of the Bering Sea sit two islands, Little Diomede (U.S.) and Big Diomede (Russia). They sit less than three miles apart, but Big Diomede is 21 hours ahead. That’s because the International Date Line straddles the two. This would make scheduling play dates nearly impossible, but fortunately no one lives on Big Diomede. Little Diomede is home to about 115 brave (and very isolated) souls.

The Diomedes are a great example of being close but still so far away. The Ohio Supreme Court gave us another example in a worker misclassification dispute earlier this month. Ohio companies should pay close attention to this surprising — and bad — decision.

In this case, the Bureau of Workers’ Compensation (BWC) had determined that an underground-cable installation company had misclassified its workers as independent contractors rather than as employees.

The BWC looked back 5 years and handed the company a bill for $350,000 in back assessments for failing to pay into the workers compensation system. Companies pay into the system for employees, but not for contractors. The company appealed, arguing that under Ohio’s Right to Control Test, the installers were properly classified as contractors, meaning the back assessments were not warranted. The company provided evidence showing that the Right to Control factors tilted in favor of contractor status.

The Ohio Supreme Court reviewed the evidence and did not disagree with the company. You’d think, therefore, that they’d reverse the BWC decision, and the company would be relieved from paying the back assessments.

Nope.

The company was close, but oh so far from winning its appeal. That’s because the deck is stacked heavily against companies when it comes to challenging the BWC on worker classification determinations.

The Ohio Supreme Court ruled that, under Ohio law, so long as there is “some evidence” that could support the BWC’s conclusion, the BWC’s decision was untouchable. This is insane.

In every case involving a balancing test — like the Right to Control Test used here — there will be at least some evidence supporting employee status and some evidence supporting contractor status. The point of the test is to weight the competing factors and see which direction the scales tilt.

But according to this ruling, Ohio law grants the BWC an absurd level of deference. The decision appears to say that a court must accept the BWC’s conclusion, even if the scales tilt the other way, so long as there is “some evidence” to support the BWC’s findings.

For Ohio businesses using independent contractors, this ruling means trouble. The BWC is, of course, incentivized to find misclassification because it means more money for the state. After this ruling, companies appear to have little recourse for challenging the BWC, even when the BWC is wrong.

Ohio companies should immediately evaluate their misclassification risks. If a contractor gets hurt and brings a workers comp claim, the BWC will look for misclassification. If the BWC finds it, the BWC will not only grant workers comp coverage for the injured contractor, it will issue back assessments against the company for failing to pay into the workers comp system — with a look back of five years.

Back assessments can also be triggered by an audit.

Same for unemployment. An unemployment claim by a contractor can lead to the same result, with Ohio Job & Family Services making the misclassification call. Back assessments would issue in that scenario too for failing to pay into the unemployment fund.

This ruling goes against the whole point of having a balancing test. I might have expected this level of deference from California or New York, but not Ohio. This ruling was issued by a Republican-majority Supreme Court.

Like the Diomedes Islands, what appears close can be so far away. Your business might be able to show all the reasons why your contractors are properly classified, but it doesn’t even have to be a close call for you to lose. If BWC finds misclassification and there’s merely “some evidence “ to support its conclusion, you might as well be arguing your point in Russian, the language of all zero inhabitants of Big Diomede.

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© 2022 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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04.25.19
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Mixed Messages, Misclassification, and My Visit to Ohio E-Check: Just Another Day on My Way to the Office

Independent contractor misclassification e-check mixed messages

Yesterday I was at Ohio E-check. When they use their fancy vehicle emissions testing equipment, they ask you to get out of your car and wait in a small glass-walled waiting area. Inside there are two signs. The first says: “Ohio E-Check. No cell phones!”  The second says: “Ohio E-Check. How are we doing? To comment, use this QR code.”

Regrettably, I complied with the first sign, so I do not have a picture for you of the two signs. (While waiting, I tried like hell to memorize that QR code!)

When waiting for E-Check, mixed messages are funny. When retaining independent contractors, however, mixed messages are no joke. If enough signs suggest that a contractor is really an employee, the risk of a misclassification finding is heightened, and the consequences of misclassification can be severe.

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02.25.19
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Joint Employment Update: Ohio Law Throws Franchisors a Bone, But It’s Not Entirely Delicious

This is Zippy enjoying a delicious treat.

When I throw my dog a bone, she is so happy. She goes and gets it, eats it, and wonders why she is unable to speak to express her gratitude. She doesn’t wonder, “Why is he throwing me a mere bone instead of an entire squirrel?” The bone is enough for complete contentment.

Ohio lawmakers have thrown franchisors a bone. They’ve limited the circumstances when franchisors can be held jointly liable if individual franchise owners commit certain Ohio employment law violations.

Under the new law, franchisors are not jointly liable for minimum wage, overtime, or pay frequency violations by franchise owners and are not jointly responsible for franchise owners’ responsibilities under unemployment insurance and workers’ compensation law — unless: Continue reading →

08.09.18
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Can Independent Contractors Sue for Employment Discrimination?

diaper independent contractor discrimination

The answer brings to mind the one must-have item for the thousands of crazies who spend 12 hours in Times Square waiting for the ball to drop every New Years’ Eve with no available public restrooms:

Depends.

Under federal anti-discrimination law, an individual generally needs to be an employee to bring an employment discrimination claim. Laws like the Age Discrimination in Employment Act (ADEA) and Title VII of the 1964 Civil Rights Act require employment status to file a lawsuit. Race discrimination claims, on the other hand, can potentially be brought under a different statute.

State laws, however, vary. Some states permit independent contractors to bring “employment discrimination” lawsuits; other states do not.

A recent decision by the Washington Supreme Court serves as a reminder that in the Great Northwest (home of Mount St. Helens and Blaine Peace Arch Park [which I visited  last month and got to run around and around the obselisk that marked the international border]), an independent contractor can bring a state law claim for discrimination “for the making or performance of a contract for personal services.”

The Pennsylvania Human Relations Act also prohibits discrimination against independent contractors.

On the flip side, state anti-discrimination laws in Ohio and Florida protect only employees, not independent contractors.

To determine whether independent contractors are protected under anti-discrimination laws, the answer truly is: It depends.  It depends on the type of alleged discrimination and depends on the state whether the alleged discrimination occurred.

None of this is to say that companies in states like Ohio or Florida should discriminate against contractors. In fact, where facts of any individual case are particularly egregious, common law claims might be recognized by courts uncomfortable with the idea that there is no remedy, even if the state’s anti-discrimination statute does not permit the claim. Although I live on the defense side, I still say: Do the right thing.

And if you should ever find yourself in Times Square on New Years’ Eve, passing the hours until the ball drops, I say this: Bring your adult undergarments. There’s no place to pee.

© 2018 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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07.16.18
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We’re Blogging about Logging! (I know, lame headline, but true)

Logger Ohio workers compensation independent contractor

The lyrics, “Come fly with me, come fly, come fly away” are instantly associated with Frank Sinatra (although, troublingly, the Michael Buble version appeared higher in my google search for a link to the lyrics). It is a little known fact* that the original version of the song was an ode to woodsmen and forestry workers and went something like this: “Come log with me, come log, come log away.”

In the original* lyric, Ol’ Blue Eyes invites a fellow logger to chop wood with him — not for him. That same distinction (with, not for) made all the difference in a recent court decision denying workers compensation benefits to a logger.

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