Ohio Independent Contractor Law and Healthcare Staffing
Healthcare facilities use various staffing solutions to correct short-staffing during nursing shortages. One option is to hire independent contractor nurses, classified as 1099 workers for tax purposes. This allows healthcare employers to quickly fill shifts while avoiding upfront employment expenses — but it may come with increased liability risks for your facility.
Ohio independent contractor law protects workers from employer control based on the understanding that their work is performed independently. So, while they may agree to provide a product or service to a company, the manner in which they do so is not directed or controlled by the company. As an example, if your facility contracts with an electrician to install additional lighting, the contractor is obligated to deliver the lighting, but is not a supervised employee of yours while doing so.
Unlike electrical work, nursing is a profession that requires your facility to supervise and control your nursing staff, employee and contractor alike, to ensure the safe, effective, and compliant delivery of healthcare. Because of this, the use of 1099 nurses opens up greater risk that your facility could face liability for misclassifying a worker as a contractor instead of an employee. Here’s a look at how worker classification laws in Ohio could affect your facility.
Ohio Independent Contractor Law at a Glance
Ohio has specific laws and regulations in place to protect workers from being misclassified as independent contractors. Misclassification can have significant implications for workers’ rights and the obligations of facilities toward their workers. Here’s an overview of Ohio independent contractor law, and related laws, and how they might apply to your workforce.
| Ohio Independent Contractor Laws | |
|---|---|
| Statutes and Authorities | Ohio Constitution:
Ohio Revised Code:
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| Key Definitions and Tests | Ohio uses different definitions of “employee” when determining misclassification issues related to employee wages/rights, worker’s compensation, unemployment compensation, and taxation.
Employee Wages/Rights For matters relating to minimum age, overtime, and rights under the Fair Labor Standards Act, the Ohio State Constitution incorporates the definitions of “employee” and “independent contractor” used in the FLSA. The state also uses the Economic Reality Test to classify workers, which looks to key factors such as the:
Worker’s Compensation A worker is an employee if the employer reserves the right to control the manner or means of how the work is to be performed. In determining an employer’s right to control the work, agencies and courts will look to:
Unemployment Compensation A worker is generally presumed to be an employee, unless it can be shown that they are free from the direction and control of the employer, both in contract and in fact. There are 20 different factors that are analyzed to determine the level of direction or control, some of which include:
Taxes In determining an employee relationship for state tax purposes, Ohio uses the common law test used by the Internal Revenue Service (IRS), which looks at a combination of factors to determine the level of behavioral control and financial control that the employer has over the worker, and the overall relationship between the two. These factors would include such things as the level of instructions and training given to a worker, the level of investment and unreimbursed business expenses incurred by the worker, and the level of benefits and permanency of the relationship. |
Independent Contractor vs. Employee: Ohio Rules and Regulations
Nurses who are independent contractors, but who meet the criteria of an employee, are entitled to various labor rights and protections. Healthcare employers must be clear about a nursing professional’s employment classification not just at the time of hire, but also when they’re performing their work in order to avoid liability for employee misclassification.
Ohio uses common law principles and specific statutory definitions to determine if a worker is an employee or independent contractor. It does so by aligning its criteria with those established in the IRS’s 20-point checklist. This helps determine the level of control an employer has over a worker.
Rather than using a single checklist, Ohio 1099 laws rely on multiple tests for different purposes,including the Ohio Independent Contractor Test. Determining the classification of a worker is vital for things such as worker’s compensation, unemployment compensation, and taxes.
In some cases,Ohio independent contractor policy states that workers are presumed to be employees until proven otherwise. Healthcare employers should consider this when employing temporary 1099 nursing staff. Would you be able to prove a nurse is fully independent of your healthcare facility if a misclassification claim was made?
How Ohio Independent Contractor Law Impacts Healthcare Facilities
A key factor in determining worker classification is the level of control an employer has over a worker. Ohio contractor laws take such factors into account as the degree of supervision, control, and autonomy in making this determination. Certain aspects of a nurse’s duties could make it difficult to classify them as independent contractors. Here are just a few examples of control that a facility would need to exercise over a 1099 nurse:
- Independence — A nurse cannot be fully independent when performing their work as their licensing often requires that they work under the supervisory control of other nurses or providers.
- Instructions — A nurse is required to comply with a healthcare facility’s policies, procedures, and other directions from healthcare leaders.
- Hours worked — A healthcare facility may set a nurse’s schedule or working hours and break times.
- Directions — Nurses require on-the-job training to ensure compliance with facility policies and nursing practices.
- A contractual independent contractor agreement —Ohio law states that the existence of a written contract specifying the nurse’s independent contractor status is not a determining factor. Agencies and courts will look to how the nurse actually performs their work when making a classification determination.
Want to Minimize Your Liability When Staffing?
Facing liability for employee misclassification, or even a time-consuming audit of your books due to your use of 1099 nursing professionals can be a drain on your resources and your staff. Thankfully, you can minimize your risk of violating Ohio independent contractor law by working with W2 temporary and full-time nursing staff.
Legal Disclaimer: This article contains general legal information, but it is not intended to constitute professional legal advice for any particular situation and should not be relied on as professional legal advice. Any references to the law may not be current, as laws regularly change through updates in legislation, regulation, and case law at the federal and state level. Nothing in this article should be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed to practice in your jurisdiction.