Employee vs. Independent Contractor

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 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.

The services of an individual that is determined to be an independent contractor (under contract to perform a special service for an employer) are excluded from covered employment. To be excluded employment, it must be established by the employer that the contractor is free from direction or control over the service being performed.

There are 20 questions used to help identify whether or not an employer-employee relationship exists. It helps the Ohio Department of Job and Family Services (ODJFS) decide whether an employer must pay unemployment insurance taxes.

1. Who directs or controls the manner or method by which instructions are given to any individual(s) doing the services?
2. What training is required for the person doing the services?
3. How are the services given and merged into the regular functions of the employer?
4. By whom does the business require that services be provided?
5. Who hires, supervises and/or pays the individual(s) performing services?
6. Who decides when services are done and whether the work continues or recurs, even if not full-time?
7. Who sets the time (hours) during which the individual(s) services are to be performed?
8. How much time does the business need the individual(s) doing services to devote to the business?
9. Where does the business require that work be done?
10. Who sets the order of work the individual(s) follow while doing services for the business?
11. What type of reports, oral or written, does the business require the individual(s) to submit when doing services?
12. How are the individual(s) doing services paid?
13. Who pays expenses for the individual(s) doing services?
14. Who furnishes the tools and materials used by the individual(s) doing services?
15. What investment do the individual(s) doing services have in the facilities where the services are done?
16. What is the profit or loss to the individual(s) doing services as a result of doing such services?
17. Do the individual(s) doing services also do similar services for other businesses? If yes, for whom?
18. How do the individual(s) doing services make their services available to the general public?
19. Does the business have the right to discharge the individual(s) doing services? If, yes, in what manner?
20. Do the individual(s) doing services each have the right to end the relationship with the business, without incurring liability due to an employment contract or agreement? If yes, how?

A written contract that claims to create a relationship of principal and independent contractor is not controlling if the practice of the parties shows that the principal retains the right to exercise direction or control under the common law test.

For more info, contact the Compliance Section at 614-466-2319.