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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, they’ll also ask for payroll records on any 1099 employees – and trust us, they’ll have questions. If an employer can’t prove that they don’t control the work being performed, you may end up paying those premiums retroactively. Even if the contractor has provided the employer with a certificate of coverage, it may not amount to much if they didn’t elect coverage properly. Only LLCs filing as S- or C-corps are automatically covered once the policy is issued. Sole proprietorships and partnerships have to take an extra step and elect coverage for themselves. The new and improved BWC application for coverage now explains this caveat in more detail, but that doesn’t help anyone who applied for coverage before 2022.

You can view Ohio BWC’s guidelines on contract laborers here, and there’s even an employer questionnaire here.

Posted By Brandy King in Ohio Bwc, Ohio Workers Comp, True Up, Independent Contractors, 1099, Payroll

Most Recent

DOL Issues Final Rule on Independent Contractors

Posted By Brandy King
January 17, 2024 Category: DOL, Independent Contractors, Ohio Bwc, Workers' Comp

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

A Guide to Submitting 2023 OSHA Logs

Posted By Brandy King
January 17, 2024 Category: OSHA, Electronic Recordkeeping, Form 301, Form 300, OSHA 300A, Safety, Incident Reporting, Compliance

It’s time to post and electronically submit your OSHA logs - and this year, submission requirements will impact far more U.S. employers. We discussed this in detail when the rule was finalized in July 2023. Effective January 1, 2024, OSHA will require employers with over 100 employees in certain high hazard industries to complete electronic records submissions of Forms 300 and 301, in addition to Form 300A. These are records that covered employers should already be keeping, but previously have not been required to submit. The impacted industries include (but aren’t limited to) retail, wholesale, performing arts, manufacturing, farming, and grocers. Our safety team agrees that the fastest, easiest way to find out your company’s submission requirements is to use this ITA Coverage Application. Enter your company’s NAICS code and employee count, and it will confirm which logs should be submitted. As a general guide: 20-249 employees and on this list must submit 300A 100 or more employees and on this list must submit the 300A, 301 and 300 log. Employee count is “per establishment,” not entire corporation size. So, what is OSHA’s definition of an “establishment?” An establishment is a single physical location where business is conducted, or where services or industrial operations are performed. For activities where employees do not work at a single physical location - such as construction, transportation, communication

Grading Payroll Providers on Enrollment and W-2 Performance

Posted By Brandy King
January 17, 2024 Category: Payroll, Overcharging, Additional Fees, Surety HR, SI PEO, Payroll Processing Fees, ADP Fees, Paychex Fees

With 2023 group health enrollments behind us, and W-2 season wrapping up – most employers have a strong opinion about the role their payroll provider played in both of those, good or bad. Let’s consider open enrollment first. If your payroll provider utilizes an electronic benefits module, and made an implementation plan with your broker – things should have gone smoothly. Benefits enrollment is always subject to hitting snags throughout the process. Here are some things to consider: • Was there communication between all parties if a timeline changed? • Was everyone pulling in the same direction, without making you (the employer) an unnecessary go-between? • Was every party involved invested in making sure things were done right the first time? • Have you considered an API connection or Data Bridge with your Carrier? (Fees may apply) It’s important not to over- or under-rely on technology. Let the electronic benefits modules do their job, but make sure you and your payroll provider have your eyes peeled for potential issues. W-2 season brings similar headaches. If the employer has done their best to ensure that all employee info is up-to-date and accurate, the prevention and resolution of those headaches’ rests heavily on your payroll provider. If employees have questions about W-2s, or there’s a potentia

Blog

Should We Cover Independent Contractors for Workers' Comp?

DOL Issues Final Rule on Independent Contractors

A Guide to Submitting 2023 OSHA Logs

Grading Payroll Providers on Enrollment and W-2 Performance

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