On Tuesday, May 25, 2010, Representatives Phillips and Driehaus introduced in the Ohio General Assembly a bill that effectively would create a single definition of “employee” for purposes of Ohio workers’ compensation, unemployment compensation, payroll taxes, minimum wage and other purposes. Presently, each statute contains its own test for determining whether an individual is an employee or an independent contractor, often resulting in conflicting results.

If passed, this legislation would create a single seven-factor test for evaluation whether an individual truly is an independent contractor.

For an individual to be an independent contractor under H.B. 523, all of the following factors would have to be met:

  1. The individual has been and continues to be free from control and direction in connection with the performance of the service.
  2. The individual customarily is engaged in an independently established trade, occupation, profession, or business of the same nature of the trade, occupation, profession, or business involved in the service performed.
  3. The individual is a separate and distinct business entity from the entity for which the service is being performed or, if the individual is providing construction services and is a sole proprietorship or partnership, the individual is a legitimate sole proprietorship or a partner in a legitimate partnership.
  4. The individual incurs the main expenses and has continuing or recurring business liabilities related to the service performed.
  5. The individual is liable for breach of contract for failure to complete the service.
  6. An agreement, written or oral, express or implied, exists describing the service to be performed, the payment the individual will receive for performance of the service, and the time frame for completion of the service.
  7. The service performed by the individual is outside of the usual course of business of the employer.


Continue Reading Ohio H.B. 523 Would Unify Definition of Employee, Make it Easier to Find Misclassification