When hiring workers for your business, it is essential that you classify them correctly. Incorrectly classifying an employee as an independent contractor, for example, can cause serious issues for your business. The financial implications of making the wrong choice could be dire.
According to the Ohio Department of Job and Family Services, the general rule is that an independent contractor has more control over his or her work than an employee. Even with this rule in mind, it can still be tricky to make the final call. There are a few key details that can help you ensure you classify your workers correctly.
Workday oversight
An employee will generally have set work hours and follow a schedule whereas ICs usually make their own schedule. You will probably not give directions to an IC beyond telling them the work he or she needs to complete. You do not have control over when he or she works during the day. You can give a deadline, though. In general, the daily oversight of an IC is less strict than that of an employee.
Tools and materials
In most cases, an IC will supply his or her own tools and materials to do the job. You will usually supply these items for an employee. The IC is operating his or her own business, which means you will not have to supply much, even though you can certainly provide items if you like.
It is important to understand that an IC is not part of your business. He or she is someone you hire to do a specific job. An employee is part of your business. This distinction can help you to make your final ruling on the worker classification.