An Ohio independent contractor agreement is a document that defines the relationship between a contractor and a client. It states that the contractor will provide specific services over a defined period or until a project is completed in exchange for compensation.
- Worker Classification: Common Law
- Tax Structure: Graduated-Rate Income Tax
- Definition: Ohio Revised Code § 3121.89
- At-Will Employment: Yes
Independent Contractor Definition
An independent contractor in Ohio is an individual who provides services to an employer for compensation that is reported as income other than wages.
On the other hand, an employee is a worker who is employed by an employer to provide services for compensation that is reported to the IRS as income from wages.
An independent contractor is a compensated worker who doesn’t meet the requirements of an employee according to the 20-factor common law test, which we explore below.
Worker Classification Test
Ohio utilizes the 20-factor, common-law right-to-control test to determine the existence of an employer-employee relationship.
The 20 factors considered in this test are:
- The level of instruction the worker receives from the employer
- The amount of company-provided training provided to the worker
- The worker’s degree of business integration
- The extent to which the worker can assign or outsource the provided services
- The existence of assistance provided to the worker by the employer
- The continuity of the worker-company relationship
- The flexibility of the worker’s schedule
- The demand of the company for full-time work
- The need for on-site services
- The requirement for work to be performed in a specific sequence
- The requirement for the worker to provide project reports
- The method of payment utilized
- The reimbursement of travel or business expenses
- The provision of materials and tools
- The worker’s investment in work facilities
- The worker’s realization of profit or loss
- The worker’s choice to work for multiple companies
- The worker’s choice to make their services available to the public
- The company’s control over the worker’s discharge
- The worker’s right of termination
Consideration of each factor and the situation as a whole can imply a worker is an employee or an independent contractor.
Rights and Responsibilities
Ohio work rights are generally based on an employee classification. Since independent contractors are, by definition, not employees, they lack most rights associated with employees.
For example, independent contractors in Ohio generally have no right to:
- Overtime pay
- Minimum wage regulations
- Retirement contributions
State Taxes
Ohio’s individual income tax is graduated, with rates between 2.765% and 3.99. [1] Some Ohio jurisdictions collect local taxes.
Additionally, independent contractors must pay federal self-employment taxes of 15.3%. [2]
Filing for Unemployment
Independent contractors generally cannot file for unemployment in Ohio (Ohio Revised Code § 4141.01).
Sample
Below, you can download our Ohio independent contractor agreement in PDF or Word format:
