Employee Misclassification Attorneys in Dayton, Ohio

The rise of ridesharing companies and food delivery services has brought the issue of worker misclassification to the forefront. Are these drivers independent contractors or employees of the firm that pays them?

Each state and municipality is addressing the issue in its own way, but for the average worker, if an employer offers you a job and then designates you as an independent contractor, that robs you of the many employee rights guaranteed by state and federal law. The employer could face investigation and legal action. Both employers and employees need to understand the standards for what constitutes an employee and what constitutes an independent contractor.

If you’re a worker who feels you’ve been misclassified, or if you’re an employer who is trying to properly classify people who provide services for you, rely on Duwel Law if you’re in or around Dayton, Ohio, or anywhere in the counties of Miami, Greene, Montgomery, Drake, or Warren. Our attorneys have decades of experience in helping both employers and employees understand and respect employment law in a fair and impartial way.

Why Proper Classification Is Important

Classifying an employee as an independent contractor allows the employer to avoid paying taxes on the individual and alleviates them of the burden of providing benefits. In other words, it saves money.

On the other side, the employee – who may even be punching a time clock – must come up with the taxes while being cheated out of available benefits, whether for healthcare, vacation, or even sick days. Independent contractors also do not qualify for workers’ compensation should they become sick or injured at work, nor do they qualify for unemployment benefits.

The state and federal governments are also cheated because income taxes are not withheld. Social Security, unemployment insurance, and Medicare taxes are also not paid.

Employee vs. Independent Contractor

The U.S. Department of Labor (DOL) and its Wage and Hour Division (WHD) provide clear guidelines on the distinction between an independent contractor and an employee. An independent contractor, for instance, is someone who runs their own business, sets their own schedule, maintains their own tools of the trade, often works with multiple clients, and moves on when the job is finished. In short, they are their own boss negotiating with others on an often temporary basis for work.

An employee, in contrast, uses the employer’s tools and equipment, works according to the employer’s schedule, follows the employer's work requirements and directions, and is paid hourly or by salary.

Ohio law conforms with federal law when it comes to the definition of an employee. Ohio Rev. Code Ann. § 4141.01(B)(1) defines employment as "service performed by an individual for remuneration under any contract of hire, written or oral, express or implied . . . unless it is shown to the satisfaction of the director that such individual has been and will continue to be free from direction or control over the performance of such service, both under a contract of service and in fact.”

The key terms are “direction” and “control.” If the employer directs and controls someone in the performance of their duty, that person is an employee. If the person providing services to an employer is free of that direction and control, then they are an independent contractor.

The Fair Labor Standards Act and Misclassification

The Fair Labor Standards Act (FLSA) establishes certain minimum wage and overtime requirements for non-exempt employees. If a misclassified employee is shorted either on minimum wage or overtime requirements, they can file a charge with the DOL, which enforces the FLSA.

The Wage and Hour Division may then step in to supervise proper payment, or the Secretary of Labor may bring a lawsuit that can result in the payment of back wages plus an equal amount in liquidated damages.

The secretary can also impose an injunction on the employer forbidding such actions in the future. If the DOL doesn’t sue, the employee can file a private lawsuit to seek back pay, liquidated damages, plus attorney’s fees and court costs.