Farm Management Update

Quarterly Publication of Ohio State University Extension

Fall 2003

Reporting Independent Contractors

Robert D. Fleming, District Specialist
Farm Management, Northwest District, Ohio State University Extension

Farm labor laws continue to evolve and become more consistent with non-farm labor requirements. Managing farm labor effectively requires following current regulations. Since October 1, 1997, all Ohio employers including farmers have been required to report all newly hired, re-hired, or returning to work employees within 20 days of hire or rehire date. Now, recent changes in Ohio law also require employers to report some independent contractors to the Ohio New Hire Reporting Center.

The following are some common questions/answers from the Ohio New Hire Reporting Center:

1. What is the new law that requires independent contractors to be reported as new hires?

   The statute defining who must be reported as a new hire has changed. The new definition requires that Independent Contractors must also be reported as new hires. Pursuant to section 3121.891 of the Ohio Revised Code, employers are obligated to report all employees who reside or work in the state of Ohio. Ohio Revised Code, section 3121.89 defines an "employee" as "an individual who is employed to provide services to compensation to an employer and includes an individual who provides services to an employer under a contract as an independent contractor and who is an individual, the sole shareholder of a corporation, or the sole member of a limited liability company."

2. When did this change occur?

   This law is now in effect. You should begin independent contractors as soon as possible.

3. Do I need to report all independent contractors, both individuals and companies, which I use?

   ORS Section 3121.891 defines an independent contractor for new hire reporting purposes as outlined in question 1. Companies should only be reported if they meet these requirements.

4. How should I report an independent contractor?

   Employers may report new hires via one of the manual methods listed below:

   New Hire Form

   • A printed list
   • A copy of the employee's W-4 form with employer information, employee date of birth, date of hire, and work state added.
   • A copy of the independent contractor's W-9 form with the independent contractor's social security number, date of birth, date of hire, and work state, as well as employer information added.

   When reporting an independent contractor, please be sure to indicate their status as a contractor on your submission.

   Independent contractors can be reported either electronically or manually. Request or print the current New Hire Form, brochure, and more information from:

   Ohio New Hire Reporting Center
   P.O. Box 15309
   Columbus, OH 43215-0309
   http://www.oh-newhire.com
   Fax: 1-888-872-1611
   Phone: 1-888-872-1490
   Or 1-614-221-5330

5. What information should I report for an independent contractor?

   Ohio Revised Code Section 3121.892 requires the following information to be reported for both employees and independent contractors:

   • Employee name, address, date of birth, social security number, date of hire, rehire, or return to work, and state of hire, and
   • Employer name, address, and federal employer identification number.

6. I do not have a social security number for the independent contractor I am reporting. Can I use their federal employer identification number instead?

   No, ORC section 3121.892 and OAC 5101:1-30-12 require that the social security number be reported.

7. What are the potential penalties for non-compliance?

   An employer who fails to make a new hire report can be fined up to $25.00 for each failure to report. If the failure to make a report is the result of a conspiracy between the employer and the employee not to report or to supply false or incomplete information, the fine can be up to $500.00 for each failure to report.

Summary

Human resource management is a skill that can be acquired by farm employers through education, experience, and commitment to the directing function of management. Following legal requirements is a part of that management effort. Progress toward your Mission Statement, goals, and objectives is enhanced by actions consistent with these functions.