Running a business comes with many responsibilities, and one of those is protecting your employees in case something goes wrong. Even if you operate a one-person shop or freelance remotely, some states require coverage. Wondering if you need to get workers’ compensation? 


Workers’ Compensation Even for One Employee

In Ohio, the requirement begins with one employee, according to the Ohio Bureau of Workers’ Compensation (BWC). (However, you don’t count as your own employee.) This applies to the majority of small businesses. Ohio law requires workers’ compensation to protect employees and business owners. You can’t foresee everything in a business plan, such as a workplace injury or occupational disease.


What if You Have No Employees?

Starting out, depending on your specific business type, you might have zero employees. Ohio makes workers’ comp an elective in this scenario. They define an employee as:

  • An worker with a hiring contract within the state lines of Ohio.
  • An worker whose principal office is in Ohio.

If you forego coverage and then get injured while working, you may be out of luck when it comes to medical bills or lost work days. 

If you have no employees and elect to get coverage, it is in addition to your current policy. You can apply using the Application for Ohio Workers’ Compensation Coverage (U-3) and submit it online. Don’t forget to display your written notice, which is required for private and public employers.

In Ohio, because independent contractors are not considered employees, they are not eligible for workers’ compensation benefits. However, if you manage an independent contractor, and regularly control their performance, this freelancer or subcontractor is now considered your employee and requires your coverage.


Out-of-State Work

If you temporarily work out-of-state but usually reside in Ohio, you could be covered. Ohio’s workers’ compensation law covers Ohio employees with extraterritorial coverage for injuries that occur outside of Ohio. Each state has its coverage requirements for worker’s compensation, and some states will require coverage for any brief work within its borders. Out-of-state employers can hire non-Ohio employees for 90 days consecutively before requiring workers comp.


Other States’ Coverage

Are you routinely sending your employees over state lines for work-related business? The BWC’s Other States Coverage option is an optional policy that helps cover any potential gaps and protects you from having legal trouble including stop work orders in other states.  Apply for the Other States Coverage through BWC’s website.


Maintaining True-Up Reports

Employers must pay workers’ compensation premiums from their first day of hire. Premiums are determined based upon business size, and the amount of payroll reported multiplied by a specified rate. For new employers, they will use your 12-month payroll estimate that you submitted when you established your premium. If your true-up report exceeds your estimate, you’ll end up owing on the premium.

To use the BWC online payroll true-up service, follow these simple steps:

  1. Log in to the Ohio BWC website
  2. On the My Policy page, click on Payroll True-Up (you can also find it in the main drop-down menu)
  3. On the next page, click the drop-down to select the policy period. Click next.
  4. Enter your actual payroll into the table for each code, and click next.
  5. The system will calculate totals for you, and it displays the “net transaction amount” and “amount due today” if you owe additional premium.
  6. If you owe, you will be given an option to pay in full, another amount, or submit without payment.
  7. If you submit without payment, you will need to print out the confirmation and mail it to BWC.
  8. Print the Payroll true-up report confirmation receipt for your records.


Plan for the Future

Even if you don’t think you need coverage right now, your business may grow. Plan ahead now. Over time you earn a better rate with providers by establishing a good history with few claims. When you hire personnel, get insured sooner than later. The BWC is a one-stop shop for workers comp in Ohio. In other states, private companies like Travelers, Liberty Mutual, and The Hartford, may work for you.

You don’t have to go it alone. Hire an accountant for help with payroll services, maintaining reports, and more. Hiring your first employee(s) is a strong indicator that you need a certified public accountant to help keep your business  organized and and compliant.


PHOTO: Wikimedia Commons / Public Domain