A divided Ohio Supreme Court on Tuesday ruled that a cable installation provider misclassified its workers as independent contractors.
Ugicom Enterprises Inc. agrees with Time Warner Cable to provide cable installation for its customers, according to Stat ex rel. Ugicom Enterprises Inc., filed in Columbus.
Ugicom uses installers they appoint as independent contractors, many acting as sole proprietorships or one-member LLCs. Some also choose to obtain their own compensation for employees and furnish their own trucks, tools and equipment. TWC or Ugicom provides the cable as well as certain other materials, including connection boxes. Ugicom provides no employment-related benefits and holds no taxes.
In May 2009, the Bureau of Workers̵
7; Compensation examined Ugicom and found that the company underreported salaries because the installers were employed, and issued an invoice to Ugicom indicating an outstanding balance of $ 346,817.55.Ugicom protested, but the BWC’s adjudication committee upheld the auditor’s results, as did BWC’s administrators. BWC continued to audit Ugicom in subsequent years and issued an invoice in September 2012 for $ 471,369.95.
Ugicom sought relief, and the Ohio 10th District Court of Appeals issued a writ of summons urging the BWC to revoke the designated order, reconsider the case, and apply the rights test to determine the status of the installers. The Court of Appeals for the 10th District of Ohio recommended that a lawsuit be denied.
Ohio Supreme Court ruled that employment status was determined by a “right to control test” and that there was some evidence “that the installers were not independent of Ugicom.”
Ugicom also had an ongoing relationship with the installers, who had each agreed not to provide services to any competitor, the court wrote, adding that BWC did not abuse its discretion when determining that the installers were Ugicom’s employees.
Two judges disagreed, arguing that work at the installation sites was related to Ugicom’s regular business, but it was a management company that engaged in vacancies, adding that the installers’ ability to decline jobs was “a powerful indicator of a lack of control over Ugicom “, and there was generally” a lack of Ugicom monitoring of the work performed by the installers. “
WorkCompCentral is a sister magazine to Business Insurance. More stories here.
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