Ohio Workers Compensation Rebate for Leased Employees

Ohio Workers Compensation Rebate and Leased Employees

Ohio allows employers to earn a rebate on workers compensation premiums when their experience modification rate falls below 1.0. For companies using leased employees, the rebate can be affected by how the lease is structured, who controls the workers, and which entity is rated on the policy. The Ohio Bureau of Workers Compensation (BWC) treats leased workers differently depending on the arrangement, and understanding that distinction matters for premium refunds.

How Leased Employees Affect the Experience Rating

In Ohio, leased employees are typically included in the experience rating of the lessee (the employer that directs the day-to-day work) rather than the lessor (the leasing company). This means claims filed by leased workers count toward the lessee's modification rate and, by extension, any rebate they might earn. If the leasing company also carries a policy, the arrangement can create overlap or confusion about which employer of record receives the credit.

Who Qualifies for the Rebate

Ohio's BWC issues a rebate when an employer's experience mod drops below 1.0, returning a percentage of the premium paid. Leased employees factor into this calculation if the lessee is the rated employer. The key qualifiers are:

• The lessee must have contractual control over the leased workers' schedules, duties, and supervision.
• The lease agreement must clearly define the employer of record for workers compensation purposes.
• Claims experience for leased workers must be reported under the correct policy and employer identification number.

Common Pitfalls with Leased Arrangements

Employers often run into problems when multiple entities claim the same workers on their policies, or when the lessor includes leased employee claims on its own experience rating. This can lead to disputes, denied rebates, or dual premium charges. Ohio BWC reviews the actual working relationship, not just the contract label, so a lease that looks like staffing but operates like direct employment will likely be treated accordingly.

Steps to Protect the Rebate

Employers using leased staff in Ohio should review their lease agreements to confirm the employer of record is clearly identified. They should also verify that the BWC policy number and experience rating account match the entity that controls the workers. Regular audits of payroll and classification codes for leased employees help prevent unexpected premium adjustments that erode the rebate.

What Ohio BWC Looks At

The bureau examines the degree of control over the worker, the method of payment, and who provides the tools and workplace. When the lessee exercises primary control, the leased employees are rated on the lessee's policy, and any rebate flows to that entity. When the lessor retains control, the lessor may be the rated employer instead.