Who Needs Workers’ Compensation Coverage?
A person hired to perform services for pay is presumed by law to be an employee. All businesses with employees operating in Colorado are required to have workers’ compensation insurance, regardless of the number of employees, whether the employees only work part-time or if they are members of the same family.
Help Us Protect Colorado Businesses
It’s essential that employers who need coverage have the right coverage. You are encouraged to review the resources below to verify proper coverage or rejection of coverage. If you cannot verify that the business is in compliance, you can reach out to the business directly or you can report the business via the CDLE Tip and Lead Form. If you have questions, please contact the Division at 303-318-8700 or cdle_wccustomer_service@state.co.us.
Independent Contractors
Workers are presumed to be employees unless proven otherwise.
To prove that someone is an independent contractor and not an employee, the worker must:
- Be free from direction and control in the performance of the work.
- Have an independent business doing that specific type of work.
Simply calling someone an independent contractor or giving them a 1099 does not make them an independent contractor. Even a contract does not determine if someone is an independent contractor or employee. The actual working conditions are what matter. Determining whether someone is an independent contractor or employee is a balancing test that looks at all the factors in the working relationship.
Learn More About Independent Contractors
Construction
If the business is in the construction industry, special requirements apply. Every person performing construction work on a construction site must be covered by workers’ compensation insurance.
If the business uses contractors to perform construction work it must do one of the following:
- Provide workers’ compensation coverage for their contractors.
- Obtain proof of coverage from their contractors.
Rejection of Coverage
Corporations and LLCs
Officers of corporations and members of Limited Liability Companies (LLCs) are considered by law to be employees of the corporation or LLC. Because they are employees, corporate officers and LLC members must be covered by workers’ compensation insurance unless they choose to reject coverage for themselves. In order to reject coverage, the corporate officer or LLC member must have at least a ten percent ownership interest in the corporation or LLC.
If the corporation or LLC has employees, in addition to corporate officers or LLC members, it must carry a workers’ compensation policy. If the corporation or LLC does not have employees, aside from the corporate officers or LLC members, it must file a Rejection of Coverage by Corporate Officers or Members of a Limited Liability Company form (WC 43) with the Division.
Construction Industry
If the business is a construction company, even if the business is a sole proprietorship or a partnership, the business must either have workers’ compensation insurance for itself or reject that coverage.
If the business already has workers’ compensation insurance and would like to reject coverage, the business should talk with their insurance agent or carrier to learn more about the forms the insurance company requires.
If the business does not have any other employees, the business needs to fill out a Rejection of Coverage By Partners and Sole Proprietors Performing Construction Work on Construction Sites form (WC 45) and send it to the Division.
*However, if the business is a construction corporation or an LLC without other employees, the business needs to fill out a Rejection of Coverage by Corporate Officers or Members of a Limited Liability Company form (WC 43) and send it into the Division.
Additional Resources
Contact Us
Division of Workers' Compensation
633 17th Street, Suite 400
Denver, CO 80202
303-318-8700
1-888-390-7936 (Toll-Free)
cdle_wccustomer_service@state.co.us