While the definition of employment in Colorado law is broad and inclusive, it is not limited to the common-law relationship of master and servant (as used by the Internal Revenue Service).
The two main concepts used to determine the status of a worker are, as stated in Colorado law:
- Whether or not the individual is free from control and direction in the performance of the service, both under the contract for the performance of service and in fact.
- Whether or not the individual is customarily engaged in an independent trade, occupation, profession, or business related to the service performed.
Some examples of these circumstances may include any written agreements that are in existence, the day to day relationship between the worker and the company, the actual directions given, the use of tools, advertising, type or payments and a myriad of other everyday issues. Overall, it is the totality of circumstances that is the basis of the decision.
In determining whether a worker should be classified as an employee or an independent contractor, the Division considers factors outlined in Colorado Revised Statutes section 8-70-115 and any other relevant factors, as is consistent with recent Colorado cases including:
Industrial Claim Appeals Office v. Softrock Geological Services, Inc., 325 P.3d 560 (Colo. 2014)
Western Logistics, Inc. v. Industrial Claim Appeals Office, 325 P.3d 550 (Colo. 2014)
Long View Systems Corp. USA v. Industrial Claim Appeals Office, 197 P.3d 295 (Colo. App. 2008)
SZL, Inc. v. Industrial Claim Appeals Office, 254 P.3d 1180 (Colo. App. 2011)
An Advisory Opinion is available to employers seeking advice on proper classification of workers. If you would like to request an advisory opinion on whether you should classify individuals as employees or independent contractors, please complete the request form below and include a nonrefundable payment of $100 made payable to the Colorado Department of Labor and Employment.
Request Advisory Opinion
We are reaching out to Colorado's employer community to help Colorado businesses comply with UI laws and regulations. We are conducting outreach through education presentations to Colorado employers, employer representative groups and chambers of commerce.
Presentations cover topics including:
- Correct wage reporting
- How premiums and benefits are calculated
- Accurate premium payments
- Using online tools to manage unemployment premium accounts
- Proper classification of workers as employees or independent contractors and understanding the unemployment insurance appeal process.
To schedule a presentation contact UI Audits at 303-318-9100, Option 4