EMPLOYEE V. INDEPENDENT CONTRACTOR - NEW PENALTIES FOR EMPLOYERS

Colorado employers have additional incentive to correctly classify their workers. House Bill 09-1310, effective June 2, 2009, authorizes the Colorado Department of Labor and Employment to investigate complaints about employers misclassifying employees as independent contractors, and permits the imposition of fines and penalties on employers found to have misclassified employees with willful disregard for the law. An employer may be fined up to $5,000 per misclassified employee for the first misclassification with willful disregard. In the event of a subsequent misclassification, the employer is subject to a fine of up to $25,000 per misclassified employee with willful disregard and to being barred from state contracts for up to two years.

The new law also establishes a framework for employers to obtain a nonbinding advisory opinion concerning whether to classify an individual as an employee for purposes of the Colorado Employment Security Act.

Post By Brent W. Houston, Esq.