Worker Classification

While the definition of employment in Colorado law is broad and inclusive, it is not the same as the Internal Revenue Service.

According to Colorado law, the two main concepts used to determine the status of a worker and whether they are an employee (W-2) or a contractor (1099) are:

  • 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.

The more freedom an individual has to perform the job and the more they do similar work for other businesses, the more likely they are to be considered a contractor.

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.

Posted in Colorado