What Happens if I Am Misclassified as an Independent Contractor?

Navigating the complexities of employment classification can be daunting, particularly when you suspect you’ve been misclassified as an independent contractor. The stakes are high: misclassification can significantly impact your rights to employee benefits, legal protections, and fair compensation. If you’re in this situation, you may qualify for legal action against your employer. When facing misclassification as an independent contractor, don’t hesitate to reach out to a skilled Denver workers’ compensation lawyer who can help you secure your rights and assess your legal alternatives.

Who Is an Independent Contractor in Colorado?

In the United States, the Internal Revenue Service (IRS) employs traditional common law rules to determine employment status, focusing on behavioral, financial, and relational factors between a worker and employer. Colorado, however, takes a more expansive view.

According to Colorado law, a worker is generally presumed to be an employee unless proven otherwise. This presumption can be negated through a written contract that specifically outlines the nature of the employment relationship.

The two principal criteria under Colorado law are:

  • The degree of control and direction the employer has over the worker in the performance of the service.
  • Whether the individual is customarily engaged in an independent occupation, business, or professional service related to the work performed.

For example, consider a graphic designer who is contracted by a marketing firm. If the firm dictates the designer’s work hours, provides all the necessary software and tools, and involves itself in the nitty-gritty aspects of the design process, then under Colorado law, this individual is likely to be considered an employee.

However, if the designer retains control over his or her work hours, uses his or her own software and equipment, and has multiple clients in the same profession, the designer is more likely to be classified as an independent contractor according to Colorado’s criteria.

Filing a Complaint for Worker Misclassification

If you believe you’ve been wrongly classified as an independent contractor, you have the right to file a complaint with the Colorado Department of Labor and Employment. This department conducts investigations into allegations of misclassification. To initiate the process, you can submit a complaint form online. Once your complaint is received, the agency will launch an investigation.

If the findings support the claim of misclassification, the employer could face stringent penalties. These may include back payment of unemployment insurance premiums with interest and fines up to $5,000 per misclassified employee for the first offense, and up to $25,000 for subsequent offenses. Your identity will be kept confidential throughout the investigation process.

Contact a Colorado Employment Attorney to Discuss Your Options

The road to resolving employment misclassification can be intricate and legally complex. In these situations, a Colorado employment attorney can provide the support and assistance that you need:

  • Your lawyer can help clarify the specifics of your employment situation based on both IRS and Colorado contractor definitions.
  • Your attorney can help you accurately and effectively file a misclassification complaint with the Colorado Department of Labor and Employment.
  • Your lawyer will advocate for your best interests during any investigations, hearings, or negotiations that may arise.
  • Your attorney can assist in calculating any back pay, benefits, or penalties that may be owed to you.

Given the complexity of both federal and state laws, and the potential consequences of misclassification, it is strongly recommended to consult with an attorney. If you suspect that your employment classification is incorrect, schedule a free legal consultation to learn more about your options.

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