The following is provided for informational purposes only. The information below may not apply to your specific situation so always consult an attorney. Use of this information does not create an attorney-client relationship between you and the Law Office of E.C. Lewis, P.C., home of your Denver business attorney.
Should I use independent contractors or employees?
Recently, there has been a trend to use independent contractors over employees – and for good reasons. Employers usually do not pay employment taxes, unemployment insurance, or worker’s compensation insurance on independent contractors. Independent contractors work without many of the protections afforded to employees such as the rights to minimum wage and overtime. However, it is difficult to classify workers as independent contractors and the trend is for government agencies to find that most workers are employees. Therefore, if your company is going to use independent contractors, it is important to make sure that your independent contractors meet all tests necessary to be classified as such.
Unfortunately, there is not one test used by all parties that may have an interest in determining whether your workers are independent contractors or employees. For example, the IRS, the United States Department of Labor, and Colorado statutes each have a different test. Your specific situation will determine which test, or tests, you will use. The following is the basics of the IRS and Colorado tests. More intricacies can be found both in statutes and case law.
For the full article on the IRS, Colorado, and United States Department of Labor tests for employee verses independent contractor, and information about the Law Office of E.C. Lewis, P.C.’s services, please contact your Denver small business attorney Elizabeth Lewis today.