Misclassification of Independent Contractors—A Continuing Concern in Colorado
This week, Colorado Governor John Hickenlooper signed an Executive Order creating a joint task force to address worker classification and payroll fraud in the construction industry.FN1 The task force will consist of seven members of business associations and labor groups, appointed by the Governor, and will be charged with assessing current agency practices regarding misclassification, fostering information-sharing between agencies, facilitating complaints, identifying violators, and proposing administrative changes.
The task force is the latest in a recent tide of federal, state, and agency efforts to crack down on improper classification of employees as independent contractors. The Executive Order’s focus on the construction industry likely reflects Denver’s building boom and the importance of the construction sector to Colorado’s economy.FN2
In light of heightened scrutiny on independent contractor classification in the construction and other industries, companies should be cautious to ensure that their independent contractors are truly independent under the varying federal and state tests.
FN1: Executive Order B2018 003, https://www.colorado.gov/governor/sites/default/files/b_2018-003_joint_enforcement_task_force.pdf; see also Kelcey McClung, New Colorado Task Force Targets Payroll Fraud in Construction Industry, Denver Business Journal (Jun. 7, 2018), https://www.bizjournals.com/denver/news/2018/06/07/new-colorado-task-force-targets-payroll-fraud-in.html
FN2: Construction jobs accounted for 163,000 payroll jobs in Colorado in 2017, and the construction sector of Colorado’s economy continues to grow. https://www.colorado.gov/governor/sites/default/files/b_2018-003_joint_enforcement_task_force.pdf; Over the past few years, there has been a surge of complaints filed by construction site workers to the Colorado Division of Labor and Employment. Jered Smith, Colorado Wage Complaints Surge Amid Claims of Payroll Fraud, Abuse of Workers, Daily Camera (Apr. 23, 2016), www.dailycamera.com/boulder-business/ci_29802278/wage-complaints-surge-amid-labor-protests-over-claims; A Handful of Apparently Misclassified Workers Illustrate Big State Problem, Rocky Mountain PBS News (June 13, 2016), https://d3n8a8pro7vhmx.cloudfront.net/towardsjustice/pages/143/attachments/original/1480542038/2016.06.13_A_Handful_of_Apparently_Misclassified_Workers_Illustrate_Big_State_Problem.pdf?1480542038