§ 8-70-115 — Employment - Federal Unemployment Tax Act

(1) (a)
Employment, subject to other provisions of this subsection (1), includes any
service performed prior to January 1, 1972, which was employment as defined in this
subsection (1) prior to such date and service performed after December 31, 1971, by
an employee as defined in section 3306 (i) of the Federal Unemployment Tax Act
and any service performed after December 31, 1977, by an employee, as defined in
subsection (o) of section 3306 of the Federal Unemployment Tax Act, including
service in interstate commerce.

(b) Notwithstanding any other provision of this subsection (1) and
notwithstanding the provisions of section 8-80-101, service performed by an
individual for another shall be deemed to be employment, irrespective of whether
the common-law relationship of master and servant exists, unless and until it is
shown to the satisfaction of the division that such individual is free from control and
direction in the performance of the service, both under his contract for the
performance of service and in fact; and such individual is customarily engaged in an
independent trade, occupation, profession, or business related to the service
performed. For purposes of this section, the degree of control exercised by the
person for whom the service is performed over the performance of the service or
over the individual performing the service, if exercised pursuant to the
requirements of any state or federal statute or regulation, shall not be considered.

(c) To evidence that such individual is engaged in an independent trade,
occupation, profession, or business and is free from control and direction in the
performance of the service, the individual and the person for whom services are
performed may either show by a preponderance of the evidence that the conditions
set forth in paragraph (b) of this subsection (1) have been satisfied, or they may
demonstrate in a written document, signed by both parties, that the person for
whom services are performed does not:

(I) Require the individual to work exclusively for the person for whom
services are performed; except that the individual may choose to work exclusively
for the said person for a finite period of time specified in the document;

(II) Establish a quality standard for the individual; except that such person
can provide plans and specifications regarding the work but cannot oversee the
actual work or instruct the individual as to how the work will be performed;

(III) Pay a salary or hourly rate but rather a fixed or contract rate;

(IV) Terminate the work during the contract period unless the individual
violates the terms of the contract or fails to produce a result that meets the
specifications of the contract;

(V) Provide more than minimal training for the individual;

(VI) Provide tools or benefits to the individual; except that materials and
equipment may be supplied;

(VII) Dictate the time of performance; except that a completion schedule and
a range of mutually agreeable work hours may be established;

(VIII) Pay the individual personally but rather makes checks payable to the
trade or business name of the individual; and

(IX) Combine his business operations in any way with the individual's
business, but instead maintains such operations as separate and distinct.

(d) A document may satisfy the requirements of paragraph (c) of this
subsection (1) if such document demonstrates, by a preponderance of the evidence,
the existence of such factors listed in subparagraphs (I) to (IX) of paragraph (c) of
this subsection (1) as are appropriate to the parties' situation.

(2) Where the parties use a written document pursuant to paragraph (c) of
subsection (1) of this section, such document may be the contract for performance
of service or a separate document. Such document shall create a rebuttable
presumption of an independent contractor relationship between the parties, where
such document contains a disclosure, in type which is larger than the other
provisions in the document or in bold-faced or underlined type, that the
independent contractor is not entitled to unemployment insurance benefits unless
unemployment compensation coverage is provided by the independent contractor
or some other entity, and that the independent contractor is obligated to pay
federal and state income tax on any moneys paid pursuant to the contract
relationship.

(3) Where the parties use a written document pursuant to paragraph (c) of
subsection (1) of this section, and one of the parties is a professional whose license
to practice a particular occupation under the laws of the state of Colorado requires
such professional to exercise a supervisory function with regard to an entire
project, such supervisory role shall not affect such professional's status as part of
the independent contractor relationship.

(4) To improve the process of determining the classification of an individual
for purposes of this section, including any audits performed pursuant to section 8-72-107, the department shall:

(a) Develop guidance for employers on the factors specified in paragraph (c)
of subsection (1) of this section;

(b) Clarify the process by which an employer or individual may submit further
information in response to a determination by the department and prior to an
appeal;

(c) Establish an individual to serve as a resource for employers by providing
guidance on:

(I) The proper classification of workers;

(II) Audit findings; and

(III) Options for curing or appealing an audit;

(d) Establish internal methods to improve the consistency among auditors;
and

(e) Establish an independent review of a portion of audit and appeal results
at least twice a year to monitor trends and make improvements to the audit
process.

Legislative History

Source: L. 90: Entire section added, p. 592, � 3, effective April 3; entire section R&RE, p. 1766, � 10, effective June 8. L. 91: Entire section amended, p. 1366, � 1, effective May 18; entire section amended, p. 1343, � 1, effective June 5. L. 2016: (4) added, (SB 16-179), ch. 275, p. 1138, � 2, effective August 10.