Colorado Bankruptcy Law Group, LLC – Chapter 7 and Chapter 13 Personal Bankruptcy Attorneys

The distinction between employee or independent contractor can be a crucial one to both an employee or employer.  Independent contractors are not defined as employees under Colorado wage, and are not entitled to the protections or benefits that the law provides. Independent contractors are also generally responsible for paying their own employment taxes. The Colorado Department of Labor and Employment will look at three factors to determine whether or not someone is an employee or independent contractor: behavioral control, financial control, and the type of relationship.

BEHAVIORAL CONTROL

Facts that show whether the business has a right to direct and control how the work is performed, through instructions, training, or other means.
Employees are generally told:

• when, where, and how to work
• what tools or equipment to use
• what workers to hire or assist with their work
• where to purchase supplies and services
• what work must be performed by a specific individual
• what order or sequence to follow in performing tasks

FINANCIAL CONTROL

Facts that show whether the business has a right to control the business aspects of the worker’s job.
Financial aspects that may be examined include:

• the extent to which the worker has un-reimbursed expenses
• the extent of the worker’s investment
• the extent to which the worker makes services available to the relevant market
• how the business pays the worker
• the extent to which the worker can realize a profit or loss

TYPE OF RELATIONSHIP
Facts that show the nature of the relationship between the two parties.
Relevant information on the nature of the relationship includes:

• written contracts describing the relationship the parties intended
• whether the worker is provided with employee-type benefits
• the permanency of the relationship
• how integral the services are to the principal activity

In general, in an employer-employee relationship, the employer typically has control over the result of the work performed, whereas the independent contractor exerts control over the means and methods of accomplishing the result.

Peter Mullison is a bankruptcy attorney at Colorado Bankruptcy Law Group, LLC.  If you are considering Chapter 7 or Chapter 13 personal bankruptcy, schedule your free, confidential bankruptcy consultation with a Colorado bankruptcy attorney today. Our online scheduling system allows you to schedule bankruptcy consultation at a time that is convenient for you.

Colorado Bankruptcy Law Group, LLC is a personal bankruptcy firm serving clients in the greater Denver area.

photo: http://www.flickr.com/photos/whsimages/ / CC BY-NC-ND 2.0

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