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Contractor Or Employee… Do You Really Know?


Boulder Insurance Update

contractor employee insurance

Misclassification of contractors and employees can be a problem when it comes to Boulder workers’ compensation and employment laws. The Department of Labor (DOL) is cracking down on employers who misclassify independent contractors who really should be employees. If you are an employer who hires contractors, the DOL has issued new guidelines to help you.

The guidance comes right out of the Fair Labor Standards Act where the identification process is explained. One of the big reasons for the enforcement is to offer the protections to employees for minimum wage, overtime, and unemployment compensation. Recently in New York, Uber and Lyft drivers were determined to be contractors, not employees. However, every state will make its own determination. The DOL offers these six factors for employers to use as a test to differentiate between an employee and a sub-contractor.

The six factors or questions in the “economic realities” test include:

  1. Is the work an integral part of the employer’s business?
  2. Does the worker’s managerial skill affect the worker’s opportunity for profit or loss?
  3. How does the worker’s relative investment compare to the employer’s investment?
  4. Does the work performed require special skill and initiative?
  5. Is the relationship between the worker and the employer permanent or indefinite?
  6. What is the nature and degree of the employer’s control?

Source: DOL-Administrator’s Interpretation No. 2015-1

Most companies have a tough time in selecting the right insurance products that can provide the best coverage, besides remaining within the budget limit. Many times companies end up picking the wrong insurance products due to the absence of expert help. If you run a business in Central Colorado, you need not worry, as you can contact Steve Longenecker to save you the trouble and to help manage your insurance products with ease.  Steve has been active in the field of insurance advising for over a decade now, and has many happy clients to his credit. This tech savvy insurance agent–with an awesome team–makes sure that all your requests and inquiries are taken care of within 24 hours.

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