Work Comp: W2 vs 1099
I am confused....
The requirement to cover someone on work comp does not depend on W2 or 1099. It depends on the answers to the below questions per the Colorado department of labor.
(II) To prove independence it must be shown that the person for whom services are performed does not:
(A) Require the individual to work exclusively for the person for whom services are performed; except that the individual may choose to work exclusively for such person for a finite period of time specified in the document.
(B) Establish a quality standard for the individual; except that the person may 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.
(C) Pay a salary or at an hourly rate instead of at a fixed or contract rate.
(D) Terminate the work of the service provider during the contract period unless such service provider violates the terms of the contract or fails to produce a result that meets the specifications of the contract.
(E) Provide more than minimal training for the individual.
(F) Provide tools or benefits to the individual; except that materials and equipment may be supplied.
(G) Dictate the time of performance; except that a completion schedule and a range of negotiated and mutually agreeable work hours may be established.
(H) Pay the service provider personally instead of making checks payable to the trade or business name of such service provider.
(I) Combine the business operations of the person for whom service is provided in any way with the business operations of the service provider instead of maintaining all such operations separately and distinctly.
If the answer is Yes or Does to any of the above, a judge could determine the employer is resposible to provide workers compensation to this employee. Hefty fines could be assessed if non compliant. The employer could also be on the hook for medical or other expenses.
If you have been needing to review health insurance for you and or your business, contact Martin Doremus at Health Protection Consulting. Click the video below to hear a message from Martin: