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Workers' Compensation

Employer

What is (are)...

  • the role of the Division of Workers’ Compensation?

The Colorado Division of Workers’ Compensation is the state office responsible for administering and enforcing the workers’ compensation law in this state.  In doing so, it recognizes the intent of the Colorado General Assembly to ensure the quick and efficient delivery of disability and medical benefits to injured workers, at a reasonable cost to employers.

As the agency overseeing workers’ compensation in this state, the Division establishes rules, procedures and programs to enforce the law and to resolve disputes that may arise between the employer and the injured worker. 

The Division does not pay benefits on a claim. Rather, employers purchase insurance coverage through a private insurance company or, if qualified, through self-insurance programs.  No portion of this cost may be deducted from an employee's wages.

To learn more about Division services, obtain information about the Colorado workers’ compensation system, or to make specific inquiries, we invite you to contact our Customer Service Unit at (303) 318-8700 in the Denver metro area, or toll free, at (888) 390-7936.

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  • an independent contractor?

A person hired to perform services for pay is presumed by law to be an employee unless they meet the definition of an independent contractor or qualify under a specific exemption provided by workers’ compensation laws. A person who works as an independent contractor and can prove that the person meets the legal definition of independent contractor is not an employee and is not entitled to workers’ compensation benefits unless the person buys a separate policy.

If a business hires an individual as an independent contractor, the independent contractor must be:
  • Free from the business’ control and direction over how the service is performed; and
  • Customarily engaged in an independent trade, occupation, profession, or business related to the service being performed.

These are the two key principles of independent contracting. 

A written contract may be helpful in proving independent contractor status and is always helpful in defining the work relationship. However, the actual facts of the work relationship are the most important evidence. If the actual facts differ from what the written contract says, the facts will control. A list of important criteria about written contracts is provided in the section: What is the value of written contracts with independent contractors?

It is important to remember that if a contractor is hired who has employees, the business must verify that the contractor has workers’ compensation insurance for those employees. A business may verify insurance coverage by requesting a certificate of insurance from the contractor’s insurance company. Notification of any policy changes may also be requested of the insurer. If the contractor does not have workers’ compensation insurance for its employees throughout the duration of the work being done for the business, the business that hired the contractor can be held responsible for the workers’ compensation insurance for the contractor’s employees. If the business provides coverage for the contractor’s employees because the contractor failed to do so, the business can recover the cost of the premium from the contractor.

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  • the value of written contracts with independent contractors?

When a business intends to hire an independent contractor for a project, the parties may decide to write a contract. This helps to establish that the independent contractor adequately meets the two key principles of independent contracting identified in the section: What is an independent contractor? A contract should show the following factors appropriate to the parties’ circumstances.

  • The business does not require the individual to work for it exclusively, period of time specified in the contract.
  • The business does not establish a quality standard for the individual, how the work will be performed.
  • The business does not pay a salary or an hourly rate but rather pays a fixed or contract rate.
  • The business does not have the right to terminate the individual’s services or fails to produce a result that meets the specifications of the contract. The business does not provide more than minimal training for the individual. The business does not provide tools or benefits to the individual, except that materials and equipment may be supplied.
  • The business does not dictate the time of performance, except that a ours may be established in the contract.
  • The business does not pay the individual personally but rather makes checks payable to the trade or business name of the individual.
  • The business and the individual do not combine business operations in any way; all business operations are maintained separate and distinct.
REMEMBER: A written contract may be helpful in proving independent contractor status. However, the facts of the work relationship are actually more important than what the contract says.  Section 8-40-202(2), C.R.S. states requirements for disclosure and format for such contracts. Be sure you are familiar with this section of the law.

 

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  • the Premium Cost Containment Program?
In 1989, the Colorado legislature enacted the Premium Cost Containment Program. Under this program, employers who implement and maintain a standardized loss prevention/loss control program, and achieve certification status are eligible for a reduction on their workers’ compensation insurance premiums. By preventing injuries and lowering costs of claims, these employers also contribute to the stabilization and possible reduction of the standard rates set for their respective industries. Certification status is granted by the Premium Cost Containment Board to employers who can document that they have had a loss prevention/loss control program in effect for at least one year. 

The six minimum requirements for certification in the program are:

  1. Declaration of Policy
  2. Safety/Risk Assessment Committee and/or Coordinator
  3. Safety/Loss Prevention Rules
  4. Safety/Loss Prevention Training
  5. Designated Medical Provider
  6. Written Claims Management Procedures
The basic requisites are summarized in the Essentials Premium Cost Containment Program & Employer Certification booklet on the Division website or by clicking on: Essentials of the Premium Cost Containment Program and Employer Certification

 

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