Independent contractor misclassification costs Colorado employer $2 million

This case illustrates the risks involved in classifying workers as independent contractors when you treat them like employees. The evidence alleged by the flow testers, including the company’s control and direction over the time, manner, and location of their work, their hourly pay, required adherence to company work rules, mandatory attendance at company meetings, company-provided training, and the company’s right to hire, fire, and discipline them, suggests an employment relationship rather than an independent contractor relationship.
You must examine the working relationship closely when you’re determining whether a worker could be classified as an independent contractor. Getting it wrong can result in liability not only for unpaid overtime and the associated penalties but also for unpaid employment taxes, workers’ compensation and unemployment insurance, and possibly other employee benefits.

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