COURT CLARIFIES INDEPENDENT CONTRACTOR TEST

By Mark Wiletsky

          Organizations sometimes hire independent contractors, instead of employees, to perform various tasks.  Such arrangements avoid the costly payroll taxes, paperwork, and other benefits associated with employees.  But determining who truly fits the definition of an “independent contractor” is not always easy because there is no uniform or bright-line test.  And the consequences for misclassifying someone as a contractor, even if the mistake is unintentional, can be severe.  A recent case from the Colorado Court of Appeals sheds some much needed light on this area, providing important lessons and guidance for companies that hire independent contractors.