Navigating Workers’ Compensation for Independent Contractors in Colorado

Recent events have caused a rise in remote work, digital entrepreneurship, and freelancing across Colorado. In truth, however, independent contractors have played an important role in our economy for decades. Many Colorado residents are attracted by the freedom, flexibility, and even the tax benefits they experience as independent contractors. While many of these factors are relatively straightforward, one possible area of confusion involves workers’ compensation. What happens if you become injured as an independent contractor in Colorado? Can you still file a workers’ comp claim?

Workers’ Compensation Does Not Cover Independent Contractors

The most important thing to understand about this situation is that workers’ compensation in Colorado does not cover anyone who is classified as an “independent contractor.” The benefits of workers’ compensation are reserved for “employees.” Even though you might be working for a specific company as an independent contractor, you might not fall under the classification of an employee.

What “Counts” as an Independent Contractor in Colorado?

How do you know whether you should be classified as an employee or an independent contractor in Colorado? Generally speaking, all freelancers fall into this category. This includes people like freelance writers, graphic designers, video editors, virtual assistants, SEO specialists, and so on. While digital freelancers are more common today than ever before, there are also plenty of independent contractors in the “real world.” These include certain construction professionals, security specialists, consultants, and many others.

Many independent contractors choose to incorporate or form LLCs to experience certain tax benefits. Even though you may cease to operate as an “individual” with your new corporate business structure, you still fall under the same general classification as independent contractors. This also applies to sole proprietorships. If your corporation expands to include employees, however, you may elect to get workers’ compensation insurance for your workers and yourself. Ultimately, many independent contractors need to determine whether workers’ compensation insurance is in their best interests – or whether it makes more sense to “self-insure.” Workers’ compensation insurance may be especially useful for independent contractors with high rates of injury – including construction contractors.

Companies Often Misclassify Their Employees as Independent Contractors

As you might have guessed, there is a clear financial incentive for companies to classify their workers as independent contractors instead of employees. With independent contractors on their payroll instead of employees, they can avoid the cost of workers’ compensation insurance. However, such tactics are highly controversial – and they may not be legal.

If you believe that your employer misclassified you as an independent contractor, you should discuss this concern further alongside a qualified, experienced workers’ compensation attorney in Colorado. The distinction between employees and independent contractors can be extremely blurry, and you may need to take legal action in order to resolve related disputes.

Routes to Compensation for Independent Contractors in Colorado

If you have not been misclassified, there are still other potential routes toward compensation for injuries. One option may be to file a normal health insurance claim – although most personal health insurance policies do not cover work-related injuries.

A more common option is to file a claim against another contractor. For example, you might have been working as an independent electrician/contractor on a construction site. If you were injured by another contractor (perhaps a plumber), you may have the option to file a personal injury claim against them. As long as they are not your direct employer, personal injury lawsuits are possible.

You might also file a product liability claim if your injury was caused by some kind of product. For example, you might have been injured by a malfunctioning power tool, and you might then have the opportunity to file a claim against the product manufacturer.

At the end of the day, it is very difficult to assess potential routes toward compensation until you speak with a qualified injury attorney in Colorado. Some forms of negligence can be very subtle. Certain parties may be responsible for your accident, and you might not even realize it.

Find a Workers’ Compensation Attorney in Colorado

If you have been searching for a workers’ comp attorney in Colorado, look no further than the Law Offices of W. Dan Mahoney, P.C. We know that independent contractors are just as vulnerable to injuries as other workers. You are fully justified in exploring your options for compensation after an injury, and you can determine the most appropriate route forward with our guidance. Book your consultation today to learn more about workers’ compensation and independent contract work in Colorado.

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• Wrokers' Compensation