Legal Alert: The High Costs of Misclassifying Colorado Workers as Independent Contractors


On June 3, 2009, Colorado's Governor A. William Ritter signed legislation intended to crack down on employers who misclassify their workers as independent contractors rather than employees. The legislation, known as House Bill 1310 (the "Act"), imposes stiff penalties on employers: fines of up to $5,000 for the first misclassifying offense, and up to $25,000 for each subsequent offense. Perhaps more importantly, an employer found to have misclassified workers willingly two or more times may be prohibited from contracting with the State for a period of up to two yars.

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