1. Hiring, Employee vs Independent Contractor, & All That Jazz
TINA TODD
PHR-CA, SHRM-CP, CHRS
Co-Founder of simplyHR LLC
NIKKI LARCHAR
SHRM-CP
The content of this message provides practical and HR best practice information and is not legal advice. simplyHR LLC does not provide legal advice or other professional services. While every effort is made to provide accurate and current information, laws change regularly and may vary depending on the state and/or the municipality your business operates in. The information provided from simplyHR is provided for informational purposes and is not a substitute for legal advice or your professional judgement. You should review applicable federal, state and municipality laws in your jurisdiction and consult with legal counsel as you deem necessary.

2. OVERVIEW OF DISCUSSION
What is an Independent Contractor
What is an Employee
Why does it matter?
Independent Contractor - What forms you need
Applications and Interviews - What could land you in hot water
Employee - What forms you need
Legislation that could affect you

3. WHAT IS AN INDEPENDENT CONTRACTOR?
INDEPENDENT CONTRACTORS:
Perform work that’s outside of your primary business
Are not provided direction, control, or training
Are at risk for profit or loss
Typically provide their own tools and equipment
Perform work according to the contract
Colorado INDEPENDENT CONTRACTORS:
Are free from control and direction
Have independently established trade, occupation or business related to the work performed, and must be paid as such.

4. WHAT IS AN EMPLOYEE? EMPLOYEES: Colorado EMPLOYEES:
Perform work that’s part of your business
Are provided direction and control and are trained by the employer
Have no risk for profit or loss
Do not provide their own tools and equipment
Are “At-Will.”
Colorado EMPLOYEES:
Are under the employer’s control and direction in the performance of work
Are not customarily engaged in an independently established trade, occupation or business related to the work performed.

5. WHY DOES IT MATTER?

6. PENALTIES FOR MISCLASSIFICATION
Colorado penalty for first offenses up to $5,000 and up to $25,000 for second or subsequent
$50 penalty for each missed W-4
Penalties for missed Fica Taxes (Social Security and Medicare)
Failure to pay employer tax penalties
Potentially missed wages and overtime
HOW EMPLOYERS GET CAUGHT
State and/or Federal Task Forces
Worker calls state or federal Department of Labor
Worker files for Unemployment Insurance
Worker gets hurt

7. PAPERWORK - INDEPENDENT CONTRACTORS
INDEPENDENT CONTRACTORS: 1. W A CONTRACT!
It must contain the following, and you must act accordingly:
Not exclusive
No quality standard
The company pays a fixed contract rate
The company cannot terminate the work
The company does not provide training
The company does not provide tools or benefits
The company does not dictate the time of performance
The company makes checks payable to the trade or business name;
The company does not combine their business operations in any way with the individual's business. *Also, Insurance and Tax disclaimer must be included

8. EMPLOYEE RESUMES AND APPLICATIONS
Have all applicants fill out an application for employment.
Do NOT include the following questions on the application:
Age
Salary/pay information from prior employment
Social security number
Questions about previous convictions

9. INTERVIEWING: WHAT NOT TO ASK
Never ask the following during an interview:
How old are you?
Do you have any disabilities?
How many times did you call out sick at your previous employment?
What is your sex/gender?
Are you pregnant, or would you like to have children in the future?
Do you have any caregiving responsibilities?
Are you married?
What is your national origin, race or color?
What religion are you?
How will you get to work?

10. FORMS AND DOCUMENTS: I-9
Common mistakes:
Employee must fill out section 1 on first day of work
Employer has 3 days to fill out section 2
You can NOT require specific documents
You can fill out electronically, but employee and employer must physically sign and date
Retention requirements:
1 year after termination or 3 years after hire, whichever is later
Penalties: Range from $178 - $2,156.
Failing to comply with Form I-9 employment verification requirements $216 for each form

11. FORMS AND DOCUMENTS: W-4
Common mistakes:
Employee can either claim allowances (box 5) or exempt but not both
Employers should NEVER tell employees what to claim for allowances or provide any guidance on whether the employee is exempt from taxes
Very few people can claim exempt from taxes
Records must be retained for:
4 years after termination of employment
Penalties: No specific penalty. Employers may be held liable for discrepancies between what the employee filed and what was deducted. Employers may also be liable for employee taxes if the employer told the employee how to fill out form.

12. FORMS AND DOCUMENTS: OTHER REQUIRED FORMS
Model notice of health care marketplace
Pregnant workers fairness act

13. BUT WAIT, THERE’S MORE!
Reporting New Hires Colorado employers MUST report new employees and independent contractors to the state within 20 days of their first day of work.
Workers Compensation Coverage required for all Colorado employees
Optional Forms & Documents Receipt of Company Property Job Description Emergency Contact Form Direct Deposit Form Employee Handbook

14. WHAT FEDERAL LEGISLATION MAY AFFECT YOUR BUSINESS
1+ employees
Fair Labor Standards Act (FLSA)
Employee polygraph protection act
Uniformed Services Employment & Re-employment Rights Act
Equal Pay Act
Consumer Credit Protection Act
National Labor Relations Act (NLRA)
Employee Retirement Income Security Act (ERISA)
Uniform guidelines for Employee Selection Procedures
Federal Insurance Contributions Act (FICA)
employees
Immigration Reform & Controls Act (IRCA) (4+ EEs)
Occupational Safety & Health Act (OSHA) (10+ EEs)
Civil Rights Act of 1964 Title VII (15+ EEs)
Civil Rights Act of 1991(15+ EEs)
Americans with Disabilities Act (ADA) (15+ EEs)
50 or more employees
Family and Medical Leave Act (FMLA)
EEO-1 Report (if a federal contractor)
100 or more employees
Worker Adjustment and Retraining Notification Act (WARN).
EEO-1 Report (if NOT a federal contractor)
employees
Age discrimination in Employment Act (20+ EEs)
Consolidated Omnibus Budget Reconciliation Act (COBRA) (Federal 20+ EEs) (CO 10+ EEs)

15. NEXT FREE TRAINING

16. FREE UPDATES AND INFORMATION FOR EMPLOYERS
Staying up-to-date on Human Resources is EASY!
Join our mailing list:
Follow us on Facebook:
1 hour of FREE consulting for new clients

17. QUESTIONS

18. EXEMPT VS NONEXEMPT

19. WHAT TO KNOW ABOUT NON-EXEMPT EMPLOYEES
Meal and Rest Breaks (CO)
Timekeeping
Overtime (CO)
Comp Time
Volunteering
Unpaid Internships
Travel time (CO)
Working Interviews
Waiting time, On-Call, Training