May 21, 2019

Colorado Court of Appeals: Multi-Factor Approach Applied to Determine Whether Workers were Employees or Independent Contractors

The Colorado Court of Appeals issued its opinion in Visible Voices, Inc. v. Industrial Claim Appeals Office on Thursday, May 8, 2014.

Unemployment Compensation Tax Liability—Definition of “Employment.”

Visible Voices, Inc. (Visible) provides “computer-assisted realtime translation” (CART) services under contracts with clients. It supplies clients with “CART providers, or captionists, who perform live word-for-word speech-to-text translation for the deaf and hearing impaired.” Visible entered into agreements with thirteen individuals (workers) to provide CART services to Visible’s clients as independent contractors.

The Division of Employment and Training (Division) issued a liability determination, concluding that the workers’ services for Visible amounted to covered employment and that Visible was required to pay unemployment compensation taxes on those services. On appeal, a hearing officer determined the workers were independent contractors. The Industrial Claim Appeals Office (Panel) upheld the hearing officer’s determination that the workers were free from Visible’s control and direction, but remanded for further findings as to whether the workers were customarily engaged in an independent trade or business providing CART-related services.

On remand, a different hearing officer affirmed the original determination. The (Panel) overturned this hearing officer’s decision as to eleven of the thirteen workers, finding that these workers were not customarily engaged in independent businesses related to the CART services and therefore were engaged in covered employment. Visible appealed.

CRS § 8-70-115(1)(b) defines covered employment for unemployment tax liability purposes. To establish that a worker is customarily engaged in an independent trade or business related to the services performed, a putative employer must show that the worker is engaged in a separate business venture, other than the provision of services for the putative employer.

The Court of Appeals concluded that a multi-factor approach to determining whether a worker is customarily engaged in an independent trade, occupation, profession or business, as enunciated in Softrock Geological Services, Inc. v. Industrial Claim Appeals Office, 2012 COA 97, ¶ 10 (cert. granted March 25, 2013), is the standard to be applied. In Softrock, the Panel focused almost exclusively on whether the workers performed CART services for others besides Visible.

The Court affirmed the portion of the Panel’s order determining that two of the thirteen workers were independent contractors and not in covered employment with Visible. However, the Court found that evidence in the record supported the hearing officer’s determination that the eleven workers in question were customarily engaged in independent businesses related to the services provided by Visible. Accordingly, the remainder of the order was set aside and remanded with instructions to reinstate the hearing officer’s determination that the remaining eleven workers were also not in covered employment with Visible.

Summary and full case available here.

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