July 18, 2019

Colorado Court of Appeals: Unemployment Taxes Not Required Where Workers not “Employees” for CESA Purposes

The Colorado Court of Appeals issued its opinion in Whitewater Hill, LLC v. Industrial Claim Appeals Office on Thursday, January 29, 2015.

Agricultural Work—Taxes—Exempt—Colorado Employment Security Act—CRS § 8-70-120(1)(a).

Petitioner Whitewater Hill, LLC (Whitewater) operates a small vineyard and winery. Following an audit, the Colorado Department of Labor and Employment (Department) issued a liability determination concluding that agricultural work performed by certain workers for Whitewater amounted to covered employment and that Whitewater must pay taxes on amounts it paid those workers. The hearing officer concluded that the workers’ services were not employment, but rather exempt agricultural labor. Therefore, Whitewater was not required to pay taxes on the amounts it paid the workers. The Industrial Claim Appeals Officeconcluded that the workers’ services constituted covered employment.

On appeal, Whitewater contended that the workers’ services were exempt agricultural labor under the Colorado Employment Security Act(CESA) and that the Panel misinterpreted CRS § 8-70-120(1)(a). CRS § 8-70-120(1)(a) provides that during the current or preceding year, when a putative employer employs ten or more agricultural workers within each of twenty different weeks, the workers’ services constitute employment. Here, because Whitewater had employed ten or more agricultural workers in only four different weeks from 2011 through the first quarter of 2013, the workers’ services were not “employment” under CRS § 8-70-120(1)(a). Consequently, Whitewater was not required to pay unemployment taxes on amounts it paid the workers. The order was set aside and the case was remanded with directions.

Summary and full case available here, courtesy of The Colorado Lawyer.

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