This FAQ covers the 5 most common employment law questions we hear from business owners, everything from handling employee handbooks to understanding compliance requirements. Whether you’re unsure how to respond to a workplace issue or need clarity on policies and procedures, you’ll find clear answers and practical steps to help you navigate your employment matter with confidence.
What is the difference between an independent contractor and an employee?
An independent contractor is a term of art for a hired status wherein a business hires a contractor to perform a service or provide a product. The product or service is typically documented in a written agreement that provides for a fixed price payment in the business name of the independent contractor. They derive earnings from their work from multiple different sources and typically do not derive revenue for a specific type of work from only one source. They are solely responsible for the ordinary administrative operations of their business as well. They manage their own state and federal tax withholding, pay for their own liability insurance, and carry workers compensation insurance. As for the foundational operations of their business, independent contractors typically set their own schedule as determined by the needs of their own business. They generally work free from the direction of the paying customer, with the primary exception being details about the work to be performed. Independent contractors train their own people to perform work, and they typically provide the tools necessary to perform the work. Independent contractors typically invest in their own business and future earnings as well. As you can probably notice, to classify as an independent contractor in Colorado, the independent contractor must always be firmly independent from their customers during the operation of the business. Independent contractors typically can survive financially when they lose a customer, but when they are financially dependent on one customer it is important to seek legal counsel to assess the appropriate status. Alternatively, those hired by a business to perform a function on behalf of the business, but not as independent contractors, are typically called employees. Employee status is effectively the opposite of the independent contractor status. Employees work under the control and direction of their employers. They are also heavily dependent on income from the employer for their specific work, as they typically work exclusively for the employer. Employees typically rely on their employers for training, work assignments, insurance coverage, workers compensation, benefits, tax withholding, and scheduling of work. If you have any questions about the independent contractor versus employee status issue, it is imperative that you seek legal counsel to help you determine the appropriate status. There are substantial legal consequences associated with misclassification of personnel performing work for a business. This is a fact dependent and technical area with legal implications, so we recommend seeking counsel if you have specific needs on this question.
Why do I need an Employee Handbook or manual?
Employer obligations under state and federal law can be exceedingly complex. The area of employment law is expanding, and employment manuals or handbooks can aide employers and employees in navigating the legal aspects of the employment relationship. Employers who establish clear boundaries and guidelines for the relationship tend to have better outcomes for the parties involved in the relationship. An employee manual may create enforceable rights and obligations if it is sufficiently specific and relied upon by the parties. As an example, the handbook can help define how an employee requests time off, or what documentation an employee is expected to provide for sick leave. It can also set forth expectations for the relationship, such as deadlines, meeting times, and performance expectations. Additionally, handbooks can assist in ensuring compliance with mandatory notices under state and federal law, such as notices under the Colorado Pregnant Workers Fairness Act or the Healthy Families and Workplaces Act. Handbooks and manuals can establish employee standards of conduct or workplace complaint procedures to ensure that a business maintains a healthy morale among its workers. Ultimately, manuals serve to establish standards for the relationship between employee and employer. If properly crafted, these documents can enhance businesses and their work environments making for a profitable business and positive workplace for years.
Does Colorado require that I provide sick leave to my employees?
Yes. Colorado employees are entitled to earn paid time off, which can then be used for a variety of health and safety purposes, pursuant to Colorado’s Healthy Families and Workplaces Act (“HFWA”). All employees, regardless of their part-time, full-time, or temporary status, are entitled to earn paid leave at a rate of one (1) hour of leave per every thirty (30) hours worked. Employees begin earning sick leave under HFWA as soon as their employment begins. Employees may accrue up to forty-eight (48) hours of paid leave per year under HFWA. Employees taking sick leave under HFWA must be paid the same hourly rate or salary (and in no event less than minimum wage), provided the same benefits, and paid according to the same schedule as their normal working conditions. Employees may carry over up to forty-eight (48) hours of paid leave from one year into the next but are only entitled to use forty-eight (48) hours in any given year. Hours that carry over into the next year count towards the employees’ forty-eight (48) hours that can be earned per year. Accrued leave may be used for any of the following reasons: 1. An employee’s mental or physical illness, injury, or health condition prevents them from working; 2. An employee needs to obtain a medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition; 3. An employee needs to obtain preventative medical care; 4. An employee needs to care for a family member who has a mental or physical illness/injury/health condition, needs to obtain a medical diagnosis/care/treatment of a mental or physical illness/injury/health condition, or needs to obtain preventative medical care; 5. An employee or a family member has been the victim of domestic abuse, sexual assault, or criminal harassment and the use of leave is to seek medical attention for a condition caused by the abuse/assault/criminal harassment, obtain services from a victim services organization, obtain mental health or other counseling, seek relocation due to the abuse/assault/harassment, or seek related legal services; 6. An employee’s place of business has been closed due to a public health emergency; 7. The school or daycare of an employee’s child has been closed due to a public health emergency and the employee must be absent to care for the child; 8. An employee needs to care for a family member whose school or daycare has been closed due to inclement weather, loss of power/heating/water, or other unexpected occurrence or event that results in closure; and 9. An employee needs to evacuate their home due to inclement weather, loss of power/heating/water, or other unexpected occurrence or event that necessitates evacuation. C.R.S. 8-13.3-401, et. seq.
What can I do under the HWFA if I think my employee is misusing sick leave?
Employers have certain obligations to provide sick leave under Colorado law and can be penalized for improperly denying sick leave. However, there is a pathway to reasonably deny sick leave if it is taken under suspicious circumstances. Sick leave in Colorado is a technical area of the law and we recommend that you seek legal counsel if you have complex questions related to sick leave administration under the HWFA. Under 7 CCR 1103-7 (Rule 3.5.6), an employer may require “reasonable documentation” that sick leave is for a HFWA-qualifying purpose only if the leave requested or taken is for “four or more consecutive work days.” This means four consecutive days on which the employee would have ordinarily worked absent the leave-qualifying condition, not four consecutive calendar days. Reasonable documentation is defined as not more documentation than needed to show a HFWA-qualifying reason for leave. The documentation sufficient under the law can be in the form of a note from a health care provider that the employee received any services (including remote services) from a health or social services provider for the HFWA-qualifying condition. An employee who did not receive services from a provider for the HFWA-qualifying leave, or who cannot obtain a document from their provider in reasonable time or without added expense, can provide their own writing indicating that they took leave for a HFWA-qualifying purpose. If an employer reasonably deems an employee’s documentation deficient, without imposing a requirement of providing more documentation than HFWA or applicable rules permit, prior to denying leave the employer must: (1) notify the employee within seven days of either receiving the documentation or the employee’s return to work (or termination of employment, if the employee does not return), and (2) provide the employee the minimum of seven days to cure the deficiency after the employee is notified that the employer deems the existing documentation inadequate. If you intend to deny sick leave or would like to establish a policy that streamlines this process for your business, we recommend you receive legal counsel. Denial of accrued sick leave is subject to legal action under either the HWFA or the Colorado Wage Act. Seeking legal support can help prevent unnecessary and potentially damaging litigation in these situations.
What does at-will employment mean and what are the exceptions to at-will employment?
In Colorado, all employees generally operate under the presumption that employment is for an indefinite period and that both the employer and employee are free to terminate their work relationship at any time. This is an important concept under the law because it ensures that the employment relationship and economic environment allow people to maximize their value and financial well-being. The law permits exceptions to at-will employment for implied contracts for employment, wrongful termination as a matter of public policy, wrongful constructive discharge, promissory estoppel, and more. Employers that are seeking to terminate the employment relationship should consider several factors when pursuing a course of action including, prior precedent in the workplace, employment policies on discipline and corrective action, proper business purposes associated with the action, and more. When the at-will status of the employment relationship is properly established in an employment manual, it can be beneficial to all parties to the employment relationship, and it can clarify for all parties how the relationship can begin and end. If you have any questions about at-will employment terminations and whether any exceptions to the at-will employment doctrine apply to your business, please reach out to us for a consultation. We can provide you with guidance and support no matter what stage of the legal process you find your business in.
If you’re facing employment-related legal challenges, the team at Business Law Group is here to help. We represent businesses navigating compliance issues, workplace disputes, and employment contracts. Let us take the stress off your plate and guide you toward a practical solution tailored to your needs. Call (719) 355-8840 or email info@businesslawgroup.us to get started.
