The Colorado Workers’ Compensation Act (“the Act”) excludes independent contractors from presenting compensable claims. However, in some cases, it may be difficult to determine whether a claimant should be considered an employee or an independent contractor. In Holsinger Drywall Inc. v. ICAO, the Court of Appeals decided that in order to determine whether a claimant is an independent contractor hinges on the analysis set forth by ICAO v. Softrock Geological Services, Inc., 2014 CO 30, which was an unemployment case. Earlier this year, the Colorado Court of Appeals held in Pella Windows & Doors, Inc. v. ICAO, 2020 COA 9, that the Softrock analysis is also applicable for workers’ compensation cases.
In Holsinger Drywall, claimant was installing drywall when he fell and sustained injuries. Claimant sought benefits under the Act, but the ALJ determined that the claimant was an independent contractor and therefore was not eligible for benefits under the Act. Claimant appealed, and in its analysis, the Panel applied factors outlined in Softrock and found that Claimant was an employee whose claim was compensable. The employer then appealed the Panel’s decision to the Colorado Court of Appeals.
The employer’s appeal claimed that the Panel’s application of Softrock factors was improper. The Court disagreed, and explained that although Softrock was an unemployment case, its factors for deciding whether a person is considered an employee or independent contractor could be applied to workers’ compensation cases. The Court further explained that the Pella case expressly called for the application of Softrock factors in making an employee/independent contractor determination in a workers’ compensation case. Softrock applies the nine factors set forth in section 8-70-115(1)(c), “as well as any other information relevant to the nature of the work and the relationship between the employer and individual.” In determining whether a worker is an independent contractor, the courts consider whether the employer:
- Does not require individual to work exclusively for employer;
- Does not establish a quality standard for the individual;
- Does not pay a salary or hourly rate, but rather pays individual a fixed or contract rate;
- Does not terminate work during contract period, unless individual violates contract;
- Does not provide more than minimal training for the individual;
- Does not provide tools or benefits to the individual (materials/equipment ok);
- Does not dictate the time of performance (completion schedule is ok);
- Does not pay the individual personally, rather makes checks out to individual’s business;
- Does not combine his business operations in any way with the individual’s business.
The Colorado Court of Appeals in Holsinger remanded the case to the Panel to further remand the case to the ALJ. The Court of Appeals tasked the ALJ with determining whether claimant is an employee under Softrock’s analysis. The Court of Appeals made clear that the ALJ’s determination may then only be “correct[ed], set aside, or remand[ed]” by the Panel if there is evidence that the “findings of fact are not supported by the evidence.” The Court instructed the ALJ to consider Softrock’s factors in a workers’ compensation case, as authorized by the Pella case, when making the determination regarding whether a claimant is an employee or independent contractor.
Holsinger Drywall Inc. v. ICAO, No. 19CA1013 (Colo. App. May 28, 2020)