Colorado will share information and coordinate more closely with the U.S. Department of Labor on the problem of worker classification.
Ellen Golombek, executive director of the Colorado Department of Labor and Employment, signed a memorandum of understanding Monday with Nancy Leppink, head of the U.S. Department of Labor’s Wage and Hour Division.
“Misclassification costs everyone,” Golombek said.
Employers who misclassify employees as independent contractors can gain an unfair advantage over competitors by avoiding payroll taxes and sidestepping labor rules.
Workers who are misclassified can be denied access to benefits and protections including family and medical leave, overtime, minimum wage and unemployment insurance.
In Colorado, an estimated 14.2 percent of workers were improperly classified as contractors, according to a report last year from the state’s Unemployment Insurance program.
Tony Gagliardi, state director of the National Federation of Independent Business, supported the agreement, saying the rules on the topic are confusing and that his members favor local regulators making the call.
The Internal Revenue Service, federal government and state labor departments all define the difference between contractors and employees differently, he said.
“There is too much gray area in this law,” Gagliardi said. “We don’t want the federal government having free rein to come in here and enforce.”
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or
