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What are the Workers’ Compensation Laws in Colorado?

Workers' Compensation Laws - Avalue Insurance

Colorado Workers’ Compensation Laws: What Business Owners Need to Know

KEY TAKEAWAYS:

  • Here are the workers’ compensation laws of Colorado that every business owner should be aware of:
    • Workers’ compensation insurance is required by law in Colorado when you hire your first employee.
    • Independent contractors might still be considered employees for workers’ comp purposes, so be cautious about misclassifying them.
    • Sole proprietors and partners aren’t required to have workers’ comp on themselves but can choose to opt in.
    • LLCs need to cover their employees but not necessarily themselves. Corporate officers can opt out but should consider coverage.
    • Agricultural and casual labor businesses must provide workers’ comp if they have more than 5 regular employees or 100 or more days of agricultural labor in a year.

Running a business is no walk in the park. You’ve got enough on your plate with endless paperwork, demanding customers, and the ever-changing landscape of business regulations. But let’s talk about something crucial that you absolutely can’t afford to overlook: workers’ compensation insurance.

But do you have to have workers’ compensation insurance? What are the workers’ compensation laws in the state of Colorado? Let’s talk about it!

Workers’ Compensation Laws: When is it Required by Law in Colorado?

When is workers’ comp required by law in Colorado? The answer: pretty much all the time, unless you’re a one-person show or an LLC with no employees. For the rest of us, it’s a must-have.

Here are a few things to keep in mind when considering workers’ comp insurance:

1. If you have one or more employees, then you probably need workers’ comp.

According to Colorado’s workers’ compensation laws, you’ll need workers’ comp coverage even if you only have one employee! Whether they’re full-time, part-time, seasonal, or minors — if they’re working for you, you’ll need to protect them with workers’ comp insurance. This is the only type of coverage that will offer them financial protection in the event that they are injured on the job. So, not only is this a wise decision on your part, it’s also a great way to make your employees feel a lot safer on the job.    

2). Don’t get sucked into the “independent contractors vs. employees” trap.

Now, here’s where it gets a bit tricky. Colorado, like many other states, is clamping down on businesses that try to label workers as independent contractors to dodge workers’ comp responsibilities. The state is pretty serious about this, so be careful not to misclassify your employees. If someone’s primarily doing work for your business and isn’t an independent business themselves, they’re probably your employee.

3). Rules for sole proprietors and partners.

If you’re a sole proprietor or a partner in a business, you’re not required to carry workers’ comp on yourself unless you opt-in. However, it might still be a smart move to protect yourself.

4). Rules for LLCs and corporate officers.

If you’re an LLC, you must cover your employees but not yourself. For corporate officers, the story’s a bit different. If you’re an officer and you own at least 10% of the corporation, you can choose to exclude yourself from workers’ comp coverage. But honestly, why would you? Accidents can happen to anyone, so it might be wise to cover yourself too.

5). Rules for farm labor and casual workers.

If you’re in the agricultural or casual labor business, things are a bit different. You’re required to provide workers’ comp if you have more than 5 regular employees or 100 or more days of agricultural labor in a year.

Chat with a Workers’ Comp Professional Today

Navigating workers’ compensation laws can be tricky, especially if you’ve never done it before. The good news: you don’t have to do it alone.

Avalue Insurance is your go-to partner for all things workers’ comp in Colorado. We understand the ins and outs of the state’s laws, and we’re here to make workers’ comp a lot simpler. Request a consultation today to get started!

To speak with an agent right away, give us a call at (303) 773-3332 or email us at: info@avalueinsurance.com

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