Colorado is losing more and more money each year to employers dodging mandatory unemployment insurance premium payments, according to a Rocky Mountain PBS News analysis. The estimated loss is about $23 million dollars a year since 2011.
Employers are required to pay the premiums on their employees. But, by labeling workers “independent contractors” – or unsupervised workers who make their own schedule and are not directed in their responsibilities – companies don’t have to pay.
The problem occurs when an employee is directed and supervised, but labeled an independent contractor anyway.
The construction industry had the highest unpaid insurance premiums and largest number of misclassified workers from 2011 to 2015, according to the analysis of state unemployment insurance audit data. Between 2011 and 2015, random audits of construction companies in Colorado found $1 million dollars in unpaid premiums and 3,433 misclassified workers.