The state that brought us legalized recreational marijuana and local decriminalization of psychedelic mushrooms may be a bigger buzzkill than we thought — at least for businesses using independent contractors.

A new Colorado law reclassifies the failure to pay wages as theft, which sounds pretty chill; but the way the law is written, it could have the effect of making independent contractor misclassification a crime.

Failing to pay wages under Colorado law includes failing to pay a minimum wage or overtime. When independent contractors sue and allege they were really employees, one of the most common claims asserted is that, since they were really employees, they were entitled to a minimum wage and overtime pay. In these lawsuits, contractors often allege they worked enough hours that they should have been paid overtime. Colorado overtime law requires employees to be paid overtime not only after working 40 hours in a workweek, but also after working more than 12 hours in a workday or 12 consecutive hours over two days.

It is unclear whether the new law was intended to criminalize independent contractor misclassification, but it may have that effect. On the other hand, Colorado businesses may be able to an assert a good faith defense, arguing that the new criminalization law is intended only to cover willful acts of failure to pay, not legitimate disputes over whether someone is legitimately classified as an independent contractor.

It remains to be seen how things play out, but when Colorado businesses get an occasional break from making sure their laborers aren’t high, it might be a good idea to double check independent contractor relationships to make sure they can withstand a legal challenge.

© 2019 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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