Illegal Employees
Putting someone at risk to save a few dollars by not covering them in event of injury is dirty business. It's also illegal, and here's why you have to be an idiot to do it:
All business in Colorado are required to have Workers Compensation insurance for anyone who doesn't own atleast 10% of the business. For those people that do own 10%, they must file an exemption at www.colorado.gov/pacific/cdle/node/20371 not to be required to have this insurance.
A pet sitter, or any business that uses "Sub-Contractors", "Independent Contractors", "Part-timers", "Seasonals", "1099ers" or any other way they try to get around withholding taxes and buying Workers Compensation Insurance has put themselves at the mercy of those illegal employees, or really anyone at all who knows about their illegal activity. If this could be done legally, WalMart would be full of "Independents". The IRS defines subcontractors, and it's the business owner's responsibility to classify employees correctly. Misclassifying employees is tax evasion, at both the state and federal level, and there are no mulligans, just fines and prison.
Here's Colorado's penalties for "Independent Contractors". $5000 for the first misclassified employee, $25,000 (not a misprint) for each additional. That's just the fine!
Here's the IRS / Federal penalties for "Independent Contractors". Orange can be your new black. It's that serious.
Anyone can call 303-318-8700 and report them anonymously, or at www.colorado.gov/pacific/cdle/node/20181
Here's how the pet
sitter's employee can get a 50% raise, stop working, and screw the pet sitter
all in one shot:
An illegal employee is still entitled to Workers
Compensation, but the pet sitter didn't get the insurance. Just like
driving a car, not getting insurance doesn't exempt you from liability, it makes
it worse. Illegal
employee makes up an injury that never happened, calls 303-318-8700, or goes to
the Colorado Department of Labor and Employment's
website and files a claim.
Liability for the pet sitter who misclassified the employee goes up to 150%! But they have no legal
assistance from Workers Compensation because they didn't buy the insurance. CDLE is not going to investigate the illegal claim, the pet sitter is on
their own. Injuries can cost millions.
Even worse- the employee can get a lawyer and say they work for you, the homeowner, and not the service that also claims they are "Independent". Check your Homeowner's Insurance for the Worker's Compensation clause. Sit down first. Then, while you're still sitting, google "Workers Compensation Lawyer Denver" and see how many sharks are waiting for you.
Our general advice is to skip pet sitters that use employees.
Everything on this page can be verified at www.colorado.gov/cdle