New Rules for Construction Industry

A bill passed by the Colorado Legislature during the 2007 legislative session – HB 1366 – made a change to workers’ compensation coverage for workers in the construction industry. This new law requires that every person performing construction work on a construction site be covered by workers’ compensation insurance or have a Rejection of Coverage Form that has been filed with the Division of Workers’ Compensation when the subcontractor is the sole owner or partner with no employees. The law went into effect on October 1, 2007.

Compliance
Under this law, the individual on the construction site directly contracting for the work is responsible to assure that:
Employees of subcontractors are covered by workers’ compensation insurance.
Owners have rejected coverage through their carrier or have filed the Proof of Rejection form with the Division of Workers’ Compensation.

Rejecting Coverage
A sole proprietor or a partner (general partner, limited partner, limited liability partner, limited liability limited partner) without employees can reject coverage through the Division of Workers’ Compensation.

To obtain specific information on how to reject coverage, download a rejection form from the Division of Workers’ Compensation (DOWC) Website, http://www.coworkforce.com/dwc/. Look for “Official Forms” in the left column, select “Forms by Number,” scroll down to “WC45” and choose either a PDF or an MS Word format. Detailed information on HB 1366 can be obtained by clicking on “Do I Need Insurance” in that same section of the division’s Website.

You can also contact the Division of Workers’ Compensation directly at: Coverage Enforcement Unit,
633 17th St., Suite 400, Denver, CO 80202-3660; 303-318-8700.

This provision of the law does not apply to owners of a personal residence unless the worker is an employee of the owner.

Important Facts
1.The Division of Workers’ Compensation has the authority to assess a penalty of up to $500 per day if all workers are not covered by workers’ compensation insurance or have not filed the forms with the division.

2.HB 1366 adds this additional step to prove an individual is exempt from workers’ compensation coverage. Individuals who are not covered by workers’ compensation must still meet the criteria of an independent contractor outlined in the Colorado Workers’ Compensation Act.