What is the Pinnacol independent contractor form?
The Pinnacol Independent Contractor Form is a document that is an imperative part of Pinnacol’s method for determining if a business is eligible to purchase a worker’s compensation policy from Pinnacol. Pinnacol insurance providers use this form to classify businesses who have what is considered "eligible" independent contractors. It also allows Pinnacol to accept insurance premiums from those eligible businesses and to not consider premium payments from the independent contractors as additional payroll. It essentially separates those with whom you do business and pay the premium for typical employees and those you do business with that are "eligible" independent contractors and are therefore separate from your other typical employees. It is important to note here that this Pinnacol form does not necessarily refer to independent contractors as one might think of traditionally , meaning self-employed individuals and/or so-called "1099 employees."
The form is a simple one-page document entitled "Independent Contractor Certification." In all reality, it is not much more than a way for Pinnacol to ask you generic questions about your business and your relationship with those independent contractors that you intend to hire and/or use as part of your business. The form states at the top that it is in response to Colorado House Bill 07-1004, which requires that insurance carriers make availability to independent contractors as defined in the bill. The form is required every time you ask for a new or renewal policy from Pinnacol. All questions are answered with "yes" or "no." As a business owner, you will be required to certify that you have answered the questions to the best of your knowledge and belief, and understand that intentionally/willfully misrepresenting information on the form could result in the cancellation of the policy. You will then sign your name as the owner of the business and date the document.
Reasons to utilize the Pinnacol independent contractor form
There are several reasons I believe that our Pinnacol independent contractor form can significantly help employers and independent contractors. Most importantly, by using the form, an employer has some ability to mitigate the risk of misclassification when hiring independent contractors.
One of the most important questions for employers is – why should the employer use the form? The biggest reason I encourage employers to use this form is that by having the person fill out the form you are essentially providing evidence of the questions posed to determine worker status (who is working for whom), and then having that person agree with your interpretation of their status, asserting that they do indeed work for themselves.
If the person simply disagrees with the classification, and you then proceed with classification as an IC, and the person files a claim egregiously misclassifying the position, and the insurer doesn’t want to defend the position based on the facts of that specific case, by having taken steps to ensure that the employer believes the facts support an IC determination, and the person has agreed with that position, they have gone a long way toward protecting themselves. Moreover, it gives the insurer a good starting point in attacking the employee on the merits of a specific case.
If the individual fills out the form and states that they are performing services as an employee, the employer now has a very difficult task to prove that they are actually independent contractors if the person signed the form stating they were an employee, knowing that the employer was taking an IC position. In fact, even though they are taking an independent contractor position, they signed the form stating they were an employee, they were performing the tasks of an employee, (which are basically the same as the facts in most IC/employee cases) and they haven’t provided any evidence that they are an independent contractor. It is difficult, if not impossible to overcome.
How to fill out the Pinnacol independent contractor form
The process of completing the Pinnacol Independent Contractor Form is fairly simple, but it isn’t without its potential pitfalls. Getting the form correct before it’s submitted is critical because there is no method to revise an existing Pinnacol Independent Contractor Form once it’s been completed and submitted. This means that a mistake on the Pinnacol Independent Contractor Form can lead to a determination that your workers are not independent contractors, and are thus employees.
So how do you avoid this scenario? It all starts with the form proper. The form is broken up into three mostly self-explanatory sections: General Information; Independent Contractor Agreement; and Certifications.
General Information
This section simply asks questions regarding the date in which the relationship began, the name and address of business, the nature of the business (i.e. the type, such as construction), and the name and address of the business’s insurance agent. Each of these questions is fairly self-explanatory, although keep in mind that the form likely ask for a description of services provided that a more inclusive title cannot adequately describe. That description can be fairly short, and clearly mark as IC a worker that can be.
Independent Contractor Agreement
The second section of the form should look somewhat familiar. This is because the questions here are almost identical to the questions contained in a written independent contractor agreement. While it’s always good to have a written contract in place with your ICs, doing so is not required under the Colorado Workers’ Compensation Act. This Independent Contractor Form can be utilized in place of a contract.
The form asks whether a contract exists between the parties and if so, whether it has been prepared for them by a qualified attorney. If the parties have a contract that has been prepared by an attorney, then the fourth question will have already been answered for you (yes). If the parties do not use a workers’ compensation attorney to draft the contract, however, this is when you can run into trouble.
You should never put "yes" and hope that it does not get reviewed by Pinnacol as a contract that was prepared by an attorney. If it is ever deemed by Pincacol the "yes" means that a contract was prepared by a non-qualified attorney, then the Pinnacol Independent Contractor Form will not be accepted.
Never put "yes" and give Pinnacol the opportunity to decide for themselves what qualified means, especially when you dispute that decision. Trust Pinnacol to inspect every single document that is submitted to them, and do not provide them the opportunity to use that inspection process in a way that can jeopardize the IC status of your workers.
Certifications
The final step is for both the employer and the IC to sign the Pinnacol Independent Contractor Form. Once the form is signed, there is no revision process. The Pinnacol Independent Contractor Form will be reviewed fairly quickly by Pinnacol almost certainly using either the Pinnacol Test or the ABC test depending on the nature of the worker’s occupation. If all of the conditions are met, then the Pinnacol Independent Contractor Form will be approved, and your IC can be covered under your workers’ compensation policy.
Minimum requirements and eligibility
A thorough understanding of the Pinnacol Independent Contractor Form requires familiarity with its key requirements and eligibility criteria. Although there are close similarities between employees and independent contractor guidelines, the differences are readily appreciable. The following provides an overview of Pinnacol’s eligibility requirements and guidelines with respect to independent contractors.
Although adherence to the general form is not mandatory, Pinnacol highly recommends that insurers utilize its form when issuing an independent contractor coverage exemption. The Pinnacol Independent Contractor Form provides very specific guidelines and requirements that must be met or satisfied in order for the exemption to provide the contractor with immunity from being subjected to compulsory workers’ compensation coverage requirements. For example, if the work performed by the independent contractor is performed on a casual basis, then ideally the contract should specify that the independent contractor will not make use of any tools or machinery in the performance of the work. It should also specify that the contractor will not be allowed to engage in any other employment or outside work. Additionally, if the contract is for work that is to be performed over a given period of time, it is advantageous to state clearly that the worker does not have coverage under workers’ compensation insurance during that period of time, and that the work is not guaranteed by the employer. It is also highly advisable to specify that the independent contractor does not and will not be provided with any additional employees to perform the services set forth in the contract.
Independent contractors who fail to meet any one of the key elements of the Pinnacol Independent Contractor Form criteria are highly susceptible to assessment for worker’s compensation coverage by the Pinnacol Board, which could prove costly and far exceed the money saved by utilizing an independent contractor rather than an employee.
Legal consequences of misclassification
Misclassifying a worker as an independent contractor has severe implications. Initially, misclassification can result in the loss of a company’s insurance which could cause bankruptcy. Moreover, the IRS could impose fines on the employer for not taking out withholding taxes, Social Security taxes, and unemployment taxes for independent contractors . The state of Colorado is also an issue because of the Department of Labor and Employment’s guidance on employee to independent contractor classification. The Pinnacol form is helpful here as it allows you to self-certify that the individual is an independent contractor. Here are three threads of legal risks to keep in mind when misclassifying a worker as an independent contractor:
How to access and submit the form
Accessing and Submitting the Pinnacol Independent Contractor Form
The Pinnacol Independent Contractor Form is accessible directly from the Pinnacol Assurance website under the "Independent Contractor Resources" tab in the Employers’ section. There are two links to the Pinnacol Independent Contractor Form, and several valuable resources, including FAQs, articles, webpages, and online tools for managing internal claims.
As both a business and a Pinnacol policyholder, it is imperative that you as an employer take the time to educate yourself on the basic uses for the Pinnacol Independent Contractor Form as soon as possible. The appropriate use of the form can make all the difference between filing a legitimate claim for a lapse in coverage or fighting a claim that is confused with a Pinnacol policyholder’s existing Pinnacol workers’ compensation policy.
Once you have accessed the form, it is important to make sure you file it properly. Pinnacol requires that all forms be submitted via fax, electronic upload, or mail.
Due to the sensitive nature of the information requested in the Pinnacol Independent Contractor Form, it is recommended that policyholders take precautions to best protect any HC ID numbers, social security numbers, names, and dates of birth contained in the form.
Whether you are submitting a Pinnacol Independent Contractor Form on behalf of an independent contractor who has performed work for your business, or on behalf of yourself as an independent contractor, keeping accurate records between you and Pinnacol is essential to a successful claim.
Frequently asked questions and support
As with any form or process, there are likely to be some commonly asked questions. The following are just a few of them as they relate to the Pinnacol Independent Contractor Form.
1. When should I be filling out the form?
Pinnacol recommends that independent contractors be separated from their employees as soon as possible after your business relationship with them ends.
2. What do I do if I think someone is misusing this form?
If you believe that the form is being used to purposely misclassify or protect the relationship of a worker as an independent contractor , you need to contact Pinnacol and your DWC Buyer Services representative to report your concerns.
3. Where can I get additional support or resources for completing this form?
Pinnacol has more information on their website, including a link to the DWC Guidelines for the Colorado Workers’ Compensation system. You can also reach their Customer Portal through the portal link on their homepage.