Maybe. A Colorado court said that a contractor can work exclusively for one employer for a short period of time without that employer being subject to unemployment taxes. See Long View Sys. Corp. v. Indus. Claim Appeals Office of Colorado, Case No. 07-CA-2284, slip op. at p. 10 (Colo. App. Oct. 30, 2008). This differs from the traditional view that to be independent, a contractor must provide similar services to others at the same time they provide them to the alleged employer. See Speedy Messenger & Delivery Serv. v. Indus. Claim Appeals Office of Colorado, 129 P.3d 1094 (Colo. App. 2005).
The decision makes it clear that a court will look to other factors besides who the contractor is working for in a short-term (in this case a three-month) contract. Such factors include:
- Whether the contractor maintains a business listing, card, and telephone;
- Whether the contractor is vulnerable to losing money in connection with the service;
- Whether the contractor had his own equipment to perform the service;
- Whether the contractor determined the price of the service;
- Whether the contractor employed others to perform the service; and
- Whether the contractor carried his own workers’ compensation insurance.
Just because a contractor chooses to work exclusively for you doesn’t mean you have to pay unemployment insurance as long as the contract is for a fixed and short period of time.