New law requires construction industry to verify workers’ compensation coverage of subcontractors.

House Bill 1366, which makes a change to workers’ compensation coverage for workers in the construction industry, has officially gone into effect as of October 1, 2007. 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.

Under this law, the person on the construction site who contracts work from another party is responsible to either provide workers’ compensation coverage to the contracted employees or require proof of coverage from the subcontractor employing these workers. The “responsible person” may also accept a Rejection of Coverage Form from sole proprietors or partners (general partner, limited partner, limited liability partner, limited liability limited partner) that have no employees and have filed the form with the state Division of Workers’ Compensation. Owners of a personal residence are specifically excluded from this law unless the worker is an employee of the owner. If the requirements of the law are not meet then a penalty of up to $500 per day may be assessed by the Division of Workers’ Compensation.

For more information regarding HB 1366 and its requirements, you can contact StaffScapes or click on the links below.

See Also

• HB 1366
  Copy of the House Bill
• HB 1366 FAQ
  FAQ sheet from the Colorado Dept of Labor
• Rejection of Coverage Form
  Form to reject coverage from the Division of Workers’ Compensation

Update on the new HB 1366 and Pinnacol Assurance’s requirements.

Last week I posted an article outlining the new Colorado requirements that companies in the construction industry must follow regarding subcontractors. After reviewing the rejection of coverage requirements for owners and partners, I questioned Pinnacol Assurance concerning the requirement to complete their Independent Contractor form as well as the Division of Workers’ Compensation’s Rejection of Coverage Form. Unfortunately the answer I received was that the Pinnacol form and the Division’s form are two separate and unique forms and both are required to be completed and filed individually.  I was also reminded that if an Independent Contractor form is not filed with Pinnacol, they reserve the right to charge premiums on any wages paid to the independent contractors.  Also if the Rejection of Coverage Form is not filed with the Division, then they may assess a penalty up to $500 per day.

So, if you are in the construction industry and you have any subcontractors that are waiving workers’ compensation coverage, then you need to complete and file two separate rejection forms.