SBDC Template

Employer Responsibilities

As an employer, you have responsibility for compliance with several important laws and regulations. You must withhold federal and state income taxes, pay for unemployment and workers’ compensation insurance, and withhold and match Social Security (FICA) taxes. You are required to obtain certain information about your employees for various government agencies including the Internal Revenue Service (W-4 form) and the Immigration and Naturalization Service (1-9 form). Regular reports must be completed and returned to each agency with which you deal.

This table shows the most common requirements and the agencies responsible:

 

Requirement 
Agency
Federal Income Tax Withholding and Unemployment Taxes Internal Revenue Service (IRS)
800-829-1040
www.irs.gov

SS-4 Form established an Employer Identification Number (EIN)

State Income Tax Withholding and Unemployment Insurance Colorado Department of Revenue
303-238-3278
www.colorado.gov/revenue

CR-100 Trade Name Registration

Social Security (FICA)
Quarterly Payroll Reports
Form 941 & Form 940 (FUTA)
Internal Revenue Service (IRS)
800-829-1040
www.irs.gov

Workers' Compensation Insurance Colorado Compensation Insurance Authority
888-390-7936
www.colorado.gov/cdle/dwc


Colorado Labor Regulations Colorado Department of Labor & Employment, Labor Standards Unit
303-318-8441
www.colorado.gov/cdle/dwc

Safety & Health of Employees (Protected by Federal Regulations) Occupational Safety & Health Administration (OSHA), Americans with Disabilities Act
www.osha.gov

Immigration Law US Immigration and Naturalization Service
http://www.uscis.gov

I-9 Form

Employee or Contractor? How to Tell the Difference

Employee:
  • Individual follows instructions about when, where and how to perform the work
  • Receives training from the employer
  • Required to perform the work in person (may not sub-contract)
  • Uses assistants supplied by the employer
  • Has an ongoing work relationship with the employer
  • Fixed hours of work
  • Full-time work status
  • Works at employer’s location
  • Subject to the work flow
  • Routines and schedules of the employer
  • Required to provide regular progress reports
  • Paid on an hourly, weekly or monthly basis
  • Paid for expenses
  • Uses company's tools and equipment
  • Restricted to working exclusively for that employer
  • Can quit or be discharged
Independent Contractor:
  • Worker is paid on a lump-sum basis
  • Provides his or her own tools and equipment
  • Works “off-site” without supervision
  • Significant investment in his or her own work facilities
  • Realizes a profit or a loss from the work activity
  • Has multiple clients
  • May not quit or be discharged without liability for completing a contract for work
  • Form 1099 must be filed for each independent contractor or whomever you paid over $600 during the year
For more information, see IRS Publication 344, Tax Guide for Small Business, or call Colorado Unemployment Insurance Liability Unit at 303-839-4922.