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Colorado Custom Maid, LLC v. Industrial Claim Appeals Office

Supreme Court of Colorado, En Banc

May 28, 2019

COLORADO CUSTOM MAID, LLC, Petitioner,
v.
INDUSTRIAL CLAIM APPEALS OFFICE and Division of Unemployment Insurance, Respondents.

Page 1006

          Certiorari to the Colorado Court of Appeals, Court of Appeals Case No. 16CA75

         Attorneys for Petitioner: James Abrams, LLC James Abrams, Denver, Colorado

          Attorneys for Respondent Industrial Claim Appeals Office: Philip J. Weiser, Attorney General, Emmy Langley, Assistant Solicitor General, Denver, Colorado

          No appearance on behalf of Division of Unemployment Insurance.

         OPINION

         HART, JUSTICE

         [¶1] Colorado Custom Maid (CCM) places house cleaners with clients who need their homes cleaned. In doing so, it has tried to avoid becoming the house cleaners’ employer, hoping instead to maintain the relationship as one between a referral service and a group of independent contractors so that it could avoid paying unemployment taxes on the money it paid to those cleaners.

         [¶2] In 2014, the Colorado Department of Labor and Employment Division of Employment and Training (Division) concluded that, despite CCM’s efforts to characterize them as independent contractors, CCM’s cleaners were in fact employees for whom the company should be paying unemployment taxes. After evaluating the dynamics of the relationship between CCM and its cleaners, we agree. We therefore affirm the court of appeals’

Page 1007

decision, which itself affirmed the conclusion of an Industrial Claim Appeals Office Panel (Panel) that the realities of CCM’s relationship with its cleaners establish an employment relationship.

          I. Facts and Procedural History

         [¶3] CCM describes itself as a referral service that matches house cleaners with homeowners. The company recruits potential cleaners and, after checking their work and criminal histories, enters into contracts that specify that the cleaners are independent subcontractors. When a homeowner contacts CCM, the company assesses how frequently the home will be cleaned, determines how long each cleaning will take, and sets a price for the cleaning. CCM then assigns one of its contracted cleaners to the home. Each time a home is cleaned, the homeowner writes a check to CCM and CCM in turn gives the cleaner forty-seven percent of what it was paid by the homeowner.

         [¶4] In May 2014, the Division conducted an audit of CCM for the three preceding years to determine whether CCM properly classified its cleaners as independent contractors. The Division concluded that the cleaners should have been classified as employees under the Colorado Employment Security Act (CESA) and required CCM to pay unemployment taxes on the amounts it had paid to the cleaners during those years.

         [¶5] CCM appealed. A hearing officer reversed the Division’s decision, concluding that CCM had proven, as required by section 8-70-115(1)(b), C.R.S. (2018), that the cleaners were free from CCM’s control and direction and that they customarily engaged in ...


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