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CCH® UNEMPLOYMENT INSURANCE — 9/9/08

Colorado amends its law on various topics

Colorado has amended its Employment Security Act as follows:

Benefit awards. The law previously allowed an individual separated from his or her job to receive full benefits if he or she quit to relocate as a result of a military spouse’s transfer because of a medically related purpose in time of war or armed conflict. The law now only requires that the individual move as a result of the military spouse’s transfer. Benefits awarded to claimants in these circumstances will not affect an employer’s premium.

Note that the Division must now maintain records regarding the number of individuals claiming benefits and the amount of benefits awarded in these circumstances. The Division also must make a report to the Colorado House and Senate by January 31, 2009, with the relevant statistics.

Powers, duties and functions. The Division is now responsible for all administrative functions of the law including rulemaking, regulation, rates and standards. It also is authorized to accept and expend moneys from gifts, grants, donations and other nongovernmental contributions to use for its authorized purposes.

Employee leasing companies. The law now defines the term “co-employer” as an employee leasing company or work-site employer. The term “co-employment relationship” is defined as one intended to be ongoing, rather than temporary or project specific, and where the rights and obligations of the employer have been allocated between the co-employers by an employee leasing contract. In addition, the employee leasing company and work-site employer are entitled to enforce only the employer rights and obligations allocated to them under the contract. The work-site employer also may enforce any right and perform any obligation not specifically allocated to the employee leasing company by the contract. The terms “covered employee” and “work-site employee” mean an individual who is in an employment relationship with an employee leasing company and work-site employer and has received notice of the co-employment.

A new subsection requires an employee leasing company to pay wages and collect and report taxes from its own accounts for all covered employees. The company will pay contributions and maintain all documents required of work-site employers under the law.

Each employee leasing company is the only employing unit for covered employees. Such companies must file an annual renewal of their certification on or before June 30 each year.

Employee leasing companies must annually certify and execute and file a surety bond or deposit the equivalent of 50 percent of the average annual amount of unemployment tax assessed within the previous calendar year (for a new employee leasing company, the initial bond amount will be the standard tax rate multiplied by 50 percent of the estimated projected taxable payroll for the current calendar year); provide an independently audited financial statement (no older than 13 months) that demonstrates that the company has working capital of at least $100,000; or show on an annual basis that it has been accredited by a bonded, independent and qualified assurance organization approved by the Director that provides satisfactory assurance of compliance acceptable to the Department.

The Department will maintain a list of employee leasing companies that submit the required certifications. This list will be available to the public.

An individual may not offer employee leasing company services or use the name “employee leasing company” or related names (such as PEO, administrative employer, staff leasing) without first obtaining certification. In addition, the Department may take disciplinary action against a company that provides fraudulent information or makes a material misrepresentation.

Deputy's decision. The law no longer requires the deputy to issue a decision in cases where the claimant has insufficient qualifying wages if the claimant did not file a continued claim.

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