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Overview of Colorado Statute Impacted by Senate Bill 08-114 OVERVIEW OF COLORADO STATUTE IMPACTED BY SENATE BILL 08-114 Senate Bill (SB) 08-114, effective August 5, 2008, modifies employee-leasing requirements found in the Colorado Employment Security Act (CESA) 8-70-114. NOTE: CESA 8-70-114 is being revised to incorporate the language of SB 08-114. The revised CESA will be available online when the changes from the 2008 Legislative Session are incorporated. An employee leasing company (ELC) or professional employer organization (PEO) must obtain certification from the Colorado Department of Labor and Employment (CDLE) in order to conduct business in Colorado. NOTE: ELCs are also known as PEOs; the terms are interchangeable. The requirements of CESA 8-70-114 apply to both ELCs and PEOs. Any reference within this Web page to an ELC also applies to a PEO. ELCs are required to pay wages and collect, report, and pay all payroll-related taxes from their accounts for all covered employees, including unemployment insurance (UI) taxes. During 2008 ELCs will continue to submit their tax and wages reports under the account numbers they are currently using. The ELCs’ responsibility for reporting wages and paying UI taxes under their own account numbers must begin with all wages paid on or after January 1, 2009. ELCs can no longer use the account number for the work-site employer or client. CESA 8-70-114 applies to ELCs who contract as a coemployer with Colorado work-site employers to provide services. A contract must exist between the ELC and the work-site employer. A work-site employee must receive written notification of the coemployment relationship between the work-site employer and the ELC. Work-site employers must notify CDLE of their relationship with an ELC if the ELC reports wages to the UI Program under the work-site employer’s account number. Please refer back to this Employee Leasing Companies Web page frequently for updated information. To receive an e-mail when updates occur, please send a request to ui.leasing@state.co.us. Initial Certification To conduct business in Colorado, an ELC must complete and submit Form UITL-71, Application for Certification as an Employee-Leasing Company (Application for Certification), by October 6, 2008. The initial certification is valid until June 30, 2010. An annual certification renewal is required on or before June 30 of each year thereafter. As a part of the Application for Certification, ELCs must submit proof of their ability to make UI tax payments. To obtain initial certification, ELCs must:
UI Operations plans to mail an Application for Certification packet to each ELC. These packets will be available online by the end of August. To request an application packet, send an e-mail to ui.leasing@state.co.us. On an annual basis, each certified ELC must:
According to CESA 8-76-104 (8), a transfer of experience shall not occur when:
The UI Program is in the process of revising:
Please read all sections of CESA 8-70-114 related to ELC laws and regulations. Below are links to current ELC laws, regulations, and the Employers Handbook followed by a description of relevant information:
For additional assistance, please contact UI Operations at:
Coemployer. A coemployer is either an ELC or a work-site employer. A contract must exist between the ELC and work-site employer as evidence of a coemployer relationship. Colorado Employment Security Act (CESA). CESA is the section of the Colorado Revised Statutes that governs the payment of UI benefits, the establishment and maintenance of an employer tax account, and wage reporting. Covered employee. This is an individual who is in an employment relationship with an ELC and a work-site employer and has received written notice of coemployment with the ELC. The terms covered employee and work-site employee are interchangeable. Employee leasing company (ELC). This is any person, business, or other entity that contracts with a work-site employer to provide services. The ELC as the employing unit or coemployer has the responsibility for payment of wages to the workers according to the ELC contract and to collect, report, and pay all payroll taxes. The term ELC is interchangeable with PEO. See CESA 8-70-114 (2)(b) for an explanation of the rights and responsibilities of an ELC or PEO. Employee Leasing Company Certification Fund (Fund). This is the State Treasury Fund to which ELC certification fees are deposited. The money in the Fund is used for implementation of SB 08-114. Professional employee organization (PEO). This is any person, business, or other entity that contracts with a work-site employer to provide services. The PEO as the employing unit or coemployer has the responsibility for payment of wages to the workers according to the PEO contract and to collect, report, and pay all payroll taxes. The term PEO is interchangeable with ELC. See CESA 8-70-114 (2)(b) for an explanation of the rights and responsibilities of an ELC or PEO. Regulations Concerning Employment Security (RCES). The RCES is the section of the Code of Colorado Regulations required to implement CESA. Regulations are adopted through a rules-hearing process and incorporated into RCES. Working capital. Working capital is the ELC’s current assets minus current liabilities as determined by generally accepted accounting principles. Work-site employee. This is an individual who is in an employment relationship with an ELC and a work-site employer and has received written notice of coemployment with the ELC. The terms covered employee and work-site employee are interchangeable. Work-site employer. This is any person, business, or other entity that procures the services of an ELC under an ELC company contract. The work-site employer retains direction and control of the work-site employees regarding responsibilities not shared between the ELC and work-site employer. |