UI Quarterly News
3rd Quarter 2006
REMINDER: The UI Quarterly News is published on the Internet. The most current
information regarding unemployment insurance (UI), including current and
previous newsletters, is available at www.coworkforce.com/UIT/; click on
UI Tax
Newsletter.
To obtain a hard copy of the UI Quarterly News, send an e-mail to
unemp.tax@state.co.us
or call one of the telephone numbers below.
Colorado Department of Labor and Employment
Unemployment Insurance Operations
P.O. Box 8789, Denver, CO 80201-8789
303-318-9100 (Denver-metro area)
1-800-480-8299 (outside Denver-metro area)
www.coworkforce.com
| Bill Owens |
|
Rick Grice |
| Governor | Executive Director |
UNEMPLOYMENT INSURANCE TRUST FUND BALANCE
The monetary level of the Unemployment Insurance (UI) Trust Fund has increased
over the past year. The increase is the result of an improved economy and
continuing efforts to rebuild the fund.
The monetary level of the UI Trust Fund directly impacts the tax rates assigned
to employers. As the fund level increases, Colorado statute provides for a
gradual annual lowering of the base rate. When the UI Trust Fund reaches an
acceptable level of solvency, the solvency tax surcharge will no longer be in
effect. Please refer to the article titled “Solvency Tax Surcharge for 2007” for
a more detailed explanation.
The balance of the UI Trust Fund as of June 30, 2006, was $445,411,793. This is
an increase over the balance as of June 30, 2005, which was $220,977,176.
UNEMPLOYMENT INSURANCE TAX RATES FOR 2007
Due to the increase in the monetary level of the Unemployment Insurance Trust
Fund, there is a decrease in the 2007 base tax rates for many employers.
According to the tax-rate schedule in the Colorado Employment Security Act
8-76-103 (3)(b)(II), the base tax rate is moving five rate schedules to the left
(see column heading “396 to 450 Million”).
You will receive notification of your tax rate for 2007 on Form UITR-7, Notice
of Employer’s Tax Rate. The Notice of Employer’s Tax Rate will be mailed in
November 2006.
SOLVENCY TAX SURCHARGE FOR 2007
In accordance with the Colorado Employment Security Act 8-76-102 (5)(a), a
solvency tax surcharge (STS) was assigned to ratable employer accounts beginning
in calendar year 2004. This STS is the result of the Unemployment Insurance (UI)
Trust Fund’s level of solvency decreasing below a level that ensures the ability
of the UI Program to pay UI benefits. The STS is added to the standard or
computed rate when the UI Trust Fund balance on any June 30 is equal to or less
than nine-tenths of one percent of the total wages reported by ratable Colorado
employers for the calendar year or the most recent available four consecutive
quarters prior to the last computation date.
The STS was assessed to employers for rate years 2004 and 2005.
The ratio of the UI Trust Fund balance to the total wages reported by ratable
employers on June 30, 2005, exceeded the ratio on June 30, 2004, allowing for
the 2006 STS increase to be credited back to most employers according to House
Bill (HB) 05-1208, Solvency Tax Surcharge Modification. HB 05-1208 was in effect
for rate year 2006 only.
As of June 30, 2006, the UI Trust Fund balance stood at sixth-tenths of one
percent of the total wages reported by ratable Colorado employers. Since the UI
Trust Fund balance is less than nine-tenths of one percent of the total wages
reported by ratable Colorado employers, the STS will be assessed for rate year
2007.
Information about the STS for rate year 2006 is available on the UI Tax Web site
at www.coworkforce.com/UIT. Click on
Solvency Tax Surcharge and Its Impact on
Tax Rates for Calendar Year 2006. In November 2006 please refer to the UI Tax
Web site for updated information about the STS for calendar year 2007.
STATE UNEMPLOYMENT TAX ACT DUMPING PREVENTION
State Unemployment Tax Act (SUTA) dumping is a practice of some employers to
create new business entities for the purpose of transferring employees and, in
some cases, a part of the organization, trade, or business in order to
deliberately avoid an increase in their unemployment insurance (UI) tax rate
caused by UI benefit payments attributable to an existing company.
The UI Program is implementing a tax-analysis program to detect signs and
patterns of fraud in UI tax-account activity. The UI Program’s efforts to detect
tax fraud target both active and inactive UI tax accounts.
In order to help protect the integrity of the UI Trust Fund and minimize the
negative impact that SUTA dumping has on UI tax rates, employers with knowledge
of SUTA dumping practices may report information to the Director of UI Integrity
at 303-318-9036. The source of the information is kept confidential.
NEW PROCEDURES FOR EMPLOYERS ACQUIRING ANOTHER BUSINESS
Due to recent law changes, Unemployment Insurance (UI) Operations requires
additional information about a new business that is established due to the
purchase or acquisition of another business or some portion of another business.
An acquisition is defined as gaining ownership of the assets, stock, and/or
employees of a previously established business. An acquisition can occur as a
result of the reorganization of an existing business. If you have acquired a
business or some portion of a business, you must complete Form UITL-67,
Business-Acquisition Questionnaire. To download the form, go to
www.coworkforce.com and click on UI Business Forms. You may also contact UI
Operations at 303-318-9100 (Denver-metro area) or 1-800-480-8299 (outside
Denver-metro area) to request the form.
POWER OF ATTORNEY REMINDER
Form UITL-18, Power of Attorney, must be submitted to Unemployment Insurance
Operations before information about an employer account can be provided to
anyone other than the employer. If one power of attorney (POA) is discontinued
and a new POA is established, the effective date of the acceptance and/or
discontinuation must be included on the form. The Power of Attorney form must be
notarized. To download the Power of Attorney form, go to
www.coworkforce.com and
click on UI Business Forms.
REMINDER
Employers will receive Form UITR-7, Notice of Employer’s Tax Rate, by December
2006. To verify that Unemployment Insurance Operations has your correct mailing
address on file, call 303-318-9100 (Denver-metro area) or 1-800-480-8299
(outside Denver-metro area). You may change your mailing address at
www.coworkforce.com; under the “Unemployment Tax” heading (in the left menu),
click on Employer-Change-of-Business Address.
HOUSE BILLS OF INTEREST FROM THE 2006 LEGISLATIVE SESSION
For information about the 2006 legislative session, visit
www.leg.state.co.us.
During the 2006 legislative session, three bills of interest to employers were
signed into law:
House Bill (HB) 06S-1017, signed by Governor Owens on July 31, 2006, requires
employers to document and affirm the legal work status of employees hired on or
after January 1, 2007. The bill authorizes the Colorado Department of Labor and
Employment (CDLE) to conduct random audits of employers to ensure compliance.
HB 06S-1023, signed by Governor Owens on July 31, 2006, and effective August 1,
2006, requires all persons 18 years or older to sign a sworn affirmation and
provide proof of identification establishing their lawful presence in the United
States in order to receive certain benefits from the state of Colorado,
including unemployment insurance benefits.
HB 06-1343, signed by Governor Owens on June 6, 2006, and effective August 7,
2006, requires state agencies and political subdivisions to contract for
services with contractors who do not employ illegal aliens. HB 06-1343
authorizes CDLE to conduct investigations. (An electronic complaint form is
available on the CDLE Web site at www.coworkforce.com under the “Investigations
& Criminal Enforcement” heading.)
VERIFY SOCIAL SECURITY NUMBERS, NAMES, AND IMMIGRATION STATUS OVER THE INTERNET
Employers can verify social security numbers and names of current and former
employees over the Internet. This free service is available through the Social
Security Administration and can be used only to ensure that the records of
current or former employees are correct for the purpose of completing Internal
Revenue Service Form W-2, Wage and Tax Statement. The service is available to
all employers and third-party submitters of wage data for this purpose. Use of
this service helps to ensure employers’ wage records are accurate. For more
information and to use this service, go to
www.socialsecurity.gov/employer/ssnv.htm.
The Systematic Alien Verification for Entitlements (SAVE) Program is a service
for verifying an employee’s immigration status that is available through the
Department of Homeland Security Immigration and Customs Enforcement. To register
with the SAVE Program, go to
https://www.vis dhs.com/EmployerRegistration.
Job Fair
Tuesday, October 3, 2006
11 a.m. to 5 p.m.
Adam's Mark Hotel
The currency of economic growth is employment. In support of employment is
education. Economic growth, employment, and education are the three “e”s that
are the focus of the 2006 E3 Job Fair.
The E3 Job Fair, hosted by the Colorado Department of Labor and Employment and
the Denver-metro area workforce centers, brings together representatives from
business (including new-growth sectors), government, and academia. Job
opportunities are made available to the workforce from a wide representation of
Colorado businesses. Solutions are offered to strengthen communities, build
businesses, and foster economic opportunity. Tips for improving a résumé are
offered.
If your business has job openings, call Julie Berge at 303-318-8836 for a free
booth.
For additional information, visit
www.coworkforce.com/wd.
QUESTIONS OR CONCERNS?
For tax questions and issues related to your account, you can contact
Unemployment Insurance Operations by calling 303-318-9100 (Denver-metro area) or
1-800-480-8299 (outside Denver-metro area) or by sending an e-mail to
unemp.tax@state.co.us.