EMPLOYEE-LEASING COMPANY’S LIABILITY REGARDING UNEMPLOYMENT INSURANCE TAXES
Thank you for your inquiry regarding unemployment insurance (UI) statutes and regulations concerning employee-leasing companies in Colorado.
For UI tax purposes, no special licenses or bonds are required of employee-leasing companies. Employee-leasing companies are required to file Form UITL-39, Coemployer Annual Report, listing all clients, worksites, and the number of employees. Employee-leasing companies have responsibilities to their clients, employees, and the Colorado Department of Labor and Employment (CDLE) regarding unemployment insurance benefits, tax reports, and liabilities as stated in Colorado statutes.
A contract must exist between the employee-leasing company and the client company in order to establish the co-employer relationship. Colorado statute does not treat an employee-leasing company as a common paymaster.
Clients of an employee-leasing company must notify CDLE of their relationship with an employee-leasing company if the client company reports wages under the employee-leasing company’s Federal Employer Identification Number or if the client’s UI tax account number is inactivated as a result of this contractual relationship.
The Colorado Employment Security Act (CESA) and the Regulations Concerning Employment Security (RCES) contain provisions regarding employee-leasing companies operating in Colorado. Additional information may also be obtained in Publication UI-266, Employer’s Handbook. The following sections of each publication apply to employee-leasing companies:
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CESA 8-70-114 (1) through 8-70-114 (6) |
Definitions—Employee-leasing company and Common Paymaster |
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CESA 8-76-104 (6) |
Transfer of experience |
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CESA 8-76-106 |
Termination of employer liability |
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RCES 7.2.4 |
Quarterly Tax and Wage Reports |
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RCES 7.2.7 |
Cessation or Transfer of Business |
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“Who Is Employing the Worker?” |
To obtain a hard copy of CESA, RCES, or the Employer’s Handbook, contact UI Operations at unemp.tax@state.co.us, 303-318-9100 (Denver-metro area), or 1-800-480-8299 (outside Denver-metro area).
The Colorado Department of Labor and Employment must determine if an organization will be classified as an employing unit. This determination will be made based on information provided by the organization on Form CR 0100, Colorado Business Registration. You may complete the Colorado Business Registration online or download and print the Colorado Business Registration.
For additional assistance, please contact UI Operations at unemp.tax@state.co.us, 303-318-9100 (Denver-metro area), or 1-800-480-8299 (outside Denver-metro area).