The definition of employment in CESA 8-70-115 is broad and inclusive, and it is not limited to the common-law relationship of master and servant (as used by the Internal Revenue Service). If there is an employer-employee relationship, it makes no difference how the employer describes the relationship. It does not matter if the individual is called an employee, partner, co-adventurer, subcontractor, agent, contract laborer, or independent contractor. It does not matter how the payments are measured, what they are called, or whether the individual is a full-time, part-time, or temporary employee.
There are several other factors that may be considered in determining if an individual is an employee or independent contractor. For help in determining if a worker is an independent contractor or employee, contact the Unemployment Insurance Employer Services, Audits unit at (303) 318-9100, and select Option 4.
Our auditors perform a detailed audit of all records. A complete payroll audit involves an examination of all subsidiary records, including payment records for services that were not classified as employment or wages. CESA 8-72-107 requires that all records are open for inspection so that the records may be audited and verified at any reasonable time and as often as necessary.
Why am I being audited? There are 3 main types of audits.Random audits are the majority of all audits. The U.S. Department of Labor requires the state of Colorado to audit 1% of all its employing businesses each year. The pool of employers is all employers registered with the Colorado Department of Labor &, Employment and that have a current unemployment insurance account number.
Focused audits are generated by audit managers using a variety of state and federal tools and guidelines.
Complaint, Tips, and Leads audits usually come from tips and leads furnished by former employees, competitors, or U.S. Department of Labor personnel.
Officers of a corporation who perform services for the corporation are considered employees of the corporation. The I.R.S. has established that a reasonable wage should be reported. Therefore, in lieu of any wages being reported, all draws, dividends and other distributions can be reclassified to wages.
Officers and shareholders of a corporation who perform services for the corporation are considered employees of the corporation. The I.R.S. has established that a reasonable wage should be reported. Therefore, in lieu of any wages being reported, all draws, dividends, distributions and constructive receipt of remuneration can be reclassified to wages.
Resources
In order to increase the financial health of the Unemployment Insurance Trust Fund and provide relief to Colorado employers, a bond transaction totaling $630 million was secured in 2012. The bond was repaid in 2017. Effective with rate year 2018, the bond repayment assessment is no longer included in your premium rate.
A worker can have two employers for the same services when the worker is paid by a temporary-help contracting firm or an employee leasing company but performs services for a work-site employer. The temporary-help contracting firm or employee leasing company and the work-site employer are called co-employers.
What conditions must be met to be considered an employee leasing company?
In order to be considered an employee leasing company you must:Provide services to a work-site employer under a written contract that stipulates that you will procure specified employees for the work-site employer with the intent to employ the specified employees on a long-term basis and not assign them to a series of limited-term assignments.
Designate yourself as the employer of such employees and retain the right of direction and control of such employees with regard to the responsibilities listed below.
Most employers and TPAs can submit bulk wage filings directly in MyUI Employer+. Large TPAs with very high volume of filings may need to use a separate upload system. Please call Employer Services at 303-318-9100 if you believe you may need to upload with a high-volume application.
If my employer account number changed, do I need a new username?No. You can use the same username that you've used before your account number changed. Just remember to put the new account number in each "S" record.
What is an end of record terminator, or a hard return?Some programs "wrap" the text, meaning that if the text continues past the left margin, the words will wrap to the next line. However, at the end of each line, there has to be a carriage return
Can I submit multiple quarters in one file or do I need to submit separate files?
Answer The file may contain multiple quarters, as long as each "S" record's location 215-220 differentiates the quarters.
Can I file multiple account numbers in one file or do I need to submit separate files for each account number?
The file may contain multiple account numbers, also, as long as each "S" record's location 147-161 differentiates the separate account numbers.
I get an error after I click on the upload button. Why?You are probably attempting to upload into the uploaded_files folder. The screen must be at the top level before attempting to upload. The file will programmatically move into the uploaded_files folder. Click on the Top folder.
Yes, the Work Share program lets businesses temporarily reduce the hours of their employees, instead of laying them off during economic downturns. Technically referred to as short time compensation, the goal of work sharing programs is to reduce unemployment. The Division of Unemployment Insurance offers a Work-Share Program as an alternative to laying off your employees. Visit the Work Share page to see if your business qualifies.
A layoff is necessary. How can the Department of Labor and Employment assist me?
Employers experiencing a reduction in workforce are eligible for support services including consultation on layoff aversion strategies, onsite workshops for employees in transition, job placement assistance, and information on unemployment benefits. Visit the Layoffs/Separations page for more information on the Rapid Response program.
What is the turn-around time for an employer to apply for the Work Share Program?
We will process your application within a week after receiving it.
I need to reduce hours for my workers temporarily. Can they file for unemployment benefits and will those be charged to my account?
Yes, employees whose hours have been reduced can file for unemployment benefits. If the reason for the reduction in hours is a result of the COVID-19 pandemic, benefits will not be charged to your account. If you reimburse the division for benefits charged, you will have to pay 50% of the benefits charged. The Coronavirus Aid, Relief, and Economic Security Act or the CARES Act provides for the Federal Treasury to pay the other half through 12/31/20.
Can the employer "furlough" the employees (rather than terminate) and would this qualify as the employees being "job attached" meaning they would be expected to return to the employer in up to 16 weeks. Would these furloughed employees be able to get unemployment benefits?
Yes. An employee who has been temporarily laid off or furloughed should file an unemployment claim and indicate that he or she expects to return to work, which would make them job attached.
Do I have to pay my employees their PTO when I temporarily lay them off?
No. If you plan to bring your employees back to work, you are not required to pay PTO or vacation pay.
Can I require my employees to take vacation time or PTO?
You may require them to take vacation time or PTO. If you pay them for this time, it may affect when unemployment benefits can start.
Can I continue to pay my employees health care benefits while they are laid off?
Yes, you may continue to pay for employee's health care benefits. It will not have an impact on their unemployment benefits because it is not counted as earnings.
You may be required to pay unemployment insurance premiums if you meet one or more of the following requirements:
Paid wages of $1,500 or more in a calendar quarter during the current or preceding calendar year or, employed at least one person for some portion of a day in each of 20 different weeks during the current or preceding calendar year
Employed at least one person for some portion of a day in each of 20 different weeks during the current or preceding calendar year. Employed domestic help in a private home and paid cash wages of $1,000 or more to one or more workers in any calendar quarter. This provision applies also to local college clubs and/or local chapters of a college fraternity or sorority. Either paid cash wages of $20,000 or more to one or more agricultural workers in a calendar quarter or employed ten or more agricultural workers for some portion of a day in each of 20 different weeks during a calendar year.
Are an agricultural crew leader. You are considered an agricultural crew leader if you: Furnish workers to perform farm labor for another person. Pay, either on your behalf or on behalf of another person, the workers you furnish for farm labor. Have not made a written agreement with another person under which the farm workers are designated as employees of that person.
Are a religious, educational, or charitable nonprofit organization who meets the description in the federal Internal Revenue Code (IRC) 501 (c)(3) and employed four or more employees for some portion of a day in each of 20 different weeks during a calendar year. You are required to pay UI premiums even if you are exempt from federal unemployment premiums under the Federal Unemployment Tax Act (FUTA) 3306 (c)(8) Are subject to FUTA Acquired all of a Colorado trade, business, organization, or a substantial portion of the assets from a predecessor employer who is liable to pay unemployment insurance premiums.
Acquired a part of a trade, business, or organization of an employer that, if considered separately, would be an employer as defined by CESA. Are a state agency, state-operated hospital or school of higher education, or a political subdivision of the state. Voluntarily elected to participate in the Unemployment Insurance and your voluntary election is approved.
Which workers are not covered for unemployment insurance purposes?
Foreign agricultural workers who are holding type H2-A visas. Nonresident alien individuals holding various nonimmigrant visas, including student, exchange-visitor, foreign-vocational-student, and cultural-exchange-visitor visas. Exceptions would include student and exchange-visitor visas allowing work for no more than 20 hours per week during an academic year or 40 hours during summer breaks. Insurance agents who are paid by commission only. Students or spouses of students employed by a school, college, or university to which the students attend and are employed through a financial-aid program. Students participating in work-study or cooperative-education programs. Patients performing services for a hospital. Spouses employed by a sole-proprietor spouse or the spouse of a member in a partnership. Persons under 21 years of age employed by their parent operating a sole-proprietorship business or a parent in a partnership. Elected officials of a state or political subdivision. Members of a legislative body or of the judiciary of a state or political subdivision. Election officials. Members of the state National Guard or Air National Guard. Temporary workers for a government agency performing services during a fire, storm, snow, earthquake, flood, or similar emergency. Railroad workers insured by the Railroad Retirement Tax Act.
An independent contractor is free from control and direction by you in the performance of the service under the contract agreed upon by you and the worker. An independent contractor is customarily engaged in an independent trade, occupation, profession, or business for others related to the service performed for you.
A Liability Determination is a notice explaining that the Division of Unemployment Insurance has determined an employer is responsible for providing unemployment insurance coverage for its workers. The Liability Determination informs the employer that the workers are deemed employees in accordance with the Colorado Employment Security Act (CESA), therefore, the business is liable for paying unemployment insurance premiums by reporting employee's wages to the Division, typically on a quarterly basis.
Liability Determinations are issued to employers under the following scenarios:
A former worker files for unemployment insurance benefits and the Division determines the employer is liable pursuant to Colorado law. The Division reviews the wages a worker has earned from all employers during a specified period. If, during that period, a business has not reported the worker's wages and has not paid unemployment insurance premiums on those wages, the Division will make a determination as to whether the worker was engaged in services as an employee for the company. If it is determined the individual was, in fact, an employee, a Liability Determination will be issued notifying the employer of his or her responsibility to provide unemployment insurance coverage.
The Division conducts field audits to ensure employers are complying with the tax and benefit provisions of CESA. A Liability Determination must be provided to the employer when changes are made to an employer's account (for example, it is found that workers were not properly classified, were not reported as workers, or there were payroll-posting errors). The Liability Determination accompanies the audit findings and details the reason the changes were made to the employer's account. Visit the Employer Audits page for more information regarding the audit process.
The Liability Determination becomes final unless a written request for an appeal is received within 20 days of the mailing date of the notice of liability. Visit the Appeals page for more information on how to file an appeal.
What are the factors used to determine if you have an employer-employee relationship?
A person who is required to comply with instructions about when, where, and how to work is ordinarily an employee. Some employees may work without receiving instructions because they are highly proficient in their line of work and can be trusted to work to the best of their abilities. However, the control factor is present if you have the right to instruct. The instructions may be verbal or written procedures that show how the desired result is to be accomplished.
TrainingA person who is trained by an experienced employee, by correspondence, by required attendance at meetings, or other methods is not free from control because the training is an indication that you want the services performed in a particular method or manner. This is especially true if the training is given periodically or at frequent intervals. An independent contractor ordinarily uses his or her own methods and receives no training from the purchaser of services.
Integration of ServicesIntegration of another person's services into the business operations generally shows that the person is subject to direction and control. In determining whether integration exists, the scope and function of the business are identified and then a determination is made as to whether the services of the individual are merged into the business operations. When the success or continuation of a business depends upon the performance of certain kinds of services, the workers who perform those services may be subject to a certain amount of control by the owner of the business.
Personal ServicesIf you require that a worker personally render a service, you are interested in the methods and the results. You are interested not only in getting a desired result but also in who does the job. Lack of control may be indicated when an individual has the right to hire a substitute without your knowledge or permission.
AssistantsIf you hire, supervise, and pay assistants, you generally have control over all persons on the job. Sometimes one worker may hire, supervise, and pay other individuals. This worker may hire others as the result of a contract in which the worker agrees to provide materials and labor and accepts the responsibility only for the attainment of a result. In this case, the hiring worker may be an independent contractor. On the other hand, if that person hires, supervises, and pays assistants at your direction, the hiring worker may be acting as your employee in the capacity of a supervisor or representative.
Continuing ServicesThe existence of a continuing relationship between an individual and the person for whom the services are performed is a factor indicating the existence of an employer-employee relationship. Continuing services may include work performed at frequent, recurring intervals, either on call or whenever the work is available. If the arrangement requires continuing or recurring work, the relationship is considered permanent. It makes no difference if the services are rendered on a part-time basis, are seasonal in nature, or are only for a short period of time.
Set HoursThe establishment of set hours of work by you is a factor indicative of control. When you set the hours of work, you prevent the worker from controlling his or her own time, which is a right of an independent contractor. Even when fixed hours are not practical because of the nature of the occupation, a requirement that the individual work at certain times is an indication of control.
Full-Time Servicesf a worker must devote full-time services to your business, you have control over how much time is spent working. An independent contractor, on the other hand, is free to work when and for whom he or she chooses. Full-time employment does not necessarily mean an 8-hour day or a 5-day week. The meaning may vary with the intent of the parties or the nature of the occupation. These conditions should be considered in defining "full time." Full-time services may be required even if a full-time schedule is not specified verbally or in writing. For example, workers may be required to produce a minimum volume of business, which compels them to devote all of their working time to that business.
Location of ServicesWork that is completed on your premises does not, by itself, demonstrate control. However, it does imply that you have control, especially if the work could be done elsewhere. A person working in your place of business is physically within your direction and supervision. The use of desk space, a telephone, and clerical services provided by you places the worker within your direction and supervision. The fact that work is done off the premises does indicate some freedom from control. However, it does not, by itself, mean that the worker is not an employee. In some occupations, it is necessary for services to be away from your premises. This is true for employees of construction contractors.
Set order of ServicesIf a worker must perform services in an order or sequence set by you, it shows that the worker may be subject to your control. This person is not free to follow his or her own patterns of work but must follow your established routines and schedules. Often, because of the nature of an occupation, you may not set the order of the services. However, if you retain the right to do so, control is demonstrated.
ReportsControl is demonstrated if the worker is compelled to account for his or her actions by verbal or written reports submitted to you.
Payment for ServicesAn employee is usually paid by the hour, week, or month. Independent contractors are paid a lump sum agreed upon for the total job. The guarantee of a minimum salary or the granting of a drawing account at stated intervals with no requirement for repayment of the excess over earnings tends to indicate the existence of an employer-employee relationship.
ExpensesYour payments for the worker's business or traveling expense are a factor indicating control over the worker. Conversely, a lack of control is demonstrated when the worker is paid for an entire job and must take care of all incidental expenses. Tools and Materials If you furnish tools and materials, this is indicative of control over the worker. If the worker furnishes the tools and materials, it indicates a lack of control. However, consideration must be given to the fact that in some occupational fields it is customary for employees to use their own hand tools.
InvestmentA person who invests a significant amount of money into the facilities used to perform services for another tends to show an independent status. On the other hand, if you furnish all of the necessary facilities, this indicates the absence of a worker's independent status. Facilities include equipment necessary for the work, but not the tools, instruments, clothing, etc., that are provided by employees as a common practice in their particular trade.