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Colorado amends its Employee Leasing Law

Wednesday September 10, 2008

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.

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