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Q: If I am an officer or shareholder of the corporation, why do I have to pay unemployment premiums?
A: 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.
Q. What is a Liability Determination and why would I receive one?
A. 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 employees’ wages to the Division, typically on a quarterly basis.
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. For more information regarding the audit process, please click here.
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. Click here for more information on how to file an appeal.
Q: What are the factors used to determine if you have an employer-employee relationship?
Employers in construction-related industries may be subject to a different base rate; however, the surcharges are the same. Contact UI Employer Services for more information on beginning base rates for employers in construction-related industries. firstname.lastname@example.org (303) 318-9100 (Denver-metro area) 1(800) 480-8299 (outside Denver-metro area) UI Employer Services P.O. Box 8789 Denver, CO 80201-8789