Proposed Amendments to the
REGULATIONS CONCERNING EMPLOYMENT SECURITY
[Effective February 1, 2009]

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REGULATORY ANALYSIS STATEMENT
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1.	Description of classes of persons who will be affected by the proposed rule, including classes that will bear the cost of the proposed rule and classes that will benefit from the proposed rule.

The proposed amendments to the regulations will affect the Colorado Department of Labor and Employment, unemployment insurance claimants, and employers subject to the provisions of the Colorado Employment Security Act, articles 70 to 82 of title 8, C.R.S.

2.	To the extent practicable, a description of the probable quantitative and qualitative impact of the proposed rule, economic or otherwise, upon the affected classes of persons.

House Bill 07-1285, Unemployment Insurance Determination of Timeliness 
Amending the existing regulations provides conformity from statutory amendments that extend the timeline for filing a request for a new hearing from 15 days to 20 days and no longer allow the postmark date to be considered for determining whether a new hearing request is filed in a timely manner, making the new hearing procedure consistent with the procedure for filing an appeal.  Although not subject to quantification, because this bill simply changes the time period to file an appeal and the method of receiving appeals.  The agency retains the authority to excuse untimely appeals for good cause shown and liberally construes the good cause provisions.  This enactment is not the criteria used to determine whether a person is eligible for unemployment insurance benefits.  The total number of appeals is expected to remain consistent.

Senate Bill 08-114, Employee Leasing Companies
Adding an additional section to the regulations shall give clarification to new statutory legislation enacted for Employee-Leasing Companies (ELCs) certification procedures. This bill requires the following actions and procedures to be developed as follows:

•	Develop a process for the certification of ELCs to include fees not to exceed $500 per year.
•	Develop an annual renewal certification process for June 30 of each year.
•	Develop a process to ensure ELCs pay taxes for all covered employees under contract.
•	ELCs must file a surety bond or deposit with the division that could be money or a letter of credit equivalent to fifty percent of the average annual amount of UI tax assessed within the previous calendar year.
•	The executive director is authorized to take disciplinary action against ELCs for not complying with Senate Bill 08-114.
•	Revenues collected for noncompliance are deposited into the Employee Leasing Company Certification Fund.

The department is expected to certify 200 employee-leasing companies annually that will require
additional unemployment insurance staff to administer the process. Staff will assist with the rulemaking process, also initial and renewal certification of applications, and review financial records of ELCs.

3.	The probable cost to the agency and to any other agency of the implementation and enforcement of the proposed rule and any anticipated effect on state revenues.

House Bill 07-1285, Unemployment Insurance Determination of Timeliness 
A state fiscal impact statement dated February 14, and March 17, 2007, prepared by the Colorado Legislative Council of the Colorado General Assembly in connection with House Bill 07-1285 assessed the legislation as having no fiscal impact.

Senate Bill 08-114, Employee Leasing Companies
The estimated effect on state revenues and expenditures is contained in a state fiscal impact statement dated February 7, 2008, prepared by the Colorado Legislative Council of the Colorado General Assembly in connection with Senate Bill 08-114.  The Fees that are collected are set to cover both the direct and indirect costs of a program’s implementation.

State Revenue
State cash fund revenues will increase $52,000 for FY 2008-09 and FY 2009-10 from fees
to the newly created Employee Leasing Company Certification Fund.

State Expenditures
This bill has a cash fund expenditure impact of $44,659 and 0.9 FTE for FY 2008-09 and
$44,879 and 1.0 FTE for FY 2009-10 for the Department of Labor and Employment, Unemployment Insurance, to be deducted from the Employee-Leasing Company Certification Fund.

4.	A comparison of the probable cost and benefits of the proposed rule to the probable cost and benefits of action.

House Bill 07-1285, Unemployment Insurance Determination of Timeliness 
The proposed amendments do not place additional burdens on the affected classes or imply additional cost.  The changes proposed ensure that the regulations provide a consistent process for seeking relief from a hearing officer’s decision.    If the regulation proposed for amendment is not changed, parties may unwittingly file the request late, resulting in an additional procedure to establish good cause.  This could result in unnecessary delay and additional cost to the both parties and the agency. 

Senate Bill 08-114, Employee Leasing Companies
Inaction does not serve the interest of employee-leasing companies, or the agency.  The department has a responsibility to implement administrative methods for the certification process for the employee-leasing companies pursuant to this enacted legislation.

5.	Determination of whether there are less costly methods or less intrusive methods for achieving the purpose of the proposed rule.

House Bill 07-1285, Unemployment Insurance Determination of Timeliness 
The proposed amendments do not place additional burdens on the affected classes or imply additional cost.  The changes proposed ensure the regulations are clearly reflective of the existing statute.

Senate Bill 08-114, Employee Leasing Companies
The proposed amendments will add clarity to the regulations and imply no cost beyond those indicated in the state fiscal impact statement referenced in item #3 above.

6.	Description of any alternate methods for achieving the purpose of the proposed rule that were seriously considered by the agency and the reasons why they were rejected in favor of the proposed rule.

No alternate methods for achieving the purpose of the proposed rule were considered.

7.	Description of efforts to notify local governments of the proposed rule changes and to solicit their comments.

A copy of the hearing notice, proposed amendments to the Regulations Concerning Employment Security and the reference legislation was mailed to the Colorado Association of School Boards, Colorado Counties, Inc., Colorado Municipal League and Special District Association of Colorado.

An accompanying letter described the proposed amendments, invited written comments, and encouraged each of these organizations to attend the public hearing.