Colorado Seasonal Employer Status
In this article
- What could a business gain by seeking a seasonal employer status?
- How does Seasonal Employer Status work? How does a business qualify for season employer status?
- What is the definition of seasonal?
- What if your business has employees year round, but hires additional workers during certain periods of the year?
- Would a business pay unemployment premiums on seasonal workers' wages?
- Can a business pay lower wages to a seasonal worker?
- How can ASAP help?
What could a business gain by seeking a seasonal employer status?
In the resort communities of Colorado businesses employee needs ebb and flow with the seasons. What could a business gain by seeking a seasonal employer status with the Colorado Department of Labor & Employment? In short, it could help an employer maintain a lower unemployment tax rate by restricting certain workers from receiving unemployment benefits at the end of their employment.
How does Seasonal Employer Status work? How does a business qualify for seasonal employer status?
Seasonal classification would allow an employer to avoid unemployment benefit claims being charged against their unemployment account and there in by help retain a lower computed unemployment tax rate in future years. However, this isn't a one time slam dunk as there are many provisions and qualifications that an employer must follow to be granted seasonal employment status and there are additional requirements an employer must follow to retain the status in following years. Here are the qualifications and employer must meet in order to gain the status.
What is the definition of seasonal?
Unfortunately in Colorado we associate "season" or "seasonal" with the main tourist seasons of winter & summer and think of our businesses as seasonal businesses. However, in brief a seasonal business or occupation is defined as one which operated less than 26 weeks in a calendar year (including weekends). There are some additional restrictions as well; for instance there must be at least a 45 day period during the year in which the seasonal workers do not work in the seasonal occupation and no more than 25% of all workers in the entire business or in each seasonal occupation can work outside of the season.
What if your business has employees year round, but hires additional workers during certain periods of the year?
Yes, potentially those workers could still be classified as seasonal workers if the various conditions are met. The application is more detailed of course and will require a much deeper understanding of the rules in order to maintain the seasonal status each year, but for most employers it is worth investigating.
Would a business pay unemployment premiums on seasonal workers' wages?
Yes, employers would still remain subject to reporting wages for seasonal workers to the Colorado Department of Labor and would still be required to pay premiums/taxes on those wages. The benefit again is to restrict those workers from claiming benefits on your account after the position terminated at the end of the season and thereby helping one maintain a lowered tax rate in the long run.
Can a Business Pay Lower Wages to a Seasonal Worker?
Because a worker is classified as a seasonal employee, it doesn't diminish an employers responsibility to comply with payroll tax requirements or prevailing HR regulations in the State of Colorado or from having to carry worker's compensation insurance. Seasonal employees still have equal rights concerning minimum wage, overtime, record keeping, and child labor. etc.
How can ASAP help?
There are a few ways that we must be involved in order to flag worker wages properly when reported to the Colorado Department of Labor on the UITR returns quarterly. In addition, we can help you file the application and subsequent annual reports that are required to be filed each year to retain the status.
To apply for seasonal status, download the application here: Colorado Department of Labor & Employment.