Mountain Law: Colorado Unemployment Law |

Mountain Law: Colorado Unemployment Law

by Noah Klug

Employers pay premiums to the state of Colorado for unemployment insurance covering their employees. The premiums are placed in a fund that is used by the state to pay claims if a former employee is awarded unemployment benefits. The unemployment insurance program is administered by the Colorado Department of Labor and Employment under the Colorado Employment Security Act. Here is an overview of the program:

Employers have an incentive to challenge unemployment claims because claims can result in the state charging increased premiums for unemployment insurance. Even so, employers often do not oppose unemployment claims. This may be because they don’t want to encourage former employees to sue them for wrongful discharge … or because they don’t have clear documentation to dispute claims. In the absence of an employer having clear documentation to dispute a claim, the laws are interpreted in favor of awarding unemployment benefits to a former employee.

Former employees apply for benefits by completing paperwork claiming eligibility and filing it with the Department. The burden then falls on the employer, as desired, to show that the former employee is not eligible for benefits.

Unemployment benefits are not available for every employer. For example, the program does not apply to nonprofits, hospitals, or agricultural employers. It also does not apply to people who hire domestic services such as house cleaners.

Unemployment benefits are also not available unless the worker is an “employee.” In my December 10, 2009, article titled “‘Employee’ status and why it matters,” I wrote about the significance of a worker being classified as an employee (rather than an independent contractor), and some of the factors that play into this determination.

Former employees are only entitled to unemployment benefits if their employment was terminated through no fault of their own. The Act provides a long list of circumstances under which termination of employment may or may not be considered the fault of the employee. To give a few examples, reasons that may be considered the fault of the employee include:

• Dissatisfaction with pay, standard working conditions, opportunities for advancement, or hours;

• Quitting;

• Insubordination;

• Violation of a law or important company rule;

• On or off-the-job use of drugs or alcohol;

• Theft

• Assault or physical threats;

• Careless or shoddy work;

• Lack of transportation; or

• Unauthorized absence or excessive tardiness.

Reasons that may not be considered the fault of the employee include:

• Being laid off for lack of work;

• Violation of an employment contract by the employer;

• The employee or the employee’s close family member developing serious health issues;

• Unsatisfactory or hazardous work conditions;

• Substantial and unfavorable change in the employee’s working conditions;

• Unreasonable reduction in the employee’s pay;

• The employee being given the choice of quitting or being fired;

• The employee refusing with good cause to work overtime without reasonable advance notice;

• Harassment by the employer; or

• Work relocation for the employee’s spouse.

After a former employee applies for unemployment benefits, the Department will inform the employer, who has 12 calendar days to file an objection with supporting evidence. The Department will then review the matter and award benefits or deny the application. The employer or former employee can appeal the Department’s decision within 15 calendar days. The Department will then conduct a hearing, which may take place on the telephone, and the hearing officer will render a new decision after independent review of the evidence. This new decision can be appealed again to the Industrial Claim Appeal Office, and then into the court system.

An award of unemployment benefits may be full or partial and may be delayed for various reasons as determined by the Department. Workers who receive unemployment benefits must be able and available to work and actively seeking work. The Department can require workers to document their continued eligibility for benefits following certain regulations. Finding new work will cause unemployment benefits to stop.

Noah Klug is principal of The Klug Law Firm, LLC, a general law practice in Summit County emphasizing real estate and business law. He may be reached at (970)468-4953 or

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