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Colorado employers can expect rate increases for unemployment insurance

Aldo Svaldi
The Denver Post

Colorado employers that laid off workers during the recession are facing steep hikes in their first-quarter unemployment-insurance taxes.

But about half of Colorado employers – those who didn’t engage in layoffs – are seeing rates stay flat or even decline, according to the Colorado Department of Labor and Employment.

The average rate or premium that employers will pay on the first $10,000 of wages has risen from 1.77 percent in 2009 to 2.48 percent percent for 2010, the department estimates. Next year and beyond, however, employers across the board can expect heftier rates to replenish an insolvent state-unemployment insurance trust fund.



“It is not a rosy picture,” said Tony Gagliardi, state director of the National Federation of Independent Business.

He said first-quarter increases at some companies were double or triple their past rates.



Industries that have downsized heavily, such as construction, are getting hit especially hard, but the blow wasn’t unexpected, said Michael Gifford, executive director of Associated General Contractors of Colorado.

Rate notices went out in November, and the state notified the public that the fund was insolvent in January, giving construction companies time to add the increases into contracts, Gifford said.

“It is unfortunate that it is coming at this time, when the construction industry is at a 25 percent unemployment rate,” he said.



By contrast, companies that didn’t let workers go aren’t seeing big changes in 2010.

“This year, our increases have been very moderate and will not impact our hiring decisions,” said Maggie Maxwell, regional human-resources director with Airgas Intermountain, which employs 211 in Colorado.

Rates for this year were set on June 30, when the unemployment-insurance trust fund still had $340 million in it.

By January, it was out of money and burning through $25 million a week, although that has since moderated to around $22 million, said Labor Department economist Michael Rose.

A $700 million gap between unemployment benefits paid and taxes collected last year depleted the fund, forcing the state to borrow $209.5 million from the federal government through last week to provide benefits.

For more of this Denver Post story http://www.denverpost.com/ci_14903257


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