Colorado Separation Notices
Employee separations include a host of complex tasks that range from communicative to administrative, and all involve some level of risk. Depending on the organization, HR assumes responsibility for managing separations, working to ensure compliance while making the exit experience as positive as possible.
Adding another layer to the already complicated process, the Colorado Department of Labor and Employment (CDLE) recently passed Senate Bill 22-234, requiring employers to provide written notice containing certain information to all separating employees.
What is a Colorado Separation Notice?
The Colorado Separation Notice is a state-mandated form the employer sends to the employee upon termination. The purpose of the separation notice is to inform the employee about unemployment benefits in Colorado, including who qualifies and how to apply. In addition, it includes company and employment information that the CDLE requests on the application. Many states mandate employers send a separation notice to employees; Colorado is one of those states.
What are the Colorado Separation Notice requirements?
Until recently, Colorado law stipulated that employers provide a separation notice to separating employees that included a statement that unemployment insurance benefits are available to unemployed workers who meet the eligibility requirements along with some additional contact information. However, the CDLE enacted a new law in May 2022. The new law requires employers to complete and share a specific Separation Notice with employees to make it easier for the employee to understand what they qualify for and apply for benefits.
The CDLE’s Separation Notice form includes the following fields:
The employee’s name and address
The employee’s SSN (last four digits) or ITIN
The employee’s start date and end date
The employee’s year-to-date earnings
The employee’s wages for their final week of work
The employer’s name and address
The employer’s FEIN
The reason for the separation
Is the employer required to send a Colorado Separation Notice to every employee upon termination?
Yes, in the state of Colorado, employers must provide notice, in electronic or hard copy format, to all separating employees alerting them that unemployment insurance benefits may be available.
If the employee resigns or retires, is the employer still required to send a Separation Notice to the employee?
Yes, CDLE requires that the Separation Notice be delivered to all separating employees, regardless of reason. The Separation Notice form offers four options: quit, layoff, discharge, or other, with the specification that employers give only one reason.
When should the employer send the Colorado Separation Notice to the employee?
While CDLE does not specify when to deliver the Separation Notice, Colorado law SB22-234 repealed the requirement that separating employees wait at least one week before becoming eligible for unemployment compensation. As such, employers should provide the form to the employee at the time of separation.
We received a Request for Separation Information from the Colorado Department of Labor and Employment. What should we do?
You received this request because a former employee filed for unemployment insurance benefits. The CDLE Unemployment Insurance Division wants to verify the information captured in the Separation Notice or ask for additional details about the separation. It is recommended that you respond to the request promptly and put in place a process to proactively send separation notices to employees in the future.
What happens if the Colorado Separation Notice is not provided or the information on the form is incorrect?
At this time, CDLE has yet to issue specific guidance on the penalties associated with SB 22-234. That said, explained in the legislative proposal that without this law or any government invention, employers would be responsible for restoring the state’s Unemployment Insurance Trust Fund through “significantly higher premiums and surcharges.” By not providing the required form or by sharing incorrect information, the employer could be subject to monetary penalties and/or imprisonment. Given the risks associated with employee separations, it is essential to be thoughtful, honest, and consistent throughout the process, including the completion of the Separation Notice form.
Want to automatically generate and send separation notices to your employees?
Onwards HR Workforce Compliance Platform dynamically generates state separation notices using data from your HCM platform and automatically delivers the separation notices to your employees. Your team gets time back in their day and your employees get the information they need to understand and apply for unemployment insurance.
