Effective August 5, 2008, Coloradoâ€™s SB 114 amended its law to require employee leasing companies to provide evidence of security of its unemployment tax withholding. This may be done with a surety bond, cash, or a letter of credit. The amount of the surety bond should equal half of the average annual amount of tax that was levied the previous year. For new companies, the companyâ€™s own estimate of 50% of the estimated projected taxable payroll for the current year multiplied by the standard tax rate will calculate the amount of the bond. If the company does not wish to provide a bond, cash, or a letter of credit, they may instead provide independently audited CPA prepared financial statements or evidence that a bonded and independent qualified assurance organization has accredited the company.
Eric is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry, he is also a contributing author to the surety bond blog.