Colorado § 8-73-110 - Other remuneration - severance pay - definitions.

§ 8-73-110. Other remuneration - severance pay - definitions.

(1) (a) The benefits for an individual who is separated from employment and receives a severance allowance must be postponed for a number of calendar weeks after separation from employment that is equal to the total amount of the severance allowance, divided by the individual's usual weekly wage. The postponement required by this subsection (1) begins with the calendar week in which the severance allowance was received. If the number of weeks does not equal a whole number, the remainder is disregarded. Notwithstanding section 8-73-107 (1)(f), any wages earned by an individual in a calendar week during postponement are disregarded.

(b) For purposes of this subsection (1), "individual's weekly wage" means an individual's usual or average wage earned in a representative number of calendar weeks.

(1.2) (Deleted by amendment, L. 2009, (HB 09-1076), ch. 408, p. 2248, § 1, effective June 2, 2009.)

(1.5) Repealed.

(1.6) (Deleted by amendment, L. 2009, (HB 09-1076), ch. 408, p. 2248, § 1, effective June 2, 2009.)

(2) An individual who has an award for any week and for which week he, at a subsequent date, received a pay award by reason of a decision of the national labor relations board or other source, as a result of the action taken by the national labor relations board or other source, shall immediately repay to the division such amounts as will reimburse the division for all benefit payments made for the period during which he drew benefits and for which the national labor relations board or other source has caused a payment to be made in the form of back pay award to the claimant; and the employer's account charged for such benefits shall be credited accordingly.

(3) (a) (I) Except as provided in subparagraph (II) of this paragraph (a), an individual's weekly benefit amount shall be reduced (but not below zero) by:

(A) (Deleted by amendment, L. 2009, (HB 09-1076), ch. 408, p. 2248, § 1, effective June 2, 2009.)

(B) The prorated weekly amount of a pension, retirement or retired pay, or annuity that has been contributed to by a base period employer; or

(C) The prorated weekly amount of any other similar periodic or lump-sum retirement payment from a plan, fund, or trust which has been contributed to by a base period employer.

(II) An individual's weekly benefit amount shall not be reduced when an individual receives a lump-sum retirement payment from a plan, fund, or trust that has been contributed to by a base period employer when all of the following conditions are met:

(A) The individual's separation from the employer awarding the payment is not due to a retirement pursuant to section 8-73-108 (4)(m) or (5)(e)(XXIII);

(B) The individual presents proof to the division within fourteen calendar days from date of claim or sixty calendar days of receipt of such lump-sum payment, whichever is later, that this total payment has been reinvested into an individual retirement account or Keogh plan, as defined in 26 U.S.C. sec. 408 or 26 U.S.C. sec. 401, and such proof establishes that the investment is for a duration of at least one year; except that such lump-sum retirement payment shall not be considered to be received by the individual until the entire balance has been so received. Should a portion of the payment be ineligible for reinvestment and the claimant presents proof that the total eligible portion has been reinvested, only the remaining uninvested portion will be prorated in accordance with subparagraph (III) of this paragraph (a).

(III) When an individual receives a lump-sum retirement payment from a plan, fund, or trust that has been contributed to by a base period employer and the payment does not meet all of the criteria established in subparagraph (II) of this paragraph (a), then the division shall postpone the individual's benefits for a number of calendar weeks equal to the gross amount of the lump-sum payment divided by the individual's full-time weekly wage. However, when an individual receives a lump-sum retirement payment from a plan, fund, or trust as described in this subparagraph (III), but only reinvests a portion of that payment as required in subparagraph (II) of this paragraph (a), or when an individual otherwise withdraws an amount from a plan, fund, or trust that is less than the total lump sum of the account, then the division shall consider only the portion that is received but not reinvested pursuant to subparagraph (II) of this paragraph (a) in determining the number of calendar weeks that the individual's benefits are postponed.

(IV) An individual's weekly benefit amount shall not be reduced by any amount of a primary insurance benefit under Title II of the federal "Social Security Act" that has been contributed to by a base period employer if the employee has made contributions to federal social security.

(b) (I) An individual who has applied for a retirement payment shall be entitled to receive, if otherwise eligible, the weekly benefit amount reduced by the prorated weekly amount of the estimated or reported amount of such retirement payment. When notice of the actual or confirmed amount of the retirement payment is received by the individual, he shall advise the division and the deduction will be adjusted accordingly.

(II) If the estimated amount of the retirement payment exceeds the amount of unemployment compensation to which the individual is entitled, he shall receive one payment equal to the minimum weekly benefit amount, as prescribed by section 8-73-102 (1), other provisions of articles 70 to 82 of this title notwithstanding.

(c) For purposes of this subsection (3), "lump-sum retirement payment" means the entire balance due the individual from the plan, fund, or trust that has been contributed to by a base period employer.

(4) An individual's weekly benefit amount shall not be reduced because of the receipt of military service-connected disability compensation payable under 38 U.S.C., chapter 11, by the federal veterans administration. An individual's weekly benefit amount shall be reduced because of the receipt of a military disability retirement pension based on previous work performed by the individual, the relationship to the level of prior remuneration, or the length of service.

(5) Individuals who receive compensation for temporary disability under the workers' compensation law of any state or under a similar law of the United States shall be entitled to receive benefits for a corresponding week, if otherwise eligible, reduced by the amount of the temporary disability compensation unless the temporary disability amount has already been reduced by the unemployment insurance benefit amount.

(6) Individuals who receive sick pay benefits or other similar periodic cash payments paid to the worker by a base period employer or from any trust or fund contributed to by a base period employer shall be entitled to receive benefits for a corresponding week, if otherwise eligible, reduced by the amount of such sick pay benefits or other similar periodic cash payments.

(7) Repealed.

(8) (Deleted by amendment, L. 2009, (HB 09-1076), ch. 408, p. 2248, § 1, effective June 2, 2009.)

Source: L. 36, 3rd Ex. Sess.: p. 19, § 5. L. 37: p. 1255, § 3. CSA: C. 167A, § 5. L. 41: p. 766, § 5. L. 49: p. 722, § 3. L. 53: p. 624, § 5. CRS 53: § 82-4-12. L. 55: p. 533, § 2. L. 57: p. 518, § 6. L. 59: p. 564, § 6. L. 63: p. 679, § 6. C.R.S. 1963: § 82-4-10. L. 65: p. 843, § 6. L. 69: p. 671, § 6. L. 72: p. 450, § 1. L. 76: (4) and (5) amended, p. 348, § 13, effective October 1. L. 79: (3)(a)(I) amended, p. 351, § 13, effective September 30. L. 81: (3), (4), and (5) R&RE and (6) added, pp. 511, 512, §§ 2, 3, effective July 1. L. 83: (7) added, p. 430, § 4, effective June 3. L. 84: (1)(c) amended, p. 323, § 3, effective July 1. L. 85: (3)(a) amended, p. 368, § 5, effective July 1. L. 86: (1)(c) repealed, p. 547, § 12, effective May 28; IP(1), (3)(a), and (6) amended and (1.5) and (8) added, p. 543, § 7, effective July 1. L. 86, 2nd Ex. Sess.: IP(1) and (1.5) amended, (1)(c) RC&RE, and (1.2) and (1.6) added, p. 55, §§ 2, 1, effective August 15; (1.5) repealed, p. 55, § 2, effective September 1, 1986. L. 87: (3)(a) amended, p. 410, § 1, effective April 16. L. 88: (5) amended, p. 389, § 2, effective June 11. L. 90: (3)(a)(II)(B) amended and (3)(c) added, p. 613, § 1, effective March 16; (5) amended, p. 557, § 10, effective July 1. L. 92: (3)(a)(II)(B) and (3)(b)(I) amended, p. 1795, § 4, effective April 10. L. 96: (1) and (1.6) amended, p. 27, § 1, effective March 13. L. 2000: (3)(a)(I) amended, p. 1393, § 1, effective October 1. L. 2009: (1), (1.2), (1.6), (3)(a)(I)(A), and (8) amended and (3)(a)(IV) added, (HB 09-1076), ch. 408, p. 2248, § 1, effective June 2. L. 2013: (3)(a)(III) amended, (HB 13-1054), ch. 92, p. 295, § 1, effective April 4. L. 2020: (1)(a) amended, (SB 20-170), ch. 297, p. 1478, § 2, effective January 1, 2021.

Editor's note: Subsection (7)(b) provided for the repeal of subsection (7), effective July 1, 1984. (See L. 83, p. 430.)

Cross references: For Title II of the "Social Security Act", see 42 U.S.C. § 401 et seq.

ANNOTATION

Law reviews. For article, "Administrative Law", which discusses Tenth Circuit decisions dealing with the offset of unemployment compensation by social security benefits, see 64 Den. U. L. Rev. 122 (1987).

"Wages in lieu of notice" disqualify employee for benefits. This section disqualifies an employee for benefits for any week with respect to which he is receiving or has received remuneration in the form of wages in lieu of notice. Indus. Comm'n v. Sirokman, 134 Colo. 481, 306 P.2d 669 (1957).

But separation allowance for periods of employment prior to separation are not "wages in lieu of notice". Where "wages received as separation allowance" were received with respect to periods of employment which were prior to the separation, and not with respect to periods of time or weeks subsequent thereto, the allowance cannot be considered to be "wages in lieu of notice". Indus. Comm'n v. Sirokman, 134 Colo. 481, 306 P.2d 669 (1957).

Payments from the public employees' retirement association fund are payments from a fund contributed to by an employer under subsection (3)(a), which deals with unemployment benefits. Johnson v. Div. of Emp., 191 Colo. 38, 550 P.2d 334 (1976).

On appeal from a decision denying the application of claimant for unemployment compensation benefits by reason of leaving state employment, supreme court held that the interpretation of payments from the public employees' retirement association fund as payments from a fund contributed to by an employer did not deny equal protection although claimant could have taken a lump sum refund of her public employees' retirement association contributions and thus would not be receiving retirement "pay" or "payments" within the meaning of this section and would have been entitled to unemployment compensation, since neither suspect classifications nor the infringement of fundamental rights were involved and the statutory discrimination had some reasonable basis. Johnson v. Div. of Emp., 191 Colo. 38, 550 P.2d 334 (1976).

Where claimant for unemployment compensation benefits was employed in state service for 28 years, she was compelled to retire at the age of 57 because her husband's health required a move to a warmer climate, she elected to receive retirement benefits on a reduced annuity basis, and the benefits were paid to her in monthly installments of $460, the claimant's claim was correctly denied on the basis of subsection (3)(a). Johnson v. Div. of Emp., 191 Colo. 38, 550 P.2d 334 (1976).

Legislative intent in enacting subsection (3) was to match Colorado pension-offset provisions exactly to the federal model. Edwards v. Valdez, 602 F. Supp. 361 (D. Colo. 1985); Redin v. Empire Oldsmobile, Inc., 746 P.2d 52 (Colo. App. 1987); Cericalo v. Indus. Claim Appeals Office, 114 P.3d 100 (Colo. App. 2005).

Where claimant receives social security disability insurance (SSDI) benefits, subsection (3)(a)(I)(A) requires a claimant's unemployment benefits to be reduced or offset by half the amount of the SSDI benefits. Cericalo v. Indus. Claim Appeals Office, 114 P.3d 100 (Colo. App. 2005).

Because subsection (3)(a)(I)(A) applies the offset both to individuals receiving SSDI benefits and to individuals receiving retirement benefits, it does not discriminate on the basis of disability. Cericalo v. Indus. Claim Appeals Office, 114 P.3d 100 (Colo. App. 2005).

Offset in subsection (3) should be applied only when a claimant is retired or is retiring at the termination of his employment, and the retirement benefits contributed to by the employer are in fact immediately available for utilization by the employee. Redin v. Empire Oldsmobile, Inc., 746 P.2d 52 (Colo. App. 1987) (decided prior to 1987 amendments).

In subsection (3)(a)(I)(B), benefits are offset by any pension benefits contributed to by a base period employer, regardless of when the contributions were made. There is no implied requirement that the contributions be made during the base period. Therefore, a claimant who was previously employed by the base period employer, but as to whom the base period employer did not make contributions during the base period to the retirement fund, is subject to the offset. Indus. Claim Appeals Office v. Colo. Dept. of Labor, 2013 CO 52, 307 P.3d 1093.

The state of Colorado and the state unemployment commission are not liable if the unemployment insurance fund runs dry. Edwards v. Valdez, 602 F. Supp. 361 (D. Colo. 1985).

Policy of this section is to prevent "double dipping" by persons who are retired or are retiring at the termination of their employment. Redin v. Empire Oldsmobile, Inc., 746 P.2d 52 (Colo. App. 1987).

Severance allowance interpreted. Payments received by employee which were based upon length of services and current salary constituted a severance allowance. Bockmon v. Mtn. States Tel. & Tel., 739 P.2d 887 (Colo. App. 1987).

But a lump sum payment made to the employee in consideration of the employee's release of all common law and statutory claims against the employer does not constitute a severance allowance and does not reduce the employee's right to unemployment compensation. Moore v. Digital Equip. Corp., 868 P.2d 1170 (Colo. App. 1994).

A lump-sum payment the primary purpose of which was not to obtain a release of claims but to provide additional compensation after separation constituted a severance allowance. Pero v. Indus. Claim Appeals Office, 46 P.3d 484 (Colo. App. 2002).

Applied in Hartman v. Freedman, 197 Colo. 275, 591 P.2d 1318 (1979); Schmidt v. Indus. Comm'n, 42 Colo. App. 253, 600 P.2d 76 (1979); Green v. Indus. Claim Appeals Office, 765 P.2d 1064 (Colo. App. 1988); Laszar v. Indus. Claim Appeals Office, 230 P.3d 1263 (Colo. App. 2009).