Colorado § 8-79-102 - Collection of premiums and surcharges, benefit overpayments, penalties, and interest - rules.

§ 8-79-102. Collection of premiums and surcharges, benefit overpayments, penalties, and interest - rules.

(1) The division shall institute such practices and procedures as it deems necessary to collect any money due the division in the form of delinquent premiums, surcharges, or overpaid benefits, including all penalties and interest thereon. In the case of overpaid benefits, the division may, in addition to instituting collection procedures, withhold subsequent benefit payments to which the claimant is or becomes entitled and apply the amount withheld as an offset against the overpayment. However, any amount withheld shall not exceed twenty-five percent of a claimant's benefit payments except in those cases where overpayments have occurred on an established current claim or as a result of false representation or willful failure to disclose a material fact.

(2) Repealed.

(3) If, after due notice, any employer or claimant defaults in any payment of premiums or surcharges, the repayment of overpaid benefits, or the payment of any interest or penalties thereon, the amount due may be collected by civil action, which shall include the right of attachment in the name of the division. Court costs shall not be charged to the division, but any employer or claimant against whom judgment is taken shall be charged with all costs of such action. All costs collected by the division shall be paid into the registry of the court.

(4) The collection efforts of the division shall be in accordance with subsection (1) of this section; except that, in instances involving willful violation of any provision of articles 70 to 82 of this title, or if deemed appropriate by the director of the division, the division may seek relief under subsection (3) of this section.

(5) (a) Notwithstanding any other provision of this title, the division shall charge an employer's account for an improper payment from the unemployment compensation fund if the division determines that:

(I) The payment was made because the employer, or an agent of the employer, was at fault for failing to respond timely or adequately to the request of the division for information relating to the claim for compensation; and

(II) The employer or agent has established a pattern of failing to respond timely or adequately to such requests.

(b) The division shall promulgate rules to specify what factors and frequency constitute a pattern of failing to respond timely or adequately for purposes of enforcing this subsection (5).

Source: L. 36, 3rd Ex. Sess.: p. 44, § 14. CSA: C. 167A, § 14. L. 39: p. 578, § 11. L. 41: p. 794, § 14. CRS 53: § 82-9-2. C.R.S. 1963: § 82-9-2. L. 81: Entire section amended, p. 504, § 21, effective July 1. L. 83: Entire section R&RE, p. 431, § 10, effective June 3. L. 85: (1) amended, p. 368, § 6, effective July 1. L. 2009: (1) and (3) amended, (HB 09-1363), ch. 363, p. 1905, § 28, effective July 1. L. 2013: (5) added, (HB 13-1124), ch. 97, p. 312, § 1, effective August 7. L. 2021: (2) repealed, (SB 21-055), ch. 12, p. 75, § 6, effective March 21; (4) amended, (SB 21-266), ch. 423, p. 2795, § 5, effective July 2.

ANNOTATION

The amount that may be assessed against a person by this section is a collection fee and thus dischargeable in bankruptcy. In re O'Brien, 110 B.R. 27 (Bankr. D. Colo. 1990).

Once the department of labor and employment determined that it had overpaid benefits and that the bankruptcy debtor had obtained those overpayments by false representation and/or willful failure to disclose material facts, subsection (1) allowed it to withhold subsequent benefit payments to which the claimant became entitled and apply the amount withheld as an offset against the overpayment in addition to instituting collection procedures. In re Adamic, 291 B.R. 175 (Bankr. D. Colo. 2003).

The department's determination that the debtor had received overpayments circumscribed, or limited, any future claims for benefits, permitting outright denial of benefits and a recoupment of the amount of the overpayments. In re Adamic, 291 B.R. 175 (Bankr. D. Colo. 2003).

The department is entitled to recoup earlier overpayments from debtor's current claim for benefits without violating an automatic stay. In re Adamic, 291 B.R. 175 (Bankr. D. Colo. 2003).

Overpaid unemployment compensation obtained by "false pretenses, a fraudulent representation, or actual fraud" are nondischargeable under 11 U.S.C. § 523(a)(2)(A) of the federal bankruptcy code. In re Wine, 558 B.R. 438 (Bankr. D. Colo. 2016).

And penalties arising from the overpaid unemployment compensation obtained by false pretenses, a fraudulent representation, or actual fraud are nondischargeable under 11 U.S.C. § 523(a)(2)(A) to the same extent as the restitutionary debt for overpaid unemployment compensation. In re Wine, 558 B.R. 438 (Bankr. D. Colo. 2016).

A collection fee under subsection (2) is not "a fine, penalty, or forfeiture", therefore, it is dischargeable under 11 U.S.C. § 523 (a)(7). It is compensation for actual pecuniary loss. In re Martinez, 609 B.R. 351 (Bankr. D. Colo. 2019).