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New Legislation Impacting Wage Claims

On May 29, 2014, Governor Hickenlooper signed into law, Senate Bill 14-005, which is also called the Wage Protection Act. This bill authorizes the Colorado Department of Labor ("CDLE") to develop an administrative process to handle wage claim cases. Wage claim cases consist of a variety of grievances including but not limited to: violations of minimum wage laws, failure to pay overtime wages, forcing workers to work off the clock, withholding a worker's final paycheck, withholding gratuity from tipped workers, failing to provide required paid breaks or unpaid lunch periods and complete non-payment for labor performed.

The current Colorado law concerning payment of wages is the Colorado Wage Act C.R.S. § 8-4-101 et. seq. This Act requires that, "all earned, vested and determinable amounts for labor or service performed by employees, regardless of the method of calculation," must be paid to the employee. Currently, the CDLE is required or authorized to conduct investigations and perform inquiries regarding alleged violations of the Wage Act. Yet the CDLE lacks the authority to penalize employers who violate the law, and it has no further course of action if the employer simply ignores the investigation. If the CDLE is unsuccessful in resolving the matter, an employee's only option is to pursue their lost wages in a civil action.

The new law will go into effect on January 1, 2015, and requires employers to maintain records reflecting information in an employee's pay statement for at least three (3) years after payment of the wages. The new law will also require employers to make those records available to the employee as well as the CDLE, and authorizes the executive director of the CDLE to impose a fine on any employer who fails to retain or make those records available. The bill also requires an employer to mail a check for wages to the employee's last-known address within sixty (60) days after the check was due if the employer is unable to otherwise deliver the check to the employee. Most importantly, the new legislation authorizes the director of the division to establish an administrative procedure to process wage claims under $7,500.00 for wages earned on and after January 1, 2015. This procedure allows the division to adjudicate the wage claim, as well as issue citations and notices of assessments for the amounts due. The division has ninety (90) days after notice of a complaint to issue a determination; either: 1) dismissing the complaint or, 2) issuing a citation including all wages and compensation owed, penalties and fines.

For the employer, the fine will be determined by the hearing officer but cannot exceed a sum of fifty dollars ($50) per day for each such failure to pay each employee, starting on the date that such wages first become due and payable. Similarly, the division may impose a fine of two hundred fifty dollars ($250) on each employer who fails to respond to a notice of complaint or to any other kind of notice from the division to which a response is required. The fines obtained from employers will be placed in a general fund and used to offset the costs of implementing these new rules.

The applicable penalties will not change. For non-payment of wages, the fine is one hundred twenty-five percent (125%) of the wages up to $7,500.00 and fifty percent (50%) of the wages that exceed $7,500.00. If the employer's failure to pay is willful, the amount shall increase by fifty percent (50%).

The determination by the CDLE can be appealed to a hearing officer. The hearing officer's determination can also be appealed in court. Further, an employee dissatisfied with a decision may commence a new civil action in any county or district court of competent jurisdiction. Similarly, an employee is not required to go through the process and it is not a prerequisite for filing a lawsuit. Ultimately, this new law should provide an alternative to the court system for employees seeking to recover wages under $7,500.00 from an employer.

If you have a question about unpaid wages, contact us at to discuss your legal rights.

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