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Colorado Amendments Its Wage Theft Law

Colorado has amended the state’s wage theft laws with the enactment of Senate Bill 22-161. The amendments include increased penalties for employers that do not timely pay wages, allows employees to demand wages in a class action manner, permitting the Colorado Department of Labor and Employment’s Division of Labor Standards (CDLE) to investigate these demands on a class wide basis; and limits an employer’s ability to successfully recover attorney’s fees. These changes become effective on January 1, 2023.

In addition, effective August 10, 2022, the amendments also impose additional requirements on employers to be able to deduct from an employee’s final pay for the value of unreturned company property by requiring that advanced notice be given to individuals before making a deduction from the wages of a terminated employee for their failure to repay or return property to the employer when the employee was entrusted with the collecting, disbursing, or handling of either.

The notice must be given within 10 calendar days after terminating the employee and include:

  • The amount of money or the specific property that the employee did not repay or return;
  • The replacement value of the property; and
  • If known, when the money or property was provided to the employee and when they should have repaid or returned it.

Certain terms and conditions apply where employees can return the money or property, subsequent to termination and employer deduction, and get repaid; however, this exception is not required if the employee’s repayment was insufficient.

Next Steps for Employers

Employers will need to develop a compliant notice to be provided to an impacted employee before deducting from final pay for unreturned company property. Employers should also ensure that they respond in a timely manner to any employee demands for payment of wages or any investigation by the CDLE, and in the event the CDLE issues an adverse determination against an employer, the employer should timely pay any money owed to avoid increased penalties and enforcement.

Employers should also consult legal counsel any time they are party to a wage dispute.

HR Works, headquartered in Upstate New York, is a human resource management outsourcing and consulting firm serving clients throughout the United States for over thirty years. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.