As we enter the fourth quarter of 2014, it serves as a useful reminder that two significant Colorado employment laws will be coming into effect on January 1, 2015. They are the Colorado Wage Protection Act of 2014 (WPA), which establishes new administrative procedures to adjudicate wage claims, and the Job Protection and Civil Rights Enforcement Act of 2013, which strengthens the remedies available to employees who prove causes of action under the Colorado Antidiscrimination Act (CADA). This article briefly summarizes each law.
Colorado Wage Protection Act (WPA):
As it stands now, former employees may make written demands to recover unpaid wages from their employers within 60 days of termination (possibly including penalties and attorney’s fees) or file complaints with the Colorado Department of Labor and Employment (CDLE). Currently, the CDLE has limited enforcement powers to recover unpaid wages. The WPA, however, expands available remedies to current employees and enhances the administrative and enforcement process for wage claims.
Under the WPA, current and former employees may make written demands for unpaid wages and compensation, including claims for state minimum wage violations, at any time wages are owed, including when they are still employed by their employers. The WPA creates a new administrative process that will apply to wage claims of $7,500 or less (exclusive of fines and penalties) earned on or after January 1, 2015. Employees will have two years, rather than 60 days, to submit complaints, and up to three years for willful violations.Wage claims can be initiated by filing a complaint with the CDLE or by filing in small claims court. Examples of common wage claims that will be subject to this process include: overtime, minimum wage, final pay, vacation pay, tipped employee wages, unpaid lunch periods, deductions from pay, and bonus and commission payments.
Upon receipt of a complaint, the CDLE will initiate an investigation by sending the employer a notice of the complaint. The employer must pay the amount claimed or submit a written response to the CDLE within 14 days from when the notice is sent. Employers who fail to respond within this tight deadline will be charged a $250 fine. Accordingly, it is critical for employers to review complaint and response procedures and train staff. The CDLE will issue a determination of whether wages are owed within 90 days of the notice of complaint and issue a citation and notice of assessment for any wages owed, plus any penalties and fines. Either party may appeal the initial decision to an administrative hearing. After a hearing, any party dissatisfied with a decision will be able to appeal the decision to the appropriate district court. The CDLE just issued proposed regulations governing this hearing process that are similar to those used in unemployment benefit claims. A public hearing on the WPA proposed rules has been scheduled for November 4, 2014. MSEC will attend the hearing and plans to deliver a special briefing session for our members on the details of the WPA’s proposed rules in
the near future.
The WPA also requires employers to retain payroll records for at least three years after payment of wages and to make such records available to both the employee and the CDLE upon demand. Employers must include all of the following information on employees’ itemized pay statements: gross wages earned, all withholdings and deductions, net wages earned, dates of pay period, name of employee or employee’s Social Security number, and employer’s name and address. Employers who violate this recordkeeping requirement may be fined up to $250 per employee, per month, up to a maximum fine of $7,500.
The CADA prohibits workplace discrimination based on protected status and covers any person employed by an employer (except domestic service and certain religious organizations or associations). Although the CADA covers more employers and establishes broader protections than federal law (e.g., sexual orientation), remedies for CADA violations are currently limited to lost wages, the value of lost benefits, and reinstatement. However, for claims accruing on or after January 1, 2015, the Job Protection and Civil Rights Enforcement Act of 2013 will permit employees to recover front pay, compensatory damages, punitive damages, and attorney’s fees. The cap on the combined amount of compensatory and punitive damages recoverable will be tied to employer size and ranges from $10,000 for employers with one to four employees up to $300,000 for employers with 501 or more employees.
Given the enhanced enforcement mechanisms and greater damages available to employees, including attorney’s fees, MSEC anticipates an increase in the number of wage complaints and discrimination charges filed with state agencies. Regarding the WPA, employers should review their pay and document retention practices, establish procedures governing the receipt of, and response to, complaints, and train impacted staff. Careful attention is required as technical violations, like late responses or failures to retain required documentation, can lead to financial penalties. Additionally, as the wage complaint process has been opened up to current employees, staff should be trained to prevent retaliation claims. Regarding the CADA amendments, employers should review their harassment and retaliation prevention policies and procedures, and invest in updated harassment prevention training for managers, supervisors, and employees.
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