Recent amendments to the Colorado Wage Act and the Colorado AntiDiscrimination Act impose increased penalties on employers for failing to properly pay all earned and unpaid wages to former employees and officially recognizes sexual orientation and gender identity as actionable forms of discrimination in Colorado. This article summarizes the changes to these two.
Increased employer penalties under the amended Colorado Wage Act
When an employee leaves his or her employment by choice or at the employer’s insistence, an employer must take immediate steps to ensure full payment of all earned and unpaid wages. On May 31, 2007, Governor Ritter signed House Bill 07- 1247, effective June 1, 2007, which amended the Colorado Wage Act, C.R.S. § 8-4-101 et seq., to create greater incentives for employers to promptly pay wages and other compensation due to current and former employees.
Under the new amendments to the Colorado Wage Act, employers who receive a written demand from an employee for unpaid compensation and who fail to tender the amount they believe in good faith is due, face stiffer penalties Further, if the court determines that there is a willful violation, employers face even greater penalties.
What do the amendments provide?
The amendments provide that employees can show a willful violation by presenting evidence of a prior judgment against the employer within the last five (5) years for failure to pay wages or compensation. Presumably, there may be other ways to show willfulness. Additionally, attorneys’ fees awards are now discretionary when they were previously mandatory, and are to be applied consistent with the courts’ interpretation of attorneys’ fee provisions in Title VII of the Civil Rights Act of 1964.
The statute of limitations for a claim under the Wage Claim Act remains unchanged—claims must be made within 60 days of the date of separation. Similarly unchanged is the rule that a discharged employee be paid all earned and unpaid wages immediately, but where an employee resigns, payment may be made on the next regular payday.
Where are the pitfalls?
Most employer pitfalls under the Colorado Wage Act arise from vacation pay, which has long been held by the courts to fall under the definition of “wages or compensation.” Employers who offer vacation benefits must pay out vacation pay in accordance with their written policy. Employers run into trouble when they fail to follow their written policies and deny payments to employees that were terminated for cause.
However, employers should take note that vacation benefits are not mandatory in Colorado. Thus, it is possible to draft a vacation policy that offers time off with pay, but does not allow employees to earn and accrue vacation “pay” that must be paid out upon separation. Employers often do not anticipate the potential financial hit associated with paying out on policies that allow employees to bank upwards of 180 vacation hours or more. A well-crafted policy can provide a great benefit to employees, but also minimizes the downside for employers upon separation.
Colorado Anti-Discrimination Act amended to protect sexual orientation, perceived sexual orientation, and gender identity
On May 25, 2007, Governor Ritter signed Senate Bill 25, effective August 8, 2007, which added the following new subsection to § 24-34-401 of the Colorado Anti-Discrimination Act:
- (7.5) “Sexual orientation” means a person’s orientation toward heterosexuality, homosexuality, bisexuality, or transgender status or an employer’s perception thereof.
- Other sections were also amended to add religion to protected categories and to carve out religious organizations or associations from the definition of “employer,” unless the religious organization is supported by public monies. These changes put Colorado among the more progressive states in protecting gay, lesbian, bisexual, transgender, “Need a cutline” and transsexual individuals in the employment arena.
- Notably, the definition of “harass” in the Act now includes sexual orientation.
- “Harass” means to create a hostile work environment based upon an individual’s race, national origin, sex, sexual orientation, disability, age, or religion.
Thus, it is important for employers to revise their harassment policies to include sexual orientation, as well as train their employees on this change to minimize future liability and take advantage of the potential safe harbor that can be created by having a clear, up-to-date harassment policy, which is understood by all employees and adhered to in the event of a complaint.
If you have any questions about the Colorado Wage Act or the Colorado Anti-Discrimination Act, or would like assistance in revising your employment policies and procedures, please contact Jennifer Gokenbach at jennifer.gokenbach@moyewhite.com