Employment law – Colorado Wage Claim Act
When an employee quits or resigns, the wages or compensation are due and payable upon the next regular payday. When the employer causes the discharge, wages are due and payable immediately. The law allows an employer which has its accounting done off site twenty four hours to pay last wages.
An employer may deduct from wages for theft if a report has been filed with the proper law enforcement agency in connection with such theft. This does not authorize the employer to withhold wages simply because its own investigation led it to conclude there was theft.
Under the Act, every employer must at least monthly, or at the time of each payment of wages, furnish to each employee an itemized pay statement in writing showing gross wages earned, all deductions, net wages earned, and the employer’s name and address.
The Act provides significant penalties against employers who do not pay wages when due. A 125% penalty applies to the first $7,500 in unpaid wages. So, if an employer fails to pay $1,000, it can liable for the wages plus $1,250 in penalties. If the employee can prove the failure to pay was “willful”, the penalty can be increased by 50%. So, an employee with $1,000 in unpaid wages could recover $2,875 – $1,000 wages, $1,250 in penalties, and $625 in additional penalties for willful failure to pay.
The Act allows the court to award attorney fees to either the employer or the employee, so suing for wages is not risk free for an employee. Whether to award fees is discretionary with the judge. An award of fees to the employee is more likely if the employer does not tender any wages in response to the employee’s demand. If the dispute is about the amount of wages due rather than an argument whether any wages are due, a careful employer will offer the employee what the employer thinks it owes, in order to minimize the risk of paying attorney fees.