November 2024

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Colorado requires notice before certain deductions from wages

8/4/22

Author: ADP Admin/Tuesday, August 2, 2022/Categories: Compliance Corner , State Compliance Update, Colorado

Colorado has enacted legislation (Senate Bill 161) that amends the state’s wage theft law. It requires employers to provide notice to an employee before deducting from their pay for money or property the employee failed to return or repay upon termination of employment.

The Details:

Effective August 9, 2022, employers must provide notice to an employee before deducting from their wages for failing to return company property or failing to repay money to the employer upon termination of employment. The notice must be provided within 10 days of the termination of employment and include a written account that specifies:

  • The amount of money or the specific property involved;
  • The replacement value of the property; and
  • To the extent known, when the money or property was provided to the employee and when the employer believes the employee should have returned or repaid it.

If the employee returns/repays the money/property within 14 days of the employer providing the notice, the employer must then pay the employee the deducted amount within 14 days.

Anti-Retaliation Provisions Amended:

Effective August 9, 2022, the state’s wage theft law’s anti-relation provisions are amended to prohibit employers from taking adverse action against any employee who has:

  • Filed any complaint or instituted any proceeding under the state’s wage theft law or any other law or rule relates to wages or hours.
  • Testified or provided other evidence, or may testify or provide other evidence, in any proceeding on behalf of the employee or another person regarding afforded protections under the state’s wage theft law or any other law or rule related to wages or hours.

Other Changes:

Senate Bill 161 makes significant changes to enforcement procedures and penalties for employers that fail to pay wages and past-due wages to employees. For example, effective January 1, 2023, Senate Bill 161 allows the recovery of attorney fees, an additional fine of 50 percent of the amount of past-due wages, and a penalty of the greater of 50 percent of past-due wages or $3,000 from an employer that fails to pay an employee past-due wages within 60 days after the determination in favor of the employee. See the text of the law for details on these and other changes.

Next Steps:

  • Ensure compliance with the notice requirements before making covered deductions.
  • Train anyone involved in the termination process on the new notice requirement and timeframes for compliance.
  • Review the new enforcement procedures and penalties contained in the law.

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