Changes to Colorado’s wage theft laws are set to take effect on January 1, 2023. The changes impose higher penalties on employers who commit a variety of wage-related offenses.
What should employers and employees be aware of going forward?
Late payment of wages
Employers who do not pay wages owed within 14 days of a written demand or civil action from an employee will face stiffer penalties. The penalty will increase to the greater of twice the value of the unpaid wages or $1,000. Previously, the penalty was 1.25 times the amount owed.
If the employee demonstrates that the employer’s failure to pay was willful, the penalty goes up to the greater of three times the value of unpaid wages or $3,000. Additionally, employees may make demands both individually and as a class.
Failure to pay after adverse decisions
Employers that do not pay amounts owed within 60 days of an adverse decision from the Division will owe a fine equal to 50% of the amount owed, an additional penalty to the employee of the greater of 50% of the amount owed or $3,000 and any money the employee paid as attorney fees to enforce the decision. The Division may also enforce the penalties by issuing administrative levies and liens.
Limitation on employer’s ability to recover attorney fees
Employers will only be able to recover their attorney fees in a successful wage theft defense if the employer pays the amounts demanded in good faith within 14 days of the demand and the employees recover less than what the employer paid.
These employee-friendly amendments to Colorado law should make it easier for employees to recover unpaid wages and make it more important for employers to ensure they respond promptly to wage demands.