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Recent changes to the requirements for a separation notice

On Behalf of | Dec 29, 2022 | Employment Law

Thanks to important changes to Colorado’s employment laws, employees receive better protection in matters of non-compete agreements, wage theft, misclassification and more. One particular change under Senate Bill 22-234 deals with the administration and funding of unemployment benefits.

Under this new law, employers must provide employees with the reason for separation at the termination of employment along with the information needed for unemployment benefits. This reason influences the receipt of benefits as well as identifies potential grounds for wrongful termination.

Required documentation

An employer must present an employee with the following written information at the time of separation.

  • The name and address of the employee
  • The name and address of the employer
  • The employee’s last four digits of their social security number or workplace ID number
  • The employee’s start and end date, year-to-date earnings and wage totals for the final workweek
  • The reason for the separation

The Colorado Department of Labor and Employment requires this information for processing unemployment applications. However, there is a legal risk for employers when issuing the details concerning the reason for separation.

Reading between the lines

Employers often make termination decisions using general terms and include elements like a waiver of legal claims or a non-compete clause on the separation agreement to reduce the threat of litigation. However, the details listed as the reason for separation are an important component of understanding whether or not there are grounds for litigation. Paying attention to this reason helps determine if wrongful termination occurred.

Termination from a job does not relieve an employer of their legal responsibilities to the employee. This includes presenting accurate information on the employee’s form for unemployment insurance benefits.