Colorado: Employers Can Face Potential Criminal Charges for Wage Violations

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All FLSA Employers with CO Employees

EFFECTIVE

January 1, 2020

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Employers who commit wage theft may be subject to increased penalties mandated in Colorado’s criminal theft statute, because HB19-1267 recently redefined “wage theft” as “criminal theft.” Specifically, willfully refusing to pay wages or falsely denying the amount of a wage claim is considered misdemeanor petty theft. If the wage amount is over $2,000, the violation is felony theft. By treating wage theft as a criminal act, employer fines (currently at $300 for failure to pay wages, or $500 for failure to pay minimum wage) could range from $50 to $1 million, depending on the circumstances of the crime.  This bill applies to all employers who are subject to the Fair Labor Standards Act (FLSA).

Interestingly, the bill states that an employee is defined based on (1) the degree of control the employer may or does exercise over the person, and (2) the degree to which the person performs work that is the primary work of the employer. Employers must take care to review independent contractor relationships based on the definitions in the bill to avoid potential exposure.

Additionally, the current exemption from criminal penalties, for employers who cannot pay wages due to Chapter 7 bankruptcy or court actions limiting control over the employer’s assets, has been removed; so employers are still liable to pay employee wages even under limiting financial conditions.

Action Items

  1. Review the bill here.
  2. Review pay practices with legal counsel for compliance with local and state regulations.
  3. Have independent contractor relationships reviewed by legal counsel for compliance.
  4. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2019 ManagEase

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