Colorado: Wage Theft Amendments Enhance Employee Rights


All Employers with CO Employees


January 1, 2023 



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Colorado Senate Bill 22-161 amends the state’s wage theft laws by increasing penalties and adding additional enforcement methods for violations. The amendment addresses not only wage theft but also employee misclassification and deductions from final pay for unreturned company equipment. It also creates a new Worker and Employee Protection Unit under the control of the office of the Attorney General which can investigate and enforce wage theft, unemployment insurance, and misclassification claims.  


Penalties. Most notably, SB 22-161 increases the penalties employers must pay to employees if they do not pay wages owed within 14 days after an employee makes a written demand or files a civil action or administrative claim. As of January 1, 2023, employers who do not pay wages owed within 14 days of a demand will automatically pay the greater of two times the amount of the unpaid wages or $1,000. This is quite an increase from the original 1.25 times penalty. If the failure to pay was willful, the employer must pay the greater of three times the amount of unpaid wages or $3,000. All second or subsequent failures to pay within the 5 years preceding a claim are per se willful. Successful payments occurring within 14 days after the written demand will result in the employee being required to dismiss the claim. If the Division makes an adverse decision for failure to pay and the employer still has not paid within 60 days of that adverse decision, the employer will need to pay attorneys’ fees incurred to enforce the Division’s adverse action, a fine equal to 50% of the amount owed, and an additional penalty owed to the employee which is the greater of 50% of the amount owed or $3,000.  


The amendment also greatly reduces the ability for successful employers to recover attorney’s fees incurred in a civil action. Employers can only recover attorney’s fees if it has paid all the amounts demanded in good faith by all employees within 14 days of receiving the demand and if the employees ultimately recover less in the action than the amount the employer paid. Conversely the Division is now allowed to award attorney’s fees to employees who recover more than $5,000 in unpaid wages in an administrative claim.  


Unreturned company property. Additionally, Colorado employers will no longer be able to freely deduct the value of unreturned company property from final pay. Rather, in order to deduct from final pay, the employer must provide a notice to the employee within 10 days after separation which includes the specific property or amount of money the employee failed to return or pay, the replacement value of the property, when the property or money was provided to the employee, and when the employer believes the employee should have returned the property or paid the money. If the employee repays or returns the property within 14 days of the notice, the employer must return the amount of the deduction within 14 days of the receipt of money or property. 


Action Items 

  1. Read the bill here. 
  2. Review procedures for the timely payment of wages. 
  3. Review classification of employees and independent contractors. 
  4. Revise procedures for final pay deductions and prepare template notice of deductions. 
  5. Have appropriate personnel trained on the requirements. 
  6. 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. © 2022 ManagEase