The Rocky Mountain Employer

Blog

Labor and Employment Law Updates

Failure to Pay Wages is Now Criminal Theft in Colorado

Colorado Governor Jared Polis signed a law that classifies an employer’s failure to pay wages as “theft,” making it a criminal offense.FN1 Under the new law, which takes effect on January 1, 2020, any employer who willfully refuses to pay wages, or intentionally and falsely denies the amount or validity of a wage claim, commits criminal theft, which can be a petty offense, misdemeanor, or a felony if the amount is in excess of $2,000.00.FN2 Criminal penalties may be imposed in addition to already steep civil penalties.FN3

Under the new law, violators face criminal fines between $50.00 to $1 million, depending on the circumstances of the case and the amounts withheld.FN2 The new law eliminates the criminal penalty exemption for employers who cannot pay their employees due to Chapter 7 Bankruptcy or a court order limiting access to its assets.

Takeaway

In light of increased penalties and criminal charges, employers should review pay practices and financial projections to ensure future compliance with Colorado Wage laws—especially because employers cannot escape liability by claiming that financial conditions interfere with the ability to pay its workforce. Employers should further understand that time is of the essence when responding to a written demand for wages.

 

Footnotes:

FN1:   House Bill 19-1267, (signed May 16, 2019), http://leg.colorado.gov/sites/default/files/2019a_1267_signed.pdf

FN2:   Legislative Counsel Fiscal Note, HB 19-1267, http://leg.colorado.gov/sites/default/files/documents/2019A/bills/fn/2019a_hb1267_00.pdf.

FN3:Under the Colorado Wage Claim Act, employers must pay penalties of up to 125% of unpaid wages for amounts up to $7,500.00, and 50% of unpaid wages that exceed $7,500.00 if the employers do not pay an employee’s earned, vested, and determinable wages or compensation within fourteen days after a written demand is made. C.R.S. § 8-4-109(2)(b). For willful violations, penalties increase an additional 50%. Under the new law, employers found guilty of wage theft will be subject to additional criminal fines.