Colorado Legislative/Regulation Update
By Michael Santo, Managing Attorney at Bechtel & Santo
Nearly a month after Colorado’s legislative session ended, a number of the employment bills that passed both houses still await the Governor’s signature. For example, HB22-1367, which slightly modifies Colorado’s Discrimination law, and HB22-1317, which concerns revisions to Colorado’s restrictive employment agreements statute (e.g., non-compete agreements), both are on the Governor’s desk awaiting his “Jared Polis” (it wouldn’t make sense, after all, for him to sign “John Hancock”).
So, while those bills await the Governor’s signature, the Governor has put his signature to a couple of key employment legislations. For example, on June 3, 2022, the Governor signed SB22-161, which is the Wage Theft Employee Misclassification Enforcement bill. In particular, this bill changes the procedure for deducting from an employee’s last paycheck property or money not returned by the employee prior to termination. That is, under current Colorado law, employers may enter into an agreement with their employees to provide the employer up to ten (10) calendar days after the employment separation to audit and assess any money or property that the employee must return to the employer. Current law permits employers, within those 10 days, to deduct the appropriate amount from employee’s final paycheck.
The Wage Theft Bill (SB22-161) modifies the procedural requirements for the deduction to be lawful. For example, upon taking the deduction, employers are going to be required to provide a notice to the employee that includes: (1) a written accounting of the amount of money or the value of property that the employee failed to properly pay or return to the employer; (2) the replacement value of the property in question; and (3) the date (if known) when the money or property was provided to the employee; and (4) when the employer believes the employee should have paid the money or returned the property to the employer. Then, the employee has 14 days to return the property or money claimed by the employer to be the basis for the deduction from wages. If that occurs, the employer must pay the employee the amount of the deduction within 14 days of employee’s payment or return of materials, as applicable. In sum, for those organizations that use wage-audit agreements and/or want to make deductions from a final paycheck, this new law changes those requirements.
Another bill that the Governor signed after the legislative session ended was SB22-234 – Concerning Unemployment Compensation.This bill made headlines for putting more than $600 million towards financially stabilizing the State’s Unemployment System from the State’s general fund. But something not as well reported was the change in procedures Colorado employers must now undertake when separating employment with an employee. That is, for the last couple of years, Colorado employers have been required to provide a notice to employees that informs them of the availability of unemployment insurance. This bill, now signed by the Governor, also requires employers to provide a separating employee: (1) the employer’s name and address; (2) the employee’s name and address; (3) the employee’s identification number or the last four numbers of the employee’s social security number; (4) the employee start date, date of last day worked, year-to-date earnings, and wage for the last week the employee worked; and (5) the reason the employee separated from the employer. So, make sure that you’re providing that information to all separating employees.
A final recent development concerns the federal Department of Labor’s proposal to remove the “demonstration state” designation from Colorado with respect to the Wagner-Peyser Act. As you know, the Wagner-Peyser Act provides funding for local, county workforce centers throughout the United States. The demonstration-state status has proven to be very successful for Colorado counties because it permits local areas to react and adapt more quickly to local market conditions. Governor Polis recently wrote a letter to the Department of Labor requesting that it not remove the demonstration status from Colorado, which is one of three states to have such a designation. If that demonstration-state status is removed, Colorado will still receive money under the Wagner-Peyser Act, but the concern is that the expenditure of that money will be more structured. So, it will be interesting to see if the Department of Labor permits Colorado to retain this status.
