The Colorado Department of Labor and Employment's notices to employers of claims for unpaid wages soon will be more like subpoenas than invitations from the government to resolve their workers' wage claims.
Starting January 1, 2015, the 2014 Wage Protection Act empowers the Division of Labor to adjudicate wage claims and impose fines and penalties on employers who fail to timely respond to its notices. The act also set aside money for enforcement, expands employee rights in additional ways, and applies to nearly every private employer in Colorado.
Here's a rundown on some of the key changes.
Administrative adjudication
Currently, the division helps terminated Colorado workers recover their earned compensation. The division typically contacts the employer by letter and attempts to resolve the dispute. If resolution is not reached, the employee may file a lawsuit.
Under the new law, the director of the division will notify the employer of the complaint and the employer must respond within 14 days or face fines. Unless the employer pays the full amount claimed within 14 days of the notice, the director will investigate the complaint and issue a determination within 90 days.
If the director determines that the employer owes wages, the law requires the director to issue a citation and assessment for the wages, plus fines and penalties. If the employer tenders the wages due within 14 days of the determination, the director may, but is not required to, waive or reduce the fines and reduce the penalties by up to 50 percent.
Any interested party may appeal the director's determination to a hearing officer selected by the director. If neither party appeals to a hearing officer and the employee does not file a court complaint, the director's determination becomes enforceable as a judgment upon filing it in court.
Either party may appeal a hearing officer's decision to a court.
Early notice of claim optional
The act eliminates an incentive in existing law for employees to notify their employers of a dispute within 60 days of the failure to pay wages. Beginning January 1, 2015, employees need not make a written demand on their employer to trigger application of a penalty. If an employee chooses to make a written demand before filing suit, the employer can avoid a penalty by paying, within 14 days, the amount the employer, in good faith, believes is due. If the employee later recovers more in an administrative or court proceeding, the penalty will apply. If the employee files suit without making a written demand, the employer can avoid the penalty only by paying, within 14 days, the full amount claimed in the action. Employees have up to two years after a failure to pay to file a complaint and the penalty accrues from the date the wages were owed.
Expanded claims and obligations
In addition to empowering the division to create and enforce a new administrative procedure for adjudicating wage claims of $7,500 or less, the law permits current as well as former employees to bring claims. The procedure will also apply to claims that employees received less than the minimum wage and, effective January 1, 2015, such employees will be able to recover attorney fees in addition to the unpaid wages and costs of suit.
Employers must maintain pay records for three years and provide copies to employees and the division on request. Violations trigger fines of $250 per employee per month up to a maximum of $7,500.
If an employer makes final wages available locally and an employee has not received the wages within 60 days of the date they were due, the employer must mail the check to the employee's last known address.
New remedies, fines and penalties
Beginning January 1, 2015, the division may fine employers (but not employees) $250 for each failure to timely respond to a division notice. Failing to testify or produce records in response to a subpoena from the division will be a misdemeanor, punishable by a $200 fine, 60 days in jail or both, and each day of a failure or refusal will be a separate offense. The division may collect fines and penalties through citation and notice of assessment without a hearing. Fines imposed by the division will be credited to a fund created to pay the division's costs.
Under the new law, the division is charged with developing specific regulations and to interpret and enforce the act. Proactive employers should audit their wage payment and recordkeeping practices and begin educating managers and supervisors now about the increased importance of responding promptly to wage complaints.
If they don't, it may come back to bite them.
Originally published by the Denver Business Journal.
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