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Payment Of Wages

Employers who fire employees – especially if those employees have done something particularly disruptive, such as steal or damage property – often are ticked off. They may be tempted to withhold wages as a result. That is a very foolish thing to do and tremendously boosts chances that a terminated employee will create problems for you. You absolutely have to pay employees, no matter how irritated you must be with them. It’s not simply the right thing to do; it’s also legally required.

The primary legislation that covers this area is the Colorado Wage Claim Act. It covers many employment issues, but one thing it makes very clear is that an employee may not waive his or her rights. For example, any employment contract that says an employee agrees to receive less than minimum wage is void, and an employer who tries to get an employee to do such a thing will face serious consequences.

Under the Act, the following also is required:

  1. Employers must pay an employee no less than once every calendar month.
  2. Tips, gratuities and other presents to employees belong to them unless the employer makes it very clear to the public that such tips belong to the employer. An employer who violates this is subject to both civil and criminal penalties.
  3. When an employee is terminated, all wages must be paid immediately. However, severance pay is never required unless it has been contracted for. When an employee resigns, he or she must be paid by the next regular pay period. An employee who has not been properly paid wages should make a written demand for wages within 60 days from termination or resignation. The employer will then have 14 days to satisfy the demand for wages. If the employer fails to do so within the 14 days, he or she will be liable for a penalty of the greater of 125% of the first $7,500 of wages due plus 50 percent of any wages due above $7,500, or the employee’s wages for each day, up to 10 days, “until such payment or other settlement satisfactory to the employee is made.” C.R.S. 8-4-109(3). If employer’s failure to pay is willful, then penalty is boosted by 50%. Employees should be careful too, though. If an employer makes an offer to pay wages that the employee rejects and then the employee sues, then he or she will have to pay the employer’s attorney fees and other costs if the employee fails to recover more than what the employee rejected. These penalties apply to the employer, too, if an employee recovers more than what the employer was offering. The long and short of it is that employers are advised to pay the wages they should.
  4. Employers may not retaliate against employees who have brought a claim under the Colorado Wage Claim Act. Employers who do so are subject to civil and criminal penalties.
  5. Under an enforcement action by the Colorado Division of Labor, an employer who doesn’t have a good faith justification for paying wages may be ordered to pay a penalty of up to $50 per day for each day the employer continues to refuse to pay. Any money the Division of Labor collects goes to the state general fund rather than to the employee directly. C.R.S. 8-4-120. Plus, an employer may be subject to criminal penalties under C.R.S. 8-4-114(2).

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