New Recordkeeping, Termination Pay Requirements to Take Effect in Colorado

Author: Rena Pirsos, XpertHR Legal Editor

August 27, 2014

New pay-related recordkeeping and termination pay requirements will go into effect in Colorado on January 1, 2015, under the recently enacted Wage Protection Act of 2014.

Recordkeeping Requirements

The Act requires employers to keep records of the information on employees' pay statements for at least three years after the wages were due. Employers must make these records available to employees and the state Department of Labor and Employment (DOLE) for inspection and copying. An employer that does not maintain the records or make them available may be fined up to $250 per employee, per month, up to a maximum of $7,500.

Requirements on Termination

If an employee is terminated, the Act requires the employer to mail the employee's last check to his or her last known mailing address, if the employee's wages are available at the worksite or the employer's local offices, and the employee has not received the wages within 60 days after the date of termination. An employee will no longer be required to make a written demand for payment on an employer within 60 days before nonpayment penalties will apply.

In addition, if a terminated employee demands payment of his or her final wages, the employer must comply within 14 days. If the employer does not comply, it may be liable to the employee for the unpaid final wages and penalty wages equal to the amount of unpaid wages, or up to10 days' worth of the employee's average daily wages, whichever amount is greater. The daily earnings penalty does not start to accrue until the employer receives the employee's written demand.

The employer may make the final payment by check or direct deposit, so long as the employee has not revoked his or her direct deposit authorization. The employer also may make the final payment by direct deposit to the account specified in the employee's demand, even if the employee has not previously authorized direct deposit. However, the employer is not required to do so.

If the unpaid wages do not exceed $7,500, the DOLE may establish an administrative procedure to receive the complaints of current and former employees. If an employer receives such a complaint but does not answer it, the employer will be fined $250. To encourage compliance, an employer that pays an employee within 14 days after receiving a DOLE citation and notice of assessment may have fines waived or reduced, and penalties may be reduced by up to 50 percent.