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January 19, 2023
Colorado employers ringing in 2023 have some additional items to check off their to-do lists to ensure they are fully compliant with obligations under the state’s new employment laws. While January 1 has come and gone, it is of critical importance that all Colorado employers are set up for success in the new year with the appropriate policies and processes in place to abide by these new laws.
Proposition 118
In November 2020, by ballot measure, the people of Colorado voted to enact Proposition 118. This law creates an insurance fund to enable Colorado employees to take paid family and medical leave. Funded by payroll contributions from both employers and employees, this law creates an expansion of benefits. With very few exceptions, Colorado employers will be required to fund at least 50% of the obligation with the remaining amount, up to 50%, to be paid by the employee through payroll deductions. While the law passed in 2020, January 1, 2023 marked the beginning of mandatory payroll deductions from employees and contributions from employers. Employers must remit payments of the required premiums to the state of Colorado on a quarterly basis, with the first payment due on March 31, 2023.
After a year of contributions, beginning January 2024, employees will be eligible to receive up to 12 weeks of leave paid at 90% of their weekly wages (capped at $1,100 per week) to:
Under Proposition 118, employees are entitled to their health benefits for the duration of the necessary leave. However, they still must pay their portion of the health premium. This law creates a significant expansion of rights for employees above and beyond the right to protected, but unpaid, leave under the federal Family and Medical Leave Act. Colorado employees will be entitled to leave and to payments as set forth under the law if they have earned at least $2,500 over the previous year for work performed in Colorado for any employer. The law also provides protection from retaliation or interference with an employee’s use of the leave.
Proposition 118 does, however, provide for certain narrow exemptions. Self-employed individuals are not subject to the requirements. Additionally, employers with nine or fewer employees do not have to pay their contribution. However, they still must withhold the employee’s portion. Similarly, local governments can decline participation in the program. However, their employees have the option to opt in to pay their portion. Finally, any employer that already offers paid leave benefits that are equal to or greater than those offered under the law may be exempt from the requirements following an appropriate showing. Ultimately, it is important that employers understand the various nuances of the law and have processes in place to ensure compliance.
2022 Colorado SB 161
January 1, 2023 also brought new obligations for Colorado employers under Colorado’s existing wage theft laws. While Colorado law has historically allowed employers to deduct the value of unreturned company property (i.e., office equipment) from an employee’s final pay, revisions to the law now require that the employer provide, within ten days of separation from employment, notice to the employee containing (1) a written accounting of the amount of money or the specific property that the employee failed to return; (2) the replacement value of the property; (3) when the money or property was provided to the employee; and (4) when the employer believes the employee should have returned the property or paid the money. If the employee returns the property or pays the money within 14 days of the employer’s notice, the employer must pay back the amount withheld within 14 days of receipt of the property or money.
Relatedly, employers who fail to pay wages owed to an employee within 14 days of a written demand, filing of a civil action, or filing of an administrative claim, will now be subject to an automatic penalty of the greater of (1) two times the amount of the unpaid wages or compensation; or (2) $1,000. Moreover, if the employee can show that the refusal to pay was willful, the penalty increases to the greater of (1) three times the amount of the unpaid wages; or (2) $3,000. Similarly, employers that do not pay within 60 days of receiving an adverse decision will be exposed to additional liability, including the employee’s attorney’s fees, a fine payable to the Division of Labor Standards and Statistics equal to the 50% of the amount owed, and an additional penalty payable to the employee. These changes increase the previously existing penalties for similar violations.
Navigating the ever-changing framework of employment law can be challenging. Please feel free to contact us to discuss your unique employment law questions.
This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice. Always consult an attorney with specific legal issues.
