State Laws: a Growing Minefield for Employers
| Publication year | 1994 |
| Pages | 1089 |
| Citation | Vol. 23 No. 5 Pg. 1089 |
1994, May, Pg. 1089. State Laws: A Growing Minefield for Employers
In late 1992, in Cusimano v. Metro Auto, Inc.,(fn1) the Colorado Court of Appeals determined that corporate officers could be held personally liable for wages, statutory penalties and attorney fees to the same extent as the corporation under Colorado's Wage Claim Act.(fn2) The court further concluded that liability may be based solely on an individual's "status" as an officer.(fn3)
More recently, a Denver District Court jury awarded nearly $91,000 in damages to a gay man who challenged his termination from employment by asserting, among his antidiscrimination and tort claims for relief, a cause of action under the three-year-old "smoker's rights" statute, which protects off-duty, off-premises legal activities.(fn4) In his complaint, the employee claimed that he was dismissed from his job solely due to his employer's "perception that he was a homosexual."(fn5) The employer cited financial reasons for the termination. The employee recovered against both the employer corporation and its president individually.
The foregoing cases serve as a reminder of some of the duties and responsibilities imposed on employers under Colorado state statutes. Of course, these duties are in addition to the guarantees established under the panoply of federal and state antidiscrimination, wage-hour and other employment laws, and the ever-growing class of common law causes of action available to employees. This article discusses recent developments in Colorado laws affecting employers in this state, including amendments to the Wage Claim Act and the Unclaimed Property Act, the enactment of a statute protecting fair and unbiased employer references, and a heightened awareness of Colorado's statute protecting off-duty legal activities.
Employers often ask two questions about wages: (1) what they can deduct from an employee's paycheck and (2) what their responsibilities are regarding an employee's final paycheck. The answer to both questions is found in Colorado's Wage Claim Act.(fn6) The Wage Claim Act does not create any substantive right to compensation for the work performed by an employee;(fn7) rather, it sets forth the manner in which wages are to be paid to persons working in the state of Colorado. Key provisions of the Wage Claim Act were amended on May 6, 1993, by the General Assembly.
Under the Wage Claim Act, an employer(fn8) may set off from wages any "lawful charges or indebtedness" owed by the employee to the employer at the time of separation.(fn9) The term "lawful charges or indebtedness" has been amended to include the following: (1) deductions mandated by law, such as taxes, FICA and court-ordered garnishments; (2) deductions for loans, advances, equipment or property provided under the terms of an enforceable written agreement; (3) losses caused by theft; and (4) any other deductions authorized by the employee, if revocable, such as medical insurance or savings plans.(fn10) In the case of theft, the law puts significant limitations on the employer's ability to deduct the loss. For example, a report must be made by the employer to the proper law enforcement authorities.(fn11)
The Wage Claim Act further provides that in any case where the employer "interrupts" the employer-employee relationship, such as a termination or layoff, all wages or compensation earned and unpaid at the time of such discharge are due and payable immediately.(fn12) If the employer's payroll office is closed at the time of termination, the wages due the separated employee must be made available to the employee no later than six hours after the start of the employer's next regular workday.(fn13) There is no provision in the statute regarding employers with out-of-state payroll offices. In such situations, employers commonly use express mail or pay out of petty cash in the local office in order to comply with the intent of the statute.
When an employee quits or voluntarily resigns his or her employment, wages are due and payable on the next regular payday.(fn14) However, the Colorado Division of Labor holds the position that an employer who accepts an employee's notice of resignation but does not permit the
employee to complete the entire notice period must pay any wages due immediately.(fn15) In the event of separation from employment, the employer must make the final paycheck available at the worksite for pick up or, on request of the employee, by mail to the employee's last known mailing address.(fn16)
Wages or compensation due on termination includes all wages earned, including vacation...
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