Colorado Unpaid Wages & Wage Theft

Unpaid Wages and Wage Theft in Colorado

Regrettably, some employers try to save money at the expense of their employees by failing to pay employees all they are owed. Baird Quinn’s Denver employment lawyers are contacted by employees about unpaid wages, salary, bonuses, overtime, and commission claims on a daily basis. The firm is also contacted about unlawful deductions from paychecks, employee misclassification, and shorted hours. Colorado law requires employers to pay employees earned wages in accordance with the parties’ agreement, and federal and state law. Our employment lawyers provide aggressive representation to employees and former employees victimized by employer wage theft.

 

Common Colorado Unpaid Wages & Wage Theft Concerns

 

1. Colorado Employer Has Not Paid for All Hours Worked

If you are an hourly employee (i.e., not an exempt, salaried employee under the Fair Labor Standards Act, then you are entitled to be paid for all hours worked at your regular hourly rate, plus overtime compensation for hours worked over 40 hours in a workweek or 12 hours in a work day. If your employer does not pay you for all regular and/or overtime hours worked, then you should track your hours in writing, and ask your employer for an explanation. It may be a simple misunderstanding or clerical error. We recommend that you document these conversations and/or confirm employer explanations in writing. If your employer is not willing to reimburse you for unpaid wages, you need to consider legal options.

Colorado Wage Act Law

Under the Colorado Wage Act, your employer is required to pay you at regular intervals, such as biweekly or semimonthly. An employer who violates the Colorado Wage Act may be subject to civil and/or criminal penalties. You may file a complaint with the Colorado Department of Labor regarding an employer’s failure to pay you for all hours worked, or for unlawful deductions from your paycheck. Further, Federal and Colorado law require that employers pay you for all overtime worked. 

Recovering Unpaid Wages in Colorado 

You may file a claim regarding unpaid overtime with either the United States Department of Labor or Colorado Department of Labor. The Colorado Department of Labor will investigate wage claims up to $7500.00. You may also have the option to file a small claims court action to recover amounts owed, among other options. Alternatively, you may seek assistance from an experienced employment lawyer to determine how to proceed with your claim. Baird Quinn’s Denver employment lawyers are available to discuss your options with you. As claims have time limits, you should act quickly.

2. Colorado Employer Paycheck Deductions

The Colorado Wage Act limits the circumstances under which employers may deduct earned wages from employees’ paychecks. 

Permissible wage deductions include:

  • Deductions required by local, state, or federal law (i.e., tax withholding, Social Security and Medicare requirements, wage garnishments, and any other court-ordered deductions)
  • Deductions by written agreement between the employer and employer, such as for loans, pay advances, goods or services, and equipment or property;
  • Deductions necessary to cover the replacement cost of a shortage due to theft by an employee subject to the following conditions:

A report must be filed with the proper law enforcement agency.

If criminal charges are not filed against the accused employee within 90 days after the report is filed, or if the accused employee is found not guilty or the charges are dismissed, the employee may recover the amount withheld, plus interest.

If the employer acts without good faith in making such charges, in addition to the amount wrongfully withheld, the employer could be liable for three times the amount wrongfully withheld, plus attorneys’ fees and court costs.

  • Deductions that are authorized by the employee can be revoked (such as for insurance benefits, savings plans, voluntary pension plans, charities, etc.)
  • Deductions for the amount of money or the value of the property that the employee failed to properly pay or return to the employer in circumstances where an employee was entrusted during employment with the collection, disbursement, or handling of such money or property. The employer has 10 calendar days after the termination of employment to audit and adjust the accounts and property value of any items entrusted to the employee before the employee’s wages or compensation shall be paid.

Impermissible wage deductions include:

  • Deductions for property damage

In general, absent an enforceable written agreement to the contrary, employers may not deduct from an employee’s wages or compensation for the cost of damage or depreciation to an employer’s property.

  • Deductions as fines for employee behavior or actions.

In general, employers may not apply fines to an employee’s earned wages or compensation based on employee behavior or performance. For example, an employer typically may not deduct from the wages of a restaurant waitperson for the cost of a meal a customer refused to pay due to poor service or lost income due to an employee’s good faith error.

3. Wage Theft Arising from Unpaid Wages in Colorado

Colorado Wage Act Law

The Colorado Wage Act prohibits wage theft. In 2019, the Wage Act was amended to provide that “any employer or agent of an employer who willfully refuses to pay wages or compensation as provided in this article 4, or falsely denies the amount of a wage claim, or the validity thereof, or that the same is due, with intent to secure for himself, herself, or another person any discount upon such indebtedness or any underpayment of such indebtedness or with intent to annoy, harass, oppress, hinder, coerce, delay, or defraud the person to whom such indebtedness is due, commits theft as defined in section 18-4-401.” By characterizing the offense as theft, the legislature introduced a wide range of criminal penalties for employers who intentionally violate the Wage Act.

Colorado Wage Theft Reconciliation

Employees subjected to wage theft may also file civil claims against an employer. This may be the fastest, most effective option to recover unpaid wages. Baird Quinn’s Denver employment lawyers regularly represent employees attempting to recover unpaid wages from a current or former employer.

4. Recovering Unpaid Sales Commissions in Colorado 

For many Colorado sales representatives, sales commissions are a major, if not the sole, component of their compensation package. Sales commissions are typically subject to written or verbal agreements addressing the circumstances under which sales commissions are earned and the amounts earned by the sales representatives. Unfortunately, sales commission plans may be poorly drafted or incomplete. Some employers draft sales compensation plans to give the employer maximum or sole discretion in interpreting the plan and determining whether a sales commission is owed and/or the amount that is owed. These circumstances often lead to sales commission disputes.

Colorado Wage Act Law

The Colorado Wage Act requires employers to pay employees sales commissions in accordance with the agreement between the employer and employee. Thus, the starting point for determining whether sales commissions are owed is a review and evaluation of the written or verbal agreements between the employer and employee. Further, the fact that a sales commission plan states that an employer has “sole discretion” in interpreting the plan or determining whether sales commissions are owed does not allow an employer to act arbitrarily in making compensation decisions. Such decisions must be reasonable.

Recovering Unpaid Colorado Sales Commission 

If you feel that an employer is not properly interpreting a sales commission plan or paying sales commissions, you should consult with an attorney. Baird Quinn’s Denver sales commission lawyers have reviewed hundreds of sales commission plans and represented many sales representatives and other employees in pursuing their rights with respect to unpaid sales commissions.

5. Recovering Unpaid Bonuses from Colorado Employer

Many employees rely on bonuses as part of their annual compensation packages. As with sales commissions, bonuses are typically subject to written and/or verbal bonus plans. 

Colorado Wage Act Law

The Colorado Wage Act requires employers to pay bonuses as agreed by the employer and employee. Thus, a written or verbal agreement regarding bonuses is typically the starting point for evaluating bonus claims. These plans may be unclear or give the employer significant discretion in interpreting the plan and/or determining whether a bonus is owed. Despite this language, an employer must act reasonably in interpreting a bonus plan and/or determining whether a bonus has been earned.

Recovering Unpaid Bonuses in Colorado 

If you believe that your employer has failed to pay you a bonus as agreed, you should consult with an experienced employment lawyer about your rights under the bonus agreement. Baird Quinn’s employment lawyers have reviewed hundreds of bonus plans and have significant experience in interpreting the plans and litigating bonus claims.

6. Colorado Employer Retaliation Over Unpaid Wages Requests

Employees may have reasonable concerns about employer retaliation if they express concerns about unpaid wages or overtime. And it is true that employers often don’t like employees who point out that an employer is violating the law or not honoring promises to make payments. 

Colorado Wage Act Law

The Colorado Wage Act prohibits employers from retaliating against employees for exercising rights under the Act. The Fair Labor Standards Act also prohibits retaliation against employees who exercise rights to overtime compensation or minimum wage. Colorado common law recognizes a claim on behalf of employees who are discharged for exercising employment rights or privileges, such as those under the Colorado Wage Act or Fair Labor Standards Act. It can be tricky for employees to express concerns about unpaid wages (whether it’s bonuses, commissions, or overtime compensation) to their current employer, and Baird Quinn’s employment attorneys can help you navigate that often difficult path.

7. Colorado Employer Refusal to Pay Wages Due to Financial Hardship

An employer does not escape its obligation to pay wages because it does not have the necessary funds. The Wage Act provides that an employer is subject to penalties if, two or more times within any twenty-four-month period, the employer causes an employee’s check, draft, or order to not be paid because the employer’s bank does not honor an employee’s paycheck upon presentment. In addition, based upon the new definition of employer under the Wage Act, an employee appears able to assert a claim against an employer’s agents – such as the owner of a company – if wages are unpaid due to the alleged financial condition of the employer.

  1. Colorado Employee Forced to Give Up Earned Wages by Employer

A Colorado employer cannot require their employees to give up their right to pay for their earned wages. The Colorado Wage Act provides that any agreement, whether written or oral, by an employee purporting to waive or to modify such employee’s rights in violation of the Wage Act is void — meaning unenforceable. Thus, an employer may not require an employee to give up the employee’s right to be paid wages that have already been earned by the employee. There are some circumstances in which a waiver may be allowed. For example, if an employee engages counsel to negotiate a settlement through a properly documented, signed, voluntary settlement agreement, or if an employee files suit and a subsequent settlement agreement are approved by the Court, a waiver may be allowed. The law in this area has not been fully interpreted by the Colorado courts.   

Contact Baird Quinn LLC for more information on unpaid wages and wage theft in Colorado.