Colorado Wage Act (CWCA) Section 109

by | Jan 16, 2020 | Colorado Employment Law Blog

The Colorado Wage Act (CWCA) is a state law that protects the rights of workers in Colorado. The CWCA covers a wide range of topics, including minimum wage, overtime pay, and wage payment requirements. One important provision of the CWCA is Section 109, which requires employers to pay their employees all earned wages upon termination of employment.

Section 109 is important because it helps to ensure that workers are not left without the pay they have earned, even if they are fired or laid off. This is especially important for workers who live paycheck to paycheck and may not be able to afford to go without pay for even a short period of time.

What is the Colorado Wage Act?

The Colorado Wage Act, often referred to as the Colorado Wage Claim Act (CWCA), is a state labor law that governs various aspects of employment-related wage and hour matters in the state of Colorado. It provides protections and regulations for workers regarding issues such as minimum wage, overtime pay, timely payment of wages, and other wage-related matters.

Key aspects of the Colorado Wage Act include:

Minimum Wage: The CWCA sets the minimum wage that employers in Colorado must pay to their employees. This minimum wage rate can change over time to keep pace with the cost of living.

Overtime Pay: The Act also establishes rules for overtime pay, requiring employers to pay eligible employees an overtime rate for hours worked beyond a certain threshold in a workweek.

Timely Payment of Wages: It stipulates that employers must pay employees their earned wages at regular intervals and in a timely manner.

Wage Claims: The CWCA outlines procedures for employees to file wage claims or complaints against employers who have violated wage and hour laws.

Penalties: Employers found in violation of the Colorado Wage Act may be subject to penalties and fines.

Record Keeping: The Act may require employers to maintain records related to wages, hours worked, and other employment-related data.

The Colorado Department of Labor and Employment (CDLE) is responsible for enforcing the Colorado Wage Act and ensuring compliance with its provisions. It’s important for both employees and employers in Colorado to be familiar with the Act’s provisions to ensure fair treatment and adherence to wage and hour regulations.

Learn more about the Colorado Wage Act with the Colorado unpaid wages lawyers at Baird Quinn, LLC.

What is the C.R.S. § 8-4-109 in Colorado?

The Colorado Wage Act requires employers to pay employees their earned, vested and determinable wages in a timely manner. Section 109 provides that employers must pay employees all earned wages or compensation immediately upon termination of employment.  If at such time the employer’s accounting unit is not operational, an employer may pay the employee no later than six hours after the start of the employer’s accounting unit’s next regular work day.  If an employer fails to pay an employee within the allotted time frame, the employer may send a demand for payment of wages.  If the employer fails to pay the employee within fourteen days of the demand for payment, then the employer may be subject to significant automatic and/or willfulness penalties that can double (automatic) or triple (willful) the employer’s liability for failure to make timely wage payments.     

Colorado Supreme Court Clarifies CWCA Section 109

In response to a certified question from the United States District Court for the District of Colorado, the Colorado Supreme Court has clarified that claims for unpaid wages under the Colorado Wage Act must be filed within the statute of limitations (either two or three years) and that the clock starts ticking “on the date that each set of wages first became due and payable—not on the date of separation.” See Hernandez v. Domenico Farms, Inc., 414 P.3d 700 (Colo. 2018).

Certified Question Raised by United States District Court 

The United States District Court certified the following question to be addressed by the Colorado Supreme Court:

Does the CWCA Section 109 (wage payments upon termination) permit a terminated employee to sue for wages or compensation that went unpaid at any time during the employee’s employment, even when the statute of limitations has run on the cause of action the employee could have brought for those unpaid wages under Section 103 (wage payments during employment)?

Analyzing the Interplay of Provisions of the Colorado Wage Act 

The Colorado Supreme Court analyzed the interplay of three provisions of the Colorado Wage Act to answer this question. Section 122 provides that a claim may be brought “two years after the cause of action accrues and not after that time,” except for “willful” violations,” which must be “commenced within three years.” See C.R.S. § 8-4-122. Section 109 provides that employers must pay employees all earned wages or compensation upon termination of employment. See C.R.S. § 8-4-109. Finally, Section 103 requires employers to pay current employees at regular intervals during their employment.

In Hernandez, the employees argued that the statute of limitation on their claims for unpaid overtime under Section 190 accrued “only upon the termination of the employment relationship,” even if they would have been time barred from bringing the claim under Sections 103 or 109. The Supreme Court rejected that argument, holding:

If an employee fails to pursue a claim to receive unpaid wages for more than two (or three) years after those wages are due and payable, the employee’s claim to those wages is extinguished by operation of the statute of limitations. Those wages are no longer due to the employee, and section 109 does nothing to make these extinguished claims due and payable again. The plain language of these sections shows that the General Assembly intended for claims to be brought within two or three years of when the wages became due and payable, and not after that time.

Colorado Supreme Court’s Response to Clarification of CWCA Section 109

Thus, the Court held that while terminated employees may include claims for previously earned wages under Section 109, the right to bring those claims is subject to the two/three statute of limitations, which runs from the date the wages first become due and payable. That is, the period begins to run on the payday following the conclusion of the pay period in which the wages were earned – not on the day of termination.

Get Unpaid Wage Support with Colorado Employee Rights Lawyers

If you have questions or concerns related to wage and hour matters, wage claims, or any other Colorado employment concerns, seek experienced legal counsel. Our experienced team of Colorado labor law attorneys is here to provide guidance and assistance tailored to your specific needs. Contact us today for a confidential consultation to protect your rights, address your concerns, and ensure compliance with the ever-evolving Colorado labor laws. Your peace of mind and legal security are our top priorities.