Colorado Enacts New Wage Theft Statute; Employers Could Face Felony Charges
On May 16, 2019, Colorado Governor Jared Polis signed into law H.B. 1267, which reclassifies the failure to pay employee wages as "theft." The new law, which will go into effect on January 1, 2020, absent the filing of a referendum petition, imposes criminal penalties if an employer willfully refuses to pay wages or compensation, or intentionally and falsely denies the amount or validity of a wage claim.
Under the current statutory framework, an employer faces only an unclassified misdemeanor charge if found guilty, plus a fine of $300 for failure to pay wages or $500 for failure to pay the minimum wage. Under the new law, failure to pay employee wages constitutes theft and is either a petty offense, misdemeanor, or felony depending on the amount of the unpaid wages. The employer faces potential felony charges when the amount of unpaid wages exceeds $2,000.
The law defines "employer" like the federal Fair Labor Standards Act and includes migratory field labor contractors and crew leaders. The act exempts state agencies and entities, cities, counties, municipal corporations, quasi-municipal corporations, school districts, and irrigation, reservoir, and drainage conservation companies.
One of the purposes behind H.B. 1267 is to recognize labor as "a thing of value" that can be subject to theft as a way to aid law enforcement in combatting labor trafficking. The legislative declaration also notes that studies have found that wage theft costs individual workers in Colorado hundreds of millions of dollars in wages and benefits each year and the state of Colorado tens of millions of dollars in revenue.
As more states focus on increasing statutory protections for workers, employers with multistate operations are facing heightened challenges in monitoring legal compliance in their workplaces.