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January 2015

2014 Year End Colorado Employment Law Update

2015 Colorado State Minimum Wage - Effective January 1, 2015

Minimum Wage: $8.23

Tipped Employee Minimum Wage: $5.21

The Colorado Constitution requires the Colorado minimum wage to be adjusted annually for inflation, as measured by the Consumer Price Index. The new minimum wage applies to all Colorado employees who are either:

• Covered by the Fair Labor Standards Act; or
• In the following four industries: 1) retail and service; 2) commercial support service; 3) food and beverage; and 4) health and medical.

New wage posters are available online at

Amendments to the Colorado Wage Act

Colorado’s Wage Act has long required that employers pay their employees their earned wages in a timely manner. But it has traditionally had little “teeth.” On January 1, 2015, the Colorado Wage Protection Act of 2014 (the “Act”) will go into effect. The Act significantly expands the state’s wage payment law by:

• Expanding coverage to include claims by current employees;
• Establishing a procedure for the Colorado Division of Labor to adjudicate complaints for unpaid wages or compensation of $7,500 or less per employee;
• Increasing fines and penalties (both of which may exceed $7,500 per employee);
• Providing for attorneys’ fees for an employee paid less than minimum wage;
• Eliminating the notice of claim requirement;
• Adding a three year recordkeeping requirement.

As a result of these amendments, we expect to see an increase in claims for the following:

• Failure to pay minimum wage;
• Withholding earned tips;
• Failure to pay time and a half overtime;
• Requiring workers to work off-the-clock;
• Failing to provide paid rest breaks or unpaid meal breaks
• Withholding final paychecks

To comply with the Act, and best position your company to successfully respond to any Division of Labor investigation, employers should: (1) comply with Colorado’s minimum wage, pay all overtime hours worked, and ensure compliance with meal and rest break requirements; (2) conduct a wage and hour audit; (3) mail final paychecks to employees who fail to pick them up within 60 days; (4) ensure that your record retention policies are up to date and preserve information contained in itemized pay statements for three years; and (5) promptly contact your attorney to assist with a thorough response to any notice of complaint received from the Division of Labor.

Big Changes to the Colorado Anti-Discrimination Act

Colorado’s Anti-Discrimination Act (“CADA”) prohibits discrimination on the basis of disability, race, creed, color, sex, sexual orientation, religion, age, national origin or ancestry, victims of domestic abuse, marital status, and “lawful off-duty activities.” C.R.S. § 24-34-402(1)(a). Like Colorado’s Wage Claim Act, CADA has traditionally lacked any “teeth,” as it did not provide for the recovery of attorneys’ fees or compensatory or punitive damages. As a result, only employees filing claims for sexual orientation or those whose employers had less than 15 employees would file under CADA.

On May 6, 2013, Colorado Governor John Hickenlooper signed into law the Job Protection and Civil Rights Enforcement Act of 2013 (the “Act”), which amends CADA. Beginning with cases arising on or after January 1, 2015, plaintiffs pursuing claims under the CADA may recover both economic and non-economic damages from employers – including small businesses with fewer than 15 employees – who are found liable for engaging in workplace discrimination.

If a court or the Colorado Civil Rights Commission (Commission) finds an employer has engaged in an unfair or discriminatory employment practice, the employee may be entitled to the following relief: (1) reinstatement or hiring, with or without back pay; (2) front pay; and (3) any other equitable relief that either the court or the Commission considers appropriate. The Act also authorizes courts to award the prevailing plaintiff reasonable attorneys’ fees and costs. The new law, however, does not extend the same right of recovery to prevailing employers, unless the court deems that the plaintiff’s lawsuit was frivolous, groundless, or vexatious.

Where private sector employers engage in intentional discriminatory or unfair employment practices, the Act also allows courts to award punitive and compensatory damages, except in age discrimination cases. In cases of willful age discrimination, the Act provides for liquidated damages up to twice the employee’s pecuniary damages. Recovery of compensatory and punitive damages does not extend to employment practices that are unlawful solely because of their disparate impact.

The Act adopted the mandatory caps found in Title VII for employers with 15 or more employees and introduced limited damages for private entities employing fewer than 15 employees. The Act directs the court to consider the size and assets of the employer and the egregiousness of the discriminatory employment practice when making its award determination. The caps are as follows:

Number of Employees In Each of 20 or More Calendar Weeks Cap on Combined Compensatory & Punitive Damages
501 and more $300,000
201 to 500 $200,000
101 to 200 $100,000
15 to 100 $50,000
5 to 14 $25,000
1 to 4 $10,000


As a result of these changes, we expect to see significantly more cases filed in state court, which has a more generous pleading standard and fewer resources to rule on motions. Employers of all sizes should (1) update their employee handbooks and policies and procedures; (2) conduct harassment and diversity training; (3) document all disciplinary issues; (4) review job descriptions to ensure they reflect job duties and to limit supervisory authority; (5) consider purchasing employment practices liability insurance (EPLI) to cover defense costs should a claim arise; and (6) consider implementing an arbitration provision to avoid juries.

Important Employment Cases

A Leave of Absence of More than Six Months Is Virtually Never a Reasonable Accommodation

This summer, the Tenth Circuit Court of Appeals held that a six-month, inflexible leave policy is virtually always “more than sufficient” to constitute a reasonable accommodation under the Rehabilitation Act, and by implication, the Americans with Disabilities Act (“ADA”). Hwang v. Kansas State Univ., No. 12-3070, 2014 WL 2212071 (10th Cir. May 29, 2014).. The court observed that “reasonable accommodations…are all about enabling employees to work, not to not work.” Under Hwang, employers can almost always maintain a six month limit on leaves of absence. To the extent that employers maintain a firm policy of limiting lave to six months, they must enforce it consistently or risk exposure to liability for discriminatory treatment.

Preferential Treatment to Paramour is Not Gender Discrimination

In Clark v. Cache Valley Electric Company, No. 13-4119 (10th Cir. July 25, 2014), Project manager Kenyon Brady Clark sued his employer, Cache Valley Electric Company, alleging violations of Title VII. Clark’s discrimination claim alleged that his supervisor, Myron Perschon, favored a female project manager, Melissa Silver, over him because Perschon and Silver were in a romantic relationship. Clark asserted that Perschon gave Silver better work assignments, paid her more for performing less work and performed most of Silver’s job duties himself. Although it turned out that there had been no affair, Clark still asserted that “whether they were having sex or not, there was favoritism.” When asked about the reason for the favoritism at his deposition, Clark admitted that if the favoritism was not due to a romantic relationship, he did not know the reason for it.

The Tenth Circuit Court of Appeals analyzed Clark’s claim as a reverse gender discrimination case under which Clark needed to show circumstances that would support an inference that his employer discriminates against the majority (i.e., males) or that “but for [his] status the challenged decision would not have occurred.” Clark did not assert that the favoritism was due to Silver being a female or that Cache Valley treated women more favorably than men. Instead, Clark focused on the preferential treatment that his supervisor offered to one specific female employee. That deficit was fatal to his reverse gender discrimination claim. The Court cited numerous cases where the motives for preferential treatment were other special relationships, such as friendship, nepotism or personal fondness or intimacy, in which it had ruled that such favoritism was not within the purview of Title VII’s anti-discrimination provisions. Because Clark’s discrimination claim was based only on the favoritism shown to a special friend and not on a protected characteristic, his claim was not covered by Title VII. The Court affirmed summary judgment in favor of Cache Valley.

Clark’s retaliation claim did not fare any better, as the court held that Clark failed to show that he had a reasonable, good faith belief that Cache Valley had retaliated against him for opposing an unlawful employment practice under Title VII – that is, it is not reasonable to believe that you are complaining about gender discrimination when you are complaining about favoritism without more.

New Colorado Employment Verification Form

The Colorado Department of Labor and Employment (“CDLE”) issued a new immigration affirmation form, which employers must use beginning October 1, 2014. Remember to keep a written or electronic copy of the affirmation and supporting documents, along with a completed Form I-9, for the term of employment for each employee.

The new form is available online at

Employment Law

Heather M. Gwinn

Employment Law