by David Law

David Law

In June 2023, Governor Jared Polis signed into law the Protecting Opportunities and Workers’ Rights (“POWR”) Act, dramatically altering Colorado’s antidiscrimination law, and presenting a host of new challenges for employers.  The new law went into effect on August 7, 2023.  This article covers the major aspects of the law, and best practices for ensuring compliance.

New Standard for Harassment

Historically in Colorado, to make out a claim for harassment, an employee had to show that the conduct was “severe or pervasive.” This was a difficult standard to meet, as it required employees show that their work environment was “permeated” with discriminatory intimidation, ridicule, and insults.  Petty slights, minor annoyances, and isolated incidents were not sufficient.

The POWR Act scraps the severe or pervasive standard and replaces it with a new rule: harassment is legally actionable if it is (a) unwelcome (b) directed at an individual because of their membership in a protected class, and (c) subjectively offensive to the individual and objectively offensive to a reasonable person in the same protected class.  The Act states that the type of work and the frequency of harassment have no bearing on whether the objective standard is satisfied.  Under the new law, even a single incident can constitute unlawful harassment.  Notably, the law uses a modified objective standard by asking whether a reasonable person in the same protected class would find the conduct offensive. It is unclear how this modified reasonable standard will affect how harassment claims are analyzed.

Action Items:  Review your EEO and anti-harassment policies to ensure they are up to date and drafted to comply with the new law.

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David Law

by David Law

On June 5, 2023, Colorado Governor Jared Polis signed SB 23-105 into law, significantly changing the rules around job postings and promotional notices. Employers will need to act quickly to prepare for these changes, which take effect January 1, 2024.

Overview of the Changes

Although multiple states have enacted pay transparency laws, Colorado has been the only state to require employers to notify existing employees of all “promotional opportunities” within their companies.  SB 23-150 changes this requirement.  Now, employers are required to provide notice of (and compensation and benefit information for) all “job opportunities” within their organizations, regardless of whether the opportunities would qualify as promotions, lateral transfers, or demotions for most existing employees.  The Act clarifies that “career progression” and “career development” are not job opportunities and do not trigger the opportunity-notice requirements.  The Act also provides some relief for employers with physical locations exclusively outside Colorado that have fewer than 15 Colorado-based employees working remotely.  Through July 1, 2029, these employers will only be required to provide their Colorado employees notice of remote job opportunities.

To complement these changes to the existing notice provisions, the Act imposes a new (internal) notice requirement: employers must announce to existing employees each time they select a candidate for a job opportunity. Read more >>

Juan Obregon

By Juan Obregon

Organizations commonly require employees to be employed on the date a commission or bonus is paid to receive the commission or bonus. The Colorado Department of Labor and Employment (CDLE), which interprets and administers Colorado’s Wage Act, recently indicated that practice is not permissible, which means employers will need to revisit their bonus agreements and commission plans sooner rather than later. The failure to heed the CDLE’s guidance may result in costly wage claims. 

Overview

The Colorado Wage Act requires employers to pay employees the wages and other compensation they earn. Non-discretionary bonuses and commissions are considered wages. Under the Colorado Wage Act, an employee is not entitled to wages or compensation unless such amounts are “earned, vested, and determinable.” The question, of course, is: when are bonuses or commissions earned, vested, and determinable? Read more >>

By Mark Wiletsky

Mark Wiletsky

The Colorado Department of Labor and Employment (CDLE) recently provided guidance for Colorado employers on two important issues: payment of vacation and paid time off (PTO) to employees upon separation from employment, and deductions from pay.  While these documents are not binding, they represent the CDLEs interpretation of Colorado law and therefore provide helpful guidance to employers.

Vacation, PTO, Floating Holidays, and More.  In Nieto v. Clark’s Market, Inc., 2021 CO 48, the Colorado Supreme Court held that employers must pay employees all accrued but unused vacation pay upon separation from employment.  Unfortunately, that decision left open some questions for employers, which CDLE addresses in INFO #14, including:

• What counts as vacation pay? Basically, any leave that can be used at the employee’s discretion, such as paid time off (PTO), annual leave, personal days, floating holidays, etc.  The CDLE explains that “vacation pay” includes any paid leave for which there is no qualifying event.  Leave that is based on a qualifying event, such as health needs, a designated public holiday, caretaking, or bereavement, is not considered vacation pay.
• Does that mean PTO, annual days, etc. must be paid upon separation from employment? Yes, according to the CDLE.  If the paid leave can be used without a qualifying event, then any accrued but unused paid time off must be paid upon separation from employment.
• What about a “floating holiday” that can be used for any holiday the employee celebrates? That is not vacation pay, according to the CDLE, because it is tied to a specific qualifying event, e., a holiday the employee celebrates.  However a “floating holiday” that can be used completely at the employee’s discretion is vacation pay.
• If we do not have a written policy, do we still have to pay accrued but unused vacation upon separation? Yes, if you have a practice of providing vacation or paid time off, it does not matter whether the policy is written.
• What about “unlimited vacation” – do we need to pay anything upon separation? No, but the CDLE notes that if the company caps the time off or otherwise does not allow for “unlimited” vacation, then you likely would have to pay any unused vacation upon separation.
• Are use-it-or-lose-it policies permissible? No, according to the CDLE.  Once employees earn vacation pay (regardless of the name used for such pay), they cannot forfeit such pay.  Capping the amount of earned vacation or PTO that rolls over from year to year would amount to a forfeiture.  The Colorado Supreme Court did not address this question in Nieto, but the CDLE’s guidance appears to be consistent with the reasoning in Nieto.
• Can we cap the amount of vacation pay employees earn? Employers may set a maximum cap at which accrual stops, until such time as the employee falls below that cap.

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By Steve Gutierrez

Steven Gutierrez

Colorado law has long been unsettled as to whether employers must pay out accrued but unused vacation time at separation of employment where the employer’s vacation policy recites that vacation time need not be paid out at separation (e.g., because certain conditions, like voluntary separation, or the employee’s provision of two weeks’ notice, are not satisfied). But no longer. The Colorado Supreme Court decided a case on June 14, 2021, addressing this issue head-on, and held that “all earned and determinable vacation pay must be paid upon separation and that any agreement purporting to forfeit earned vacation is void.” The Supreme Court’s decision also appears to invalidate “use-it-or-lose-it” vacation policies in Colorado going forward.

Background on Nieto v. Clark’s Market

The Supreme Court’s decision arose from the case of Nieto v. Clark’s Market, in which an employer declined to pay an employee’s accrued but unused vacation time at separation of employment because the employee had been discharged, and the employer’s vacation policy provided that, “[i]f you are discharged for any reason or do not give proper notice, you will forfeit all earned vacation pay benefits.” The employer argued that the terms of this vacation policy controlled whether accrued but unused vacation time must be paid out at separation of employment, and the employee argued that, under the Colorado Wage Claim Act (“CWCA”), vacation time which is earned and determinable must always be paid out at separation – regardless of what the employer’s vacation policy says about such payout. Read more >>