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Vaccine lawsuits rising

Missed my recent webinar on vaccines in the workplace? Email me or send me a message through this website if interested in the complimentary on-demand presentation. In the meantime, check out this article on Law 360 (no subscription required). Interesting topics include a look at some of these new lawsuits, the need to provide certain accommodations, the importance of considering state laws, and the confusion caused by current vaccines EUA status.

Colorado Supreme Court holds vacation is a wage due in final paycheck

As noted previously, litigation over vacation payouts has been on-going at the trial court level then the appellate courts, and now finally the Colorado Supreme Court. The issue has been whether, despite various statutory changes to Colorado’s wage laws, vacation is a “wage” that must be paid out in the employee’s final paycheck. More specifically the issue has been whether employers can lawfully rely on a policy that puts a condition on the payout of wages.

In the case before the courts, the employer wrote its policy to say that vacation would not be paid out at termination unless the employee (a) resigned (b) after providing a 2-week notice of resignation.  The trial court and Court of Appeals each held that the policy controlled. Colorado law does not require that employees be given any vacation, and employers are free to determine at what rate workers earn vacation.

However, the Colorado Supreme Court reversed. The Colorado Supreme Court held, first, that, once a worker had earned the vacation, in a known amount, it was both “earned” and “determinable,” which is all the statute in Colorado requires for it to be owed. Second, the Court pointed to another provision in the statute that prohibits waivers and forfeitures of vacation, once it has been earned, and held that the policy’s conditions were, therefore, unenforceable. In short, the Court held that the employee had “earned” the vacation, and it was “determinable;” therefore, it was owed, and any policy language attempting to forfeit it was unenforceable.

Particularly aggressive employers may point out that, in this particular case, the vacation policy said that vacation was “earned” once the necessary hours were worked to accrue it. They may argue that such language limits the reach of this decision, and that, if the policy had been written to say no vacation was “earned” until the necessary accrual-hours were worked and 2-week notice of resignation were given — such employers might argue — the policy would have been effective. Employers are advised to consult with experienced legal counsel before attempting to rely on such an aggressive reading of the case.

Source: Nieto v. Clark’s Market, Inc., 2021 CO 48 (6/14/2021).

CDLE issues an on-demand webinar on Colorado’s new paid leave law known as HFWA

Looking for an overview of Colorado’s new paid leave law known as HFWA (the Healthy Families and Workplaces Act)? To get a better sense of how the CDLE (Colorado Department of Labor and Employment) interprets HFWA? How it will relate to Proposition 118, which will become an entirely new and different paid leave program in Colorado (to be phased in starting as early as next year)?

Check out the CDLE’s newly released, free on-demand webinar, available on YouTube. The CDLE also released its slides for the webinar. PRO TIP: Don’t just read the slides. Check out the webinar, especially the Q&A session following the presentation of the slides. There were some good questions asked that other employers may have about HFWA as well.

Be sure to also check the CDLE’s rulemaking page for its rules re HFWA and its poster page for the required HFWA poster (in English and multiple other languages).

Tenth Circuit rejects argument that statutory offer of settlement in Colorado impliedly released other claims much less future lawsuits

Colorado law, CRS 13-17-202, allows defendants in litigation to make what is called a statutory offer of settlement. In a statutory offer of settlement, a defendant in litigation may offer to pay the plaintiff a certain amount in settlement of the claims being litigated, which, if not accepted, the plaintiff must beat at trial, in other words, not only win at trial but obtain an even greater award in the verdict, otherwise the plaintiff becomes liable for the defendant’s actual costs. Colorado law provides that the offer of settlement may not include any other non-monetary term; it must be a pure offer to settle for a sum certain.

In this case, the plaintiff sued his former employer in Colorado’s federal court, alleging wrongful discharge. The defendant extended an offer of settlement in the amount of $100,000.00. The company advised he accepted the offer but noted that he waived no other rights, including the right to bring future lawsuits. The company said, wait, not so fast, it had intended its offer of settlement to require the plaintiff to settle all claims he might have had “without any qualifications.”

Although that was the company’s asserted intent, the Tenth Circuit noted that the company failed to say in its offer of settlement that other lawsuits and claims needed to be released. Further the Tenth Circuit noted, even if it had, that Colorado statutory offer of settlement process does not permit non-monetary terms to be included in the offer. Thus, the Tenth Circuit rejected the defendant’s argument.

Furthermore, the Tenth Circuit rejected the trial court’s analysis of the issue as well. The trial court had ruled that the plaintiff and his former employer had failed to reach a “meeting of the minds.” The Tenth Circuit held that Colorado’s statutory offer of settlement process did not require a “meeting of the minds” or even judicial involvement for the settlement to be effective. Rather, the statutory process required merely that a defendant extend an offer under CRS 13-17-202, which the Tenth Circuit held this company had, and that, within the statutory deadline, the plaintiff accept that offer, which the Tenth Circuit held this plaintiff had. At that point, the settlement was effective: the company owed plaintiff $100,000; in exchange the plaintiff’s claims in that lawsuit should have been dismissed as settled; however, no other settlement or release occurred, thus the company was indeed at risk that plaintiff might file future lawsuits.

It is noted that the company may still have some protection against future litigation. Under different principles (including claim preclusion, issue preclusion and res judicatta), the settlement and dismissal with prejudice of one lawsuit precludes the assertion of the same claims or substantially similar related claims.

Source: Oldenburg v. American Motor Insurance Co., Inc., — F.3d —, case no. 20-1209, 2021 BL 25071 (10th Cir. 1/26/21).

Colorado wage transparency equal pay requirements, sample job postings?

Effective January 1, 2021, as previously discussed, including in this firm’s recent on-demand complimentary webinar, Colorado employers — and out-of-state employers posting within Colorado even by the Internet — face new requirements that include having to post a good faith range of wages and a general description of benefits in all job opening postings. These new laws also impose (internal) promotional-opportunity notice obligations, which in turn also include obligations to disclose wage and benefit levels. Employers are reminded they block pay-history questions, and that another recent Colorado law includes ban-the-box prohibitions that now according to recent guidance by the CDLE prohibit saying “background checks required.” How are employers complying? A first-day review of sample Internet job postings on sites such as Indeed and Monster suggest at least some employers are posting along the following lines:

Job title

Business-name

City, CO

$x-$y (where so far the most common range seems to spread across a difference ($y-$x) of $5-10,000 for salary and $2-4 for hourly positions)

General description of position, like “Acme corp  is hiring managers to oversee an exciting team of workers to do such-and-such work”

Bonus incentives available

Medical, dental and vision elections available

401(k) with company match

Is that sufficient? Are pay ranges greater than $5-10,000 too much? At least one public posting had a spread of almost $50,000, is that too much, could it be based on a “good faith’ estimate of actual pay? Must bonus disclosures include more information than that, must they state a good faith estimated dollar range? Stay tuned as postings eventually begin to face scrutiny by the CDLE and courts.

CDLE issues more new information for Colorado employers

Implementing its most recent batch of rules on a variety of topics, the CDLE just issued yet more information for Colorado employers on those topics.

Are your ready for January 1, 2021?

  • Looking for more information about the CDLE’s latest batch of rules?

Join us for a complimentary, engaging and interactive webinar.

L2S Legal, LLC is recognized by SHRM to offer SHRM-CP or SHRM-SCP professional credits (PDCs). This program is valid for 1.0 PDCs.

When: Wednesday, December 16, 2020 Noon 12:00 PM Mountain Time (US and Canada) 

Register in advance for this webinar: https://us02web.zoom.us/webinar/register/WN_vGmrkeFcQ6iaM26Hg3iMGQ 

After registering, you will receive a confirmation email containing Zoom’s information for joining the webinar.

Where to find the CDLE’s latest information

The Colorado Department of Labor and Employment’s latest information is available at its website.

As noted in recent posts on this blog, look for the CDLE’s latest rules on its Rulemaking page, to include the following rules:

  • Colorado Overtime And Minimum Pay Standards (“Comps”) Order #37, 7 CCR 1103-1;
  • Wage Protection Rules, 7 CCR 1103-7;
  • Direct Investigations Rules, 7 CCR 1103-8;
  • Colorado Whistleblower, Anti-Retaliation, Non-Interference, And Notice-Giving (“Colorado Warning”) Rules, 7 CCR 1103-11;
  • Colorado State Labor Relations Rules, 7 CCR 1103-12; And
  • Equal Pay Transparency Rules, 7 CCR 1103-13.

Look for its latest posters on the CDLE’s Poster page (the following list is quoted from CDLE)

  • The “Colorado Overtime and Minimum Pay Standards” (“COMPS”) poster and notice, covering wage and hour law — see COMPS Rule 7.4, Posting and Distribution Requirements, unchanged from the 2020 COMPS Order, which requires employers to display the annually revised poster (and send it to off-site employees), plus include either the poster or COMPS itself in any handbook or manual the employer has.
  • The “Colorado Workplace Public Health Rights Poster: Paid Leave, Whistleblowing, & Protective Equipment” poster and notice, covering HFWA and PHEW since their enactment in July 2020 — see Colorado WARNING Rule 4, Notice and Posting Rights and Responsibilities, unchanged from the temporary WARNING Rules in effect since September 21, 2020, which requires employers to post and give employees notice of these rights.
  • Translations of posters and INFOs — to implement requirements for employers to provide posters and notices to non-English-fluent workers, DLSS in 2020 posted translations of its posters in 12 languages and Spanish translations of INFOs (on the same pages as the English posters and INFOs), with new translations of the 2021-updated posters to be posted later this month, and translations of INFOs coming thereafter.
  • With translations into Spanish and other language.

Look for informational summaries on the CDLE’s INFO page, where the CDLE provides the following information summaries (again quoting the CDLE):

  • INFO# 1: Colorado Overtime &, Minimum Pay Standards Order (COMPS Order) #37 [In Spanish:Hoja Informativa y Opinión Formal (INFO por sus siglas en inglés) # 1: Orden de COMPS #37] (Próximamente)
  • INFO# 2:DLSS Wage Claim Investigation Process
  • INFO# 3: Tips (Gratuities) and Tipped Employees Under Colorado Wage Law
  • INFO# 4: Meal and Rest Period
  • INFO# 5: Public Health Emergency Whistleblower Rights [In Spanish:Hoja Informativa y Opinión Formal (INFO por sus siglas en inglés) # 5: Ley de Protección al Denunciante de Emergencias de Salud Pública] (Próximamente)
  • INFO# 6A: Paid Leave Under the Healthy Families and Workplaces Act, through December 31, 2020 [In Spanish:Hoja Informativa y Opinión Formal (INFO por sus siglas en inglés) # 6A: Pago por Ausencia Laboral bajo el Acta de Familias y Lugares de Trabajos Saludables, vigente hasta el 31 de diciembre, 2020]
  • INFO# 6B: Paid Leave Under the Healthy Families and Workplaces Act, as of January 1, 2021 [In Spanish:Hoja Informativa y Opinión Formal (INFO por sus siglas en inglés) # 6B: Pago por Ausencia Laboral bajo el Acta de Familias y Lugares de Trabajos Saludables, a partir de 1º de enero] (Próximamente)
  • INFO# 7: Payment of Wages & Required Record-Keeping
  • INFO #8: Colorado Chance to Compete Act (“Ban the Box”)

The CDLE also invites interested individuals to sign up for the agency’s email alerts.

Highlights from the CDLE’s latest information

In recent posts, this blog has summarized a number of the CDLE’s latest rules. Some of the highlights from this most recent information just posted by the CDLE implementing its new rules includes the following:

  • INFO #1: The new hourly minimum wage in Colorado will be $12.32. The new minimum guaranteed salary for exempt workers will be $40,500.
    • Employers are reminded they must distribute a copy of the COMPS poster or the entire COMPS Order 37 (new for this year) with any policies/handbooks that are being distributed otherwise. Signatures must be obtained.
  • INFO #4: The CDLE has taken a strict approach to meals and rest periods, summarized in INFO #4.
    • Employers are responsible for not only “authorizing” workers to take breaks, but they must “permit” them to do so, and CDLE explains a rest break is “authorized” if the company has an adequate policy for example, but even if “authorized,” it is not “permitted” if the employee is “unable or discouraged” to take the break. Evidence that the employee is not “permitted” to take a break may simply be the employee’s own statement that they “felt pressure from the employer not to take the break.
    • It is the employer’s obligation, not the employee’s, to track and record and keep records of employee breaks. An employer cannot simply say it assumed the breaks were being taken as “authorized” where an employee claims not to have been “permitted” to take the break.
    • When a break is missed, it counts as work time, must be paid as such, even if that triggers daily or weekly overtime.
  • INFO #5: In its rules and now in its INFO implementing Colorado’s new PHEW law (already in effect), the CDLE has take the position that an employer who provides no PPE (mask) in a time of a public health emergency may not prohibit an employee from using an unsafe mask. PHEW allows employers to prohibit employees from using masks that do not meet the company’s requirements, only if — according to the CDLE’s interpretation — the employer has first provided its own mask to the worker. Employers should consider making appropriate disposable masks available in their workforces, so that they can later prohibit inappropriate masks that employees might otherwise wish to wear.
  • INFO #7: The CDLE summarized rules regarding the payment of wages, the establishment of pay periods, payment of final wages at separation, pay statement requirements and recordkeeping requirements.
  • INFO #8: The CDLE explained Colorado’s new ban-the-box law. Companies may not state in job applications or advertisements “that a person with a criminal history may not apply,” nor ask about the person’s criminal history on an application, nor require the applicant to disclose any criminal history on the application. Additionally, the CDLE says this prohibits an employer from stating that background checks will be required. Although an employer may require background checks as part of a conditional offer of employment, that may not be stated in an application or advertisement. The CDLE explains the limited exceptions available where employers are otherwise required by law to inquire into these matters.

CDLE finalizes new WARNING rule

As noted in a prior blog post, the CDLE has finalized a crop of new rules on a variety of topics. This post addresses its WARNING (Whistleblower, Anti-Retaliation, Non-Interference, and Notice-Giving) Rules, effective January 1, 2021.  The WARNING Rules implement Colorado’s new whistleblower and related notice laws. Highlights of the rules include the following:

  • An explanation of the posting obligation that requires employers to post the state’s HFWA poster  with translations available from the CDLE for any languag espoken by at least 5% of the workforce in a conspicuous location in each workplace where individuals work, such as bulletin boards or break rooms, by time clocks or at entrances. In the event that is not possible Rule 4.1.4 describes a process for providing the actual poster to each new hire or on “a web-based platform.”
  • An explanation of the “reasonable” and “good faith” requirements a whistleblower must meet to be protected, to include under Rule 5.1.2 a statement by the worker, without necessarily citing a specific rule or guideline, “what action, condition, or situation they believe constitutes a qualifying violation of a rule regarding, or significant threat to workplace health or safety.”
  • An explanation in Rule 5.2.3 that, while Colorado’s new law permits workers to insist on using their own more protective PPE, such PPE must itself be sourced “from a reliable provider” if the company has provided PPE compliant with federal, state and local recommendations that was sourced from a reliable provider.
  • Perhaps most controversially, an explanation in Rule 5.2.4 that whistleblower cases under this new law will entail a lower burden of proof for an employee who seeks to prove they were constructively discharged than most other whistleblower laws require. The worker will be able to prove a constructive discharge if he proves he blew the proverbial whistle in compliance with the new rules, including Rule 4.1.4 (above), the company failed to remedy the concern “immediately,” continuing to work would have posed a “substantial threat to health or safety for any person,” and he quit as a result thereof. In its prefatory Statement explaining the rule, the CDLE confirms this means that a plaintiff will not be required to prove the employer took an adverse employment action against the plaintiff; in other words, it will not be required to prove discharge, demotion, cut in pay, hours, etc.

Employers in Colorado should take time to familiarize themselves with these new rules.

Colorado Court of Appeals holds, and new COMPS Order 37 confirms, that Colorado state wage laws, like federal wage laws, exempt interstate drivers even if the driver himself does not cross state lines

The Colorado Court of Appeals held that the “interstate driver” exemption in the Colorado state wage laws (including the COMPS Orders), like federal wage law (including FLSA), exempts drivers who transport goods moved in interstate commerce, even if the driver himself only drives the final leg of transport within the state, without himself crossing state lines, especially where the driver is covered by DOT driver regulations.   The case brings Colorado in line with other courts to address the issue.

Source: Gomez v. JP Trucking, Inc., case no. 17CA2384, 2020 COA 153 (Colo.App. 11/5/2020).

Updated: Shortly after the Court issued its decision, the Colorado Department of Labor and Employment (CDLE) issued COMPS Order 37, in which it appears to have reversed its prior position in COMPS Order 36, which was rejected by the Court in Gomez, and now agrees with the ruling in Gomez; however, the CDLE included in its new COMPS Order 37, rules 2.4.6 and 2.2.6, where it mandates as a condition of such exemption, that such drivers also are paid at least 50 hours of pay at minimum wage, with overtime, which calculates in 2021 to be a minimum weekly payment of $677.60.

CDLE finalizes new rules regarding Colorado’s new paid leave laws

As noted in a prior blog post, the CDLE has finalized a crop of new rules on a variety of topics. This post addresses its Wage Protection Rules, effective January 1, 2021.  The Wage Protection Rules focus on issues related to Colorado’s new paid leave law (HFWA, Health Families and Workplace Act). Highlights of the rules include the following:

  • Rule 2.7.4: How to count employees for the purpose of determining whether a small business is under the 16-employee threshold and may, therefore, qualify for delayed implementation of HFWA’s 48 hour/6 day leave requirements until January 1, 2022.
  • Prefatory Statement and Rule 3.5.4(A)-(B): The requirements for a company’s current paid leave policies to satisfy the HFWA requirement for 48 hours (6 days for salaried employees) of general sick leave, to include the following:
    • The policy must provide for at least HFWA’s required 48 hours (6 days).
    • The policy must allow its leave to be taken for all the same reasons as HFWA. Employers are reminded that HFWA permits leave to be taken for more than just the employee’s illness. As summarized by the CDLE in its INFO 6b, HFWA permits an employee to take this time for any of the following reasons:

(1) having a mental or physical illness, injury, or health condition that prevents them from working;

(2) needing to get preventive medical care, or to get a medical diagnosis, care, or treatment, of any mental or physical illness, injury, or health condition;

(3) needing to care for a family member who has a mental or physical illness, injury, or health condition, or who needs the sort of care listed in category (2);

(4) the employee or the employee’s family member having been a victim of domestic abuse, sexual assault, or criminal harassment, and needing leave for related medical attention, mental health care or other counseling, victim services (including legal services), or relocation; or

(5) due to a public health emergency, a public official having closed either (A) the employee’s place of business, or (B) the school or place of care of the employee’s child, requiring the employee needing to be absent from work to care for the child.

    • The policy cannot impose stricter conditions on an employee’s ability to accrue, use and be paid leave, nor can it require notice or documentation (see below) not permitted to be required by HFWA.
      • Employers are reminded that HFWA contains a strict formula for minimum accrual rates, though frontloading is also permitted.
      • Employers are also reminded that HFWA does not permit a delay on usage, such as many sick leave policies that commonly now say sick leave may not be used until after, say, the first 90 days of employment.
    • The policy must also confirm that its leave includes HFWA’s required leave and that, therefore, employees will not receive additional HFWA leave if they use the leave (such as PTO) for other reasons first, except the company will supplement their leave banks as needed to grant 80 hours of pandemic leave in the event of a public health emergency.
      • Employers should carefully consider how they word this disclaimer, so that they do not inadvertently interfere with, minimize, or chill an employee’s HFWA rights.
  • Prefatory statement and Rule 3.5.2: HFWA’s requirement that the employee be paid leave on the basis of “the same rate and with the same benefits, including health benefits,” as if he’d worked, includes all compensation missed while on leave, including base pay, overtime, bonuses, and holiday pay, and even premium pay and shift differentials.
  • Prefatory statement and Rule 3.5.3(C): Explanation that, where an employee is eligible for both HFWA’s 48 hours (6 days for salaried employees) of general sick leave and 80 hours  (10 days for salaried employees) of pandemic leave, the employee must be allowed to take the 80 hours of pandemic leave first before exhausting their other paid leave, such as the 48 hours of HFWA leave.
  • Rule 3.5.3(B): When an employee takes intermittent HFWA leave it is generally taken in 6-minute increments, unless the employer specifies a different increment in its policy, up to 1 hour.
  • Rules 3.5.4-3.5.5: The notice and documentation requirements for leave. Employers are reminded that the documentation requirements are not significant and leave generally cannot be denied for lack of documentation of the sort many employers are used to requiring for sick leave. The CDLE explains the ability for employers to require documents, as follows (emphasis added):

An employer may require “reasonable documentation” that leave is for a HFWA-qualifying purpose only if the leave requested or taken is for “four or more consecutive work days,” C.R.S. § 8-13.3-404(6), defined as four consecutive days on which the employee would have ordinarily worked absent the leave-qualifying condition, not four consecutive calendar days. An employer may not require an employee to provide documentation that leave is for a qualifying reason “related to [a] public health emergency” under C.R.S. § 8-13.3-405(3), (4).

(A) When documentation is required, an employer may request only “reasonable” documentation, which is defined as not more documentation than needed to show a HFWA-qualifying reason for leave, as described in subparts (B), (C), and (D) below, and an employer shall not require disclosure of “details” regarding the employee’s or family member’s “health information” or the “domestic violence, sexual assault, or stalking” that is the basis for HFWA leave (C.R.S. § 8-13.3-412(1)).

(B) To document leave for a health-related need under C.R.S. § 8-13.3-404(1)(a), (b):

(1) If the employee received any services (including remote services) from a health or social services provider for the HFWA-qualifying condition or need, a document from that provider, indicating a HFWA-qualifying purpose for the leave, will suffice.
(2) An employee who did not receive services from a provider for the HFWA qualifying leave, or who cannot obtain a document from their provider in reasonable time or without added expense, can provide their own writing indicating that they took leave for a HFWA-qualifying purpose.

(C) To document leave for a safety-related need covered by C.R.S. §§ 8-13.3-404(1)(c) (i.e., domestic abuse, sexual assault, or criminal harassment): A document under subpart (B)(1) (from a health provider or a non-health provider of legal services, shelter services, social work, or other similar services) or an employee writing under (B)(2) will suffice, as will a legal document indicating a safety need that was the reason for the leave (e.g., a restraining order, other court order, or police report).
(D) Submission of documentation to an employer may be provided (1) by any reasonable method, including but not limited to electronic transmission, (2) at any time until whichever is sooner of an employee’s return from leave (or termination of employment, if the employee does not return), (3) without a requirement of the employee’s signature, notarization, or any other particular document format.
(E) Confidentiality of leave-related information and documentation. Any information an employer possesses regarding the health of an employee or the employee’s family member, or regarding domestic abuse, sexual assault, or criminal harassment affecting an employee or employee’s family member, shall be treated as confidential and may not be disclosed to any other individual except the affected employee, unless the affected employee provides written permission prior to such disclosure. C.R.S. § 8-13.3-412(2)(c). If the information is in writing, it shall be maintained on a separate form and in a separate file from other personnel information, and shall be treated as a confidential medical record by the employer. C.R.S. § 8-13.3-412(2)(a)-(b).

(F) If an employer reasonably deems an employee’s documentation deficient, without imposing a requirement of providing more documentation than HFWA or applicable rules permit, prior to denying leave, the employer must: (1) notify the employee within seven days of either receiving the documentation or the employee’s return to work (or termination of employment, if the employee does not return), and (2) provide the employee the minimum of seven days to cure deficiency after the employee is notified that the employer deems the existing documentation inadequate.

  • Rule 3.5.7 explains an employer’s recordkeeping obligations, including an obligation to keep all records for 2 years.
  • Rule 3.5.7 confirms an employer’s obligation to tell an employee, upon request, how much leave they have accrued and how much they have used. Requests may not be made more often than monthly, except additional requests can be made if there is a possible need for HFWA leave. This information may be communicated to the employee, among other ways, by reflecting such amounts on a pay stub.
    • Employers are cautioned that HFWA and Rule 3.5.7 talk about an employer’s obligation to show accrued and used amounts as if different. It isn’t clear if simply showing the employee’s accrued and unused balance is sufficient. Example compare telling an employee (1) <<This year you accrued 48 hours, of which you have used 8 hours, leaving you 40 hours as of this paycheck>> versus (2) <<You have 40 hours, accrued and unused, as of this paycheck.>>
  • Rule 5.1.4 discusses the CDLE’s authority to issue remedies in the event an administrative claim is filed with it for a violation. These remedies include monetary relief, such as unpaid wages, penalties, and fines, back pay plus either reinstatement or front pay, plus such other amounts as the CDLE finds it is authorized to award.

Employers are reminded that HFWA’s current 80 hours of pandemic leave will expire at the end of 2020. In an informal phone call with the CDLE, this author was advised that the agency believes a declaration effective on or after January 1, 2021 will be required to trigger 80 hours of pandemic leave starting January 1, 2021, in other words, that the current declarations of public health emergencies do not suffice — especially since they predate HFWA’s enactment. In what this author would think is the likely event of future declaration(s) effective on or after January 1, 2021, the CDLE advised that it believes employees will receive a fresh 80 hours at that time; in other words, assume a hypothetical employee has used 71 hours of the current pandemic leave by December 31, 2020, leaving him only 9 hours for this year. A fresh declaration will top his pandemic leave back up to 80 (not 9, nor 9+80=89).

Employers in Colorado should take time to familiarize themselves with these new rules.

CDLE issues Equal Pay Transparency rules under Colorado’s Equal Pay for Equal Work Act

As noted in a prior blog post, the CDLE has finalized a crop of new rules on a variety of topics. This post addresses its Equal Pay Transparency Rules, effective January 1, 2021.  The Equal Pay Transparency Rules focus on issues related to Colorado’s new Equal Pay for Equal Work Act (CEPEWA), especially its requirements for postings related to job openings and promotional opportunities. Highlights of the rules include the following:

  • Job Postings: Rule 4.1 explains the obligation to include in “all job postings, including but not limited to promotions,” help-wanted ad’s and Internet job listings, whether for an hourly or salaried position, “a range of hourly or the salary compensation, and a general description of all of the benefits and other compensation to be offered to the hired applicant,” quoting CRS 8-5-201(2). The CDLE explains this requires including:
    • If “a range thereof” is posted, then it must be no broader than “the lowest to the highest pay the employer in good faith believes it might pay.” The CDLE confirms that an employer may “ultimately pay more or less,” so long as the posted ranges was at the time the employer’s good faith estimate (rule 4.1.2).
    • And, a “general description” of “any bonuses, commissions, or other forms of compensation.”
    • And, a “general description” of all benefits, except “minor perks.” The CDLE explains anything that is tax-reportable will not be considered a “minor perk.”
  • Promotional Opportunities: Rule 4.2 explains the obligation to make “reasonable efforts” to “announce, post or otherwise make known” all “promotional opportunities” to then-current current employees.
    • Content: The information that must be provided for promotional opportunities is the same as for job postings, plus job title and the “means by which employees may apply.”
      • Confidentiality: There is a limited exception for promotional opportunities where the employer can demonstrate a “compelling need to keep a particular opening confidential because the position is still held by an incumbent employee who, for reasons other than avoiding job posting requirements, the employer has not yet made aware they will be separated” (rule 4.2.5(A)). This exception seems oriented to a situation where a company has decided to begin a search to replace a high level employee, such as a C-level officer, who hasn’t yet been told they will be terminated. This exception does not excuse notice forever, it only delays the obligation to provide notice until “any employees are told” of the opportunity; at that point all employees must be told, at least who have the minimum qualifications to do the job or who do a “substantially similar” job. And, this exception is eventually extinguished in its entirety once “the need for confidentiality ends;” in other words, once the CEO is told or the rumor mill distributes the news informally, notice must be provided.
    • To Whom: That information must be provided to all employees. An employer may not limit disclosure to only qualified employees. However, an employer may, after individuals express interest, “screen or reject candidates based on (their) qualifications” (rule 4.2.4).
    • How: An employer satisfies this obligation to “announce, post or otherwise make known” if it discloses the required information in a way that employees can effectively access within the workplace, including on the company’s intranet or by posting a hard copy on a bulletin board, so long as employees are told where to find such information and, if not all employees have access to that location, it is made known to the remaining employees in some other way.
    • When: The deadline for an employer to provide this notice is “the same calendar day and prior to making a promotion decision,” quoting CRS 8-5-201.
    • “Promotional Opportunity”: What constitutes a “promotional opportunity”? This has been one of the chief areas of speculation as employers await CEPEWA’s effective date January 1, 2021. Rule 4.2.5 brings some clarity, though there will definitely be no shortage of litigation on the issue.
      • Rule 4.2.1 defines a “promotional opportunity” as any time “when an employer has or anticipates a vacancy in an existing or new position that could be considered a promotion for one or more employee(s) in terms of compensation, benefits, status, duties or access to further advancement.” Thus a promotion is in the eye of the employee(s), not the employer, and the employee’s reason may be nothing more than a perceived sense of enhanced “status.” A promotion can exist whether it involves a position that is “existing or new.”
        • However, note, the language in rule 4.2.1 includes as an apparent requirement that the opportunity involve a “vacancy.” The importance of that word is not clear. Is it intended to mean that an increase in grade does not constitute a “promotional opportunity”? For example, assume an employee is hired into the position, Technician, at entry level, grade I, then as her skills progress and/or as she acquires seniority, she gains higher pay as a Technician level II, is that a “promotional opportunity” because there was an increase in pay and title, or is it not because there was no “vacancy” involved?
      • Rule 4.2.5(B) discusses “automatic” promotions “after (a) trial period.” No notice is required when a worker’s promotion is due to completion of a “trial period” and where the employee is guaranteed at hire, in writing, that they will be so promoted “within one year” after being hired. That guaranty can be included in any writing, to include an offer letter, an employment agreement, or a policy. The only conditions that an employer can impose are the employee’s “own performance and/or employer needs.”
        • In its prefatory Statement explaining these rules, the CDLE confirmed this exception is very limited and does not include “in-line” or “elevator” promotions. As examples of “elevator” promotions it gives the examples of elevations “from junior to senior positions, or from training to full positions.”
        • Question: Again, consider the hypothetical increase in grade (above). As noted above, there is no vacancy involved in that hypothetical, so arguably under rule 4.2.1, it does not count as a “promotional opportunity,” but does rule 4.2.5 and the prefatory Statement explaining it suggest that, even despite the lack of a “vacancy,” such an enhancement is a “promotional opportunity” for which notice must be given? As noted the progression in grade does bring with it increased compensation and arguably an enhanced sense of “status.”
        • Likewise, consider the common hypothetical that law firms will face. Typically law school graduates are hired as “associate” attorneys. Eventually, as their careers progress, some become “shareholders,” aka “partners” (depending on the firm’s legal entity, corporation or partnership). Is that elevation from associate to shareholder, a “promotional opportunity”? If so, must all law firms disclose to all employees of the firm (shareholder, associate, staff) the compensation ranges for their shareholders?  Here too there is again generally no “vacancy” involved; most firms do not limit elevations to some discrete number of vacancies in their shareholder ranks; there is however an increase in compensation and status.
      • Rule 4.2.5(C) posits an exception for “temporary, acting, or interim hires.” No promotional-opportunity notice is required before hiring a temp, or filling a vacancy with an acting or interim worker. Again though, it is a limited exception available only for 6 months and only if the person is hired without expectation to become “permanent.” “If the hire may become permanent, the required promotion posting must be made in time for employees to apply for the permanent position.”
    • Job Openings and Promotional Opportunities, Extraterritoriality: Rule 4.3 has probably received the most attention from the media. In these final rules, the CDLE walked back its proposed language regarding extraterritoriality. Now, employers need not provide either the job opening or promotional opportunity notice for “(1) jobs to be performed entirely outside Colorado, or (2) postings entirely outside Colorado.” In its prefatory statement the CDLE explains that does not include — in other words, notice is required for — each of the following situations:
      • “remote jobs” that “could be performed in Colorado” (emphasis in original),
      • “and even for (situations involving) non-Coloradoans hired for remote work (who) may move to Colorado after being hired by Colorado employers,”
      • and any “Internet posting accessible in Colorado.”

Employers in Colorado should take time to familiarize themselves with these new rules.

CDLE finalizes crop of new rules

The Colorado Department of Labor and Employment (CDLE) has finalized a half dozen rules on a wide array of topics. Employers should take care to immediately familiarize themselves with these rules, as many take effect January 1, 2021. The rules can be found on the CDLE’s rulemaking page, where the CDLE summarizes its new rules with the following table that contains links to the actual rules themselves:

Adopted Rules Clean Version Redline Version Statement of Basis & Purpose

State Labor Relations Rules, 7 CCR 1103-12

PDF PDF PDF
Colorado Whistleblower, Anti-retaliation, Non-interference, and Notice-giving (Colorado WARNING) Rules, 7 CCR 1103-11 PDF PDF PDF
Direct Investigations Rules, 7 CCR 1103-8 PDF PDF PDF
Equal Pay Transparency Rules, 7 CCR 1103-13 PDF PDF PDF
Colorado Overtime and Minimum Pay Standards (COMPS) Order #37, 7 CCR 1103-1 PDF PDF PDF
Wage Protection Rules, 7 CCR 1103-7 PDF PDF PDF

Individuals interested in receiving updates from the CDLE directly when it engages in the rulemaking process, may subscribe with the CDLE here.

Look for follow-up posts on this blog highlighting some of the key developments in some of these rules.

How will Proposition 118’s new paid Family and Medical Leave compare with currently required federal and state paid leave?

As noted on this blog, Colorado voters approved Proposition 118, which will mandate the creation of a new state-administered insurance program to provide paid Family and Medical Leave.

As Colorado employers know, the current federal Family and Medical Leave Act (FMLA) does not require paid leave. However, federal law currently does require paid leave in some instances, most notably up to 80 hours of pandemic leave with the possibility of an additional 10 weeks for pandemic-related childcare/school closure. Colorado’s newly mandated paid leave law already requires similar pandemic leave, plus on January 1, 2021 at least 48 hours of general paid sick leave.

This new Proposition 118 leave will be in addition to these leaves. Proposition 118 leave is not limited to pandemic-related needs. While this new leave will run concurrently with any federal unpaid FMLA leave, a company may not require an employee to exhaust other paid leave prior to taking this leave, though workers and companies may “mutually agree” to make up any difference between lost pay and the benefits provided with such other leave, quoting CRS 8-13.3-410.

Explanatory material in the Colorado legislature’s 2020 Blue Book summarizing Proposition 118, illustrated this benefit formula with the following table (parentheticals added):

Proposition 118 SB 20-205 (the portion of Colorado’s newly mandated paid leave law that is not limited to pandemic-related needs) FMLA
Type of leave Family and medical Medical Family and medical
Length of leave/paid or unpaid 12 weeks (up to 16 for pregnancy or childbirth complications); paid Up to 6 days; paid 12 weeks; unpaid
Eligibility requirements After $2,500 in wages have been subject to premiums Employee earns 1 hour paid sick leave per 30 hours worked; up to 48 hours per year After employee has worked for 12 months
Job protection After working for employer for 180 days N/A Yes
Employer size All employers (with 10 or more employees) Employers with 16 or more employees as of Jan. 2021; all employers beginning Jan. 2022 All elementary and secondary schools; public agencies; private businesses with 50 or more employees
Reasons for leave Birth or adoption of child; caring for self or family member; family member going on active duty in the military; sexual assault/abuse, & stalking Care for employee’s health/safety; care for a person that the employee needs to provide health/safety-related care Birth or adoption of child; caring for family member; family member going on active duty in the military

Interested in more information about Proposition 118 and the other new federal and state paid leave laws?

  • How will all this play out?
  • What do we know?
  • What can we expect?
  • What should HR professionals do to prepare their organizations?

Join us for a complimentary, engaging and interactive webinar.

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When: Thursday, Nov 12, 2020 Noon 12:00 PM Mountain Time (US and Canada) 

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Colorado voters approve Proposition 118 Paid Family and Medical Leave Insurance

Colorado voters approved Proposition 118, the Paid Family and Medical Leave Insurance Act, to be codified at CRS 8-13.3-401, et seq. The Act enhances already required paid leaves at the federal and state level by requiring the State of Colorado to create a new agency capable of administering a paid family and medical leave insurance-based program. The new agency will be called the DFMLI (Division of Family and Medical Leave Insurance).

Interested in more information about Proposition 118 and the other new federal and state paid leave laws?

  • How will all this play out?
  • What do we know?
  • What can we expect?
  • What should HR professionals do to prepare their organizations?

Join us for a complimentary, engaging and interactive webinar.

L2S Legal, LLC is recognized by SHRM to offer SHRM-CP or SHRM-SCP professional credits (PDCs). This program is valid for 1.0 PDCs.

When: Thursday, Nov 12, 2020 Noon 12:00 PM Mountain Time (US and Canada) 

Register in advance for this webinar: https://us02web.zoom.us/webinar/register/WN_vGmrkeFcQ6iaM26Hg3iMGQ 

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When will Proposition 118 take effect?

Employers, employees and the State of Colorado have ample time to consider Proposition 118 and begin preparing. The first premiums will not be charged until January 1, 2023, and benefits will not be available until January 1, 2024.

What does Proposition 118 require?

Proposition 118 will require the State of Colorado to create the DFMLI, which will administer this new program. Premiums will be paid in part by employers and employees, although employers will be able, if they choose, to pay the employee-share. The insurance benefits to be paid to eligible workers will cover up to 12 weeks of family and medical leave, plus another 4 weeks in the event of pregnancy or childbirth complications. Such leave will be allowed on an intermittent basis. When “foreseeable,” at least 30-day notice will be required of the worker; when not, the worker will be required to provide as much notice as possible, CRS 8-13.3-405.

What employers will be exempt from Proposition 118?

Proposition 118 will apply to employers of 10 or more workers; in other words, employers of fewer than 10 employees will be exempt from paying premiums. Sole proprietors will have the opportunity to opt into the program if they choose for 50% of what their premium would otherwise be based on their income (see below).

Which employees will be eligible for Proposition 118?

Workers who have worked for their employer for at least 180 days, will be eligible to receive benefits after they have earned $2,500 in wages on which Proposition 118 taxes (premiums) were paid. It is not clear in Proposition 118’s language, but it appears that a worker need not work for a covered employer to claim these benefits; in other words, it appears that a worker who meets those wage-and-hour requirements may be able to claim these benefits even if their employer did not pay the company-side premiums (although employees of exempt small employers will be required to pay their own employee-side premiums).

CRS 8-13.3-403(7)’s definition of “employee” also includes those who provide “labor or services for the benefit of another, irrespective of whether the common law relationship of master and servant exists,” which arguably may include some traditional independent contractors.

What reasons will trigger paid leave under Proposition 118?

There will be five qualifying reasons for Proposition 118 leave:

  1. The worker’s own serious health condition
  2. A serious health condition of a family member
  3. Birth, adoption, or placement in foster care
  4. Certain military service
  5. “Safe leave,” which is a type of leave, defined in Proposition 118, related to absences for the worker’s or a family member’s experiences involving domestic violence, stalking or sexual assault

What will benefit levels be?

Benefits will be paid at 90% of the worker’s average weekly wage (AWW) to the extent the worker’s AWW is less than or equal to 50% of the Statewide AWW (SAWW), plus 50% to the extent the worker’s AWW exceeds 50% of the SAWW. In 2024, Proposition 118 anticipates the SAWW will be $1,340, at which time the maximum benefit will be $1,100 per week. In 2025, Proposition 118 estimates the SAWW will be $1,392, setting the maximum benefit of $1,253. Explanatory material in the Colorado legislature’s 2020 Blue Book summarizing Proposition 118, illustrated this benefit formula, as follows:

Weekly wage Weekly benefit Maximum annual benefit Percent of weekly wage
$500 $450 $5,400 90%
$1,000 $768 $9,216 77%
$1,500 $1,018 $12,216 68%
$2,000 $1,100 $13,200 55%
$3,000 $1,100 $13,200 37%

 

What will Proposition 118 cost and how much will employers and employees pay?

Proposition 118 is expected to cost a minimum of $575.4-million in the second half of the government’s 2022-23 budget year then $1.2-billion in its 2023-24 budget year. Of this, the State itself expects to spend $3.2-million in 2021-22 and $48.6-million in 2022-23. Employers will pay their share through premiums in the form of a payroll tax, but may split the premium 50/50 with their workers. Employers who choose will be able to absorb some or all of the employee share. The premium rate for the first two years, 2023 and 2024, will be 0.9% of the worker’s wages, of which half (i.e., 0.45%) will be paid by the company and the other half (i.e., the other 0.45%) will be paid by the employee, although a company will be able to choose to pay some or all of the worker’s share. In its third year, 2025, Proposition 118 will reset premium rates, so that the total aggregate amount of premiums paid into the program will equal 135% of 2024’s claims plus 100% of the DFMLI’s administrative costs. At that point, Proposition 118 sets a cap on the employee premium at 1.2% of the employee’s wages; Proposition 118 does not on an initial read appear to set a cap on the amount that will be imposed on employers once the premiums are reset starting in 2025.

During Proposition 118 leave, what happens with the worker’s health insurance?

During Proposition 118 leave, the worker’s health benefits will need to be continued though the worker will be required to pay their portion of such premiums, unless an employer chooses to absorb some or all of the employee’s share.

After Proposition 118 leave, will the worker be guaranteed a right to return to their position?

Proposition 118 provides that a worker who takes Proposition 118 leave will be entitled to return to their same position or a position with the same pay, benefits, seniority and status.

Additional expected requirements of Proposition 118

In addition, Proposition 118 prohibits retaliation and discrimination against workers who request or use Proposition 118 benefits.

While Proposition 118 contains some definitions and explanations of this new program, there is substantial work yet to be done to stand up this new program. Litigation is anticipated.

CDLE issues revised INFO #6A

The CDLE has issued a revised INFO #6A, which is its summary explaining the aspects of Colorado’s new sick leave law taking effect 1/1/2021. The CDLE summarized its changes to INFO #6A, as follows:

(1) Pg. 1: In the list of 3 situations that qualify for leave, a non-substantive wording change to category #3 (leave to care for another person) aims to make clearer that it applies when the person being cared for meets the category #2 definition (being ordered/instructed to quarantine/isolate, due to a risk of COVID-19, by a government agent or health provider).

(2) Pg. 1, footnote 3: As to what is and is not a “bonus” excluded from the regular pay rate that applies to paid leave in 2020, footnote 3 has been added to cite, and explain the answer in, the federal rule that applies to 2020 leave.

(3) Pg. 2: An “Example” of the CBA exemption was deleted because stakeholders have expressed differing views of the exemption that warrant consideration before the Division decides whether to adopt any interpretation.

(4) Pg. 3: An elaboration to the paragraph on how “Policies by any name can comply” cites and explains the federal rule that applies to 2020 leave, which draws a key distinction between employer policies that existed prior to April 1, 2020, and those adopted after that date.

(5) Pg. 2-3: Non-substantive citation edits — without changing any wording, numerical citations were added to the federal rules on what documentation (29 C.F.R. 826.100) and notice (29 C.F.R. 826.90) employees can be asked to provide, and numbers were corrected in two HFWA citations (to the 8-13.3-416 provision against waiver of rights, and the 8-13.3-418 provision recognizing employer rights against employee misconduct).

Of these, item 2 may be of particular interest, in that the CDLE revised INFO 6A to provide that, while on paid leave, sick leave must include payment of any “non-discretionary pay based on pre-determined criteria or formulae (e.g., by production or accuracy), whether called a piece rate, bonus, incentive, or other name.” In other words, in contrast what had seemed clear language in the new statute and in conflict with its prior INFO #6A, the CDLE has — without undertaking rulemaking — decided to re-interpret these new laws as excluding from required sick leave only “discretionary” bonuses.

“Paid Sick Leave Gaps Draw States’ Attention as Virus Persists”

State and local governments in at least 12 states (Washington, Oregon, California, Nevada, Arizona, Colorado, Michigan, Pennsylvania, New York, New Jersey, District of Columbia, Massachusetts) have or are in the process of enacting new emergency sick leave laws, which either supplement coverage of existing federal coronavirus-related leave rights and/or implements all new general sickleave requirements, according to an interesting article by Bloomberg BNA, available here: ”Paid Sick Leave Gaps Draw States’ Attention as Virus Persists.”

Colorado employers are reminded of Colorado’s new sick leave law, which does both (as well as imposes additional obligations on employers here).

Governor Polis signs Colorado sick leave laws into effect, requiring IMMEDIATE action by employers

Governor Polis has signed two laws into effect.

The Colorado Department of Labor and Employment (CDLE) has issued summaries of each law (which it calls INFOs).

Additionally, the CDLE has released a poster (Spanish) for immediate posting by covered employers (see below).

Immediate Posting and Notification Obligations

Covered employers are required to immediately:

  • Post the required poster (Spanish).
    • Postings must be made in English and any language that at least 5% of the workforce speaks.
  • Notify employees of their rights under PHEW and HFWA. This notice may be accomplished by distributing in writing or by e-mail the required poster (Spanish).
    • If a company wishes, it may also meet this requirement by distributing copies of INFO 5, 6A and 6B, instead of (or in addition to) the poster.
  • Comply with the other requirements of PHEW and HFWA that took immediate effect (see below).

PHEW – Whistleblower and other protections

As explained in the CDLE’s INFO 5, PHEW applies to Colorado employers irrespective of size and also covers companies (called “principals” in the new law) who contract with five or more independent contractors in a year; it protects their employees and contractors

PHEW provides whistleblower protections for employees who lodge complaints regarding a public health emergency, i.e., who raise “a reasonable concern about workplace violations of government health or safety rules, or about an otherwise significant workplace threat to health or safety, related to a public health emergency.” Additionally it protects those who oppose such unsafe practices or participate in their investigation, determination or remedying. In INFO 5, the CDLE includes these observations regarding this aspect of PHEW:

Reasonableness​: Workers are protected even if they are incorrect about a claimed violation, if their belief was “reasonable” and in “good faith.” Workers are​ not protected for communications (A) that are “knowingly false,” or are made “​with reckless disregard for the truth or falsity of the information,” or (B) that “​share individual health information that is otherwise prohibited from disclosure” by state or federal law. (C.R.S. 8-14.4-102(5)-(6).)

Principal is not required to ​agree ​with, or ​act on, incorrect concerns​: If a worker’s concern is reasonable but incorrect, the principal is not required to agree with it, or to take any action the worker requests. It just cannot fire or otherwise act against the worker for raising that concern (for example, with a demotion, discipline, a cut in pay or hours, or an undesired transfer or shift change).

PHEW requires companies to allow individuals to wear their own desired pandemic-related safety gear, so long as it is more (not less) protective than that required by law and by the company.

A principal must allow, and cannot act against a worker for, “voluntarily wearing at the worker’s workplace the worker’s own personal protective equipment, such as a mask, faceguard, or gloves” (“PPE”) — with these limits and conditions on the PPE that the worker has a right to wear (C.R.S. 8-14.4-102(3)):

  • only PPE that “provides ​a higher level of protection than the equipment provided by the principal”;
  • only PPE that “is recommended by a federal, state, or local public health agency with jurisdiction over the worker’s workplace”; and
  • only PPE that “does not render the worker incapable of performing the worker’s job or prevent a worker from fulfilling the duties of the worker’s position.”

PHEW prohibits non-disclosure agreements that would otherwise impair an employee’s rights under PHEW. 

HFWA – Sick leave and other requirements

As explained in the CDLE’s INFO 5 and 6, HFWA takes effect in three stages.

Stage 1: HFWA’s immediate requirements

Effective immediately, all employers, irrespective of size, must

  • Offer leave that mirrors the federal FFCRA (Cares Act) leave currently required for coronavirus purposes.
    • While this new state law mirrors the requirements of the federal FFCRA, it expands the FFCRA in at least one major respect. This new Colorado law now requires such leave for employers of all sizes; whereas, the FFCRA does not apply to companies with more than 500 workers and has possible exemptions for employers with fewer than 15 workers.
    • Additionally HFWA offers no tax credits for the payment of this new leave. Whereas the FFCRA allows for the costs of such leave to be passed through effectively to the federal government in the form of tax credits, this means large employers who are not subject to the FFCRA apparently will have to absorb the costs of this new leave.  
    • The process for requesting and granting HFWA leave tracks the FFCRA’s in many respects, including the types of documentation involved.
      • However, the HFWA explicitly states that an employee’s failure to provide documentation or advance notice is generally not grounds for denying the leave.  “Documentation is not required to take paid sick leave, but can be required as soon as the employee reasonably can provide it” (quoting the CDLE’s INFO 6A).

Notice can be oral, and must provide only enough information for an employer to determine whether the leave is for an HWFA purpose. An employer may not require notice to include information or documentation beyond what is allowed in the documentation above. An employee’s representative (​e.g., spouse, adult family member, or other responsible party) may provide the notice if the employee cannot do so personally. If an employee fails to give notice, the employer must notify the employee of the failure and provide an opportunity to provide notice before denying the requested leave.

    • Existing leave policies can comply if they otherwise meet or exceed the HFWA’s requirements.
  • Post the required poster (Spanish).
  • Notify workers of their HFWA rights (see above regarding doing so by distribution of the poster and/or INFO 5, 6A and 6B).

Workers have complaint and anti-retaliation protections; however, the anti-retaliation provisions do not protect employee abuse of the HFWA as explained by the CDLE in INFO 6B:

HFWA disallows acting against employees for ​incorrect complaints or information, as long as the employee’s belief was reasonable and in good faith. (C.R.S. 8-13.3-407(3).) Employers ​can impose consequences (firing or otherwise) for misusing paid leave, dishonesty, or other leave-related misconduct. (C.R.S. 8-13.3-408.)

  • Example: ​An employer denies an employee paid leave for a “life coach” appointment. The employee files a complaint at the Division, and tells coworkers the employer is wrongly denying paid leave. The Division rules that this appointment was ​not HFWA-covered. That means the employer did nothing wrong by denying leave. But without evidence the employee’s belief that HFWA covered the appointment was unreasonable or in bad faith, the employer ​can’t ​ take action against the employee for requesting leave, filing a complaint, or telling co-workers she believed the employer violated HFWA.
  • Example:​ An ​employer​ grants​ an ​employee ​request ​for​ paid​ leave​ for a ​blood ​test ​and​ physical​ exam.​ The employer then learns the employee went bowling and never really had that appointment, so it (A) denies the request for paid leave and (B) fires the employee for dishonest misuse of leave. The employee files a complaint claiming (A) denial of paid leave and (B) retaliation against using HFWA rights. The employer did nothing wrong: (A) leave was not for an HFWA purpose, and (B) the firing was not retaliation because by taking leave with no HFWA purpose, the employee did not act reasonably or in good faith.

Stage 2: HFWA’s 1/1/2021 requirements

Effective 1/1/2021, for companies with more than 15 employees:

  • The HFWA’s (and FFCRA’s) pandemic sick leave requirements will have ended. Instead, an employer will be required to offer at least 48 hours (for hourly and 6 days for salaried workers) of sick leave for employees when
  1. having a mental or physical ​illness, injury, or health condition that prevents them from working;
  2. needing to get ​preventive medical care​, or to get a ​medical ​diagnosis, care, or treatment​, of any mental or physical illness, injury, or health condition;
  3. needing to ​care for a family member ​who has a mental or physical illness, injury, or health condition, or who needs the sort of care listed in category (2);
  4. the employee or the employee’s family member having been a victim of ​domestic abuse, sexual assault, or criminal harassment​, and needing leave for related medical attention, mental health care or other counseling, victim services (including legal services), or relocation; or
  5. due to a ​public health emergency​, a public official having ​closed ​either (A) the employee’s ​place of business​, or (B) the ​school or place of care ​of the employee’s child, requiring the employee needing to be absent from work to care for the child.
  • That leave will have to accrue at least at the rate of 1 hour per every 30 hours worked. Leave may be front loaded.
  • That leave may be capped at 48 hours per year.
  • That leave must be allowed to roll-over year-to-year (though again subject to a cap if the employer so elects).
  • That leave must be allowed for hourly and salaried employees, whether full-time or part-time, with accruals starting on the date of hire.
  • Note: Existing leave policies can comply if they otherwise meet or exceed the HFWA’s requirements.
    • With regard to PTO policies in particular, the 48 hour/6 day requirement is met so long as the full compliment of PTO exceeds such amounts. ‘Compliance can be through a broader paid leave policy, such as allowing “paid time off” for any purpose, health-related or not — as long as the policies (A) provide as much time off as HFWA requires, (B) for all conditions and situations that HFWA covers.”‘
    • Still relying on existing policies may be difficult for many companies as current sick leave policies often (a) provide for leave only when employees are sick (not for the other reasons set forth above), (b) provide only 5 not 6 sick days, (c) apply to employees after a 90-day probationary period and (d) do not cover part-time employees. These are just some examples of the kinds of current sick leave policies that will need to be revised to come up to HFWA’s requirements.
      • Additionally, policies should be revised to impose the permitted 48 hour/6 day cap; otherwise, as required, the sick leave will carry over and continue to accrue year after year.
  • Provide for at least 80 hours of sick leave in the event of another public health emergency. This leave will not be required in addition to the 48 hours/6 days required above; rather, leave requirements may be supplemented to cover the 80-hours of pandemic leave in the event of another public health emergency.
  • And as with the initial pandemic-leave requirements (see above), the HFWA explicitly states that an employee’s failure to provide documentation or advance notice is generally not grounds for denying the leave.
    • Additionally documentation may only be required when the absence is of 4 or more days, per CRS 8-13.3-404(6).

Stage 3: HFWA’s 1/1/2022 requirements

Effective 1/1/2022, the HFWA’s requirements will attach to employers of 15 or fewer.

HFWA and part-time employees

As noted, HFWA leave is required for part-time employees.

In footnote 2 of INFO 6A, the CDLE explains that Stage 1 HFWA leave (FFCRA-type pandemic leave) is to be provided to part-time employees, as follows:

​Leave for a part-time employee with a regular schedule is at the number of hours normally worked in a two-week period. If an employee’s hours vary, the employer must use their average hours over the six months before the leave. If the varied-schedule part-timer was employed less than six months, the employer must use the number of hours the employee agreed to work when hired, or if no such agreement exists, the average daily hours the employee was scheduled to work over their entire employment. (These are methods the U.S. Department of Labor adopted, 29 C.F.R. 826.21(b), so employers can use them for federal and Colorado law.)

And footnote 5 of INFO 6B explains the same for the availability of Stages 2 and 3 HFWA leave (general sick leave) for part-time employees, as follows:

​Leave for a part-time employee with a regular schedule is at the number of hours normally worked in a two-week period. If an employee’s hours vary, employers must use the employee’s average hours over the six months before leave started. If the varied-schedule part-timer has been employed less than six months, the employer must use the number of hours the employee agreed when hired, or if there is no such agreement, the average daily hours the employee was scheduled to work over their entire employment. Any of these calculations include hours the employee took leave, in addition to hours worked. (These are the methods the U.S. Department of Labor adopted, so employers can use the same method for federal and Colorado law.)

HFWA and CBAs

As explained in the CDLE’s INFO 6B, the HFWA allows for collectively bargained leave instead so long as it is “equivalent or more” than the HFWA requires:

Example: ​ A CBA can depart from the HFWA requirement that leave must be in hourly increments, but cannot eliminate HFWA rights to take leave without interference (or, relatedly, to file a complaint if HFWA is violated). 

HFWA and business closures

When Stage 2/3 HFWA leave kicks in, it will not be required for periods when an “entire business” is “completely closed.”

No paid leave required if an entire business is completely closed​. ​Unless a workplace is closed due to a temporary government quarantine/isolation order, no paid leave applies ​if an entire business is completely closed ​(whether temporarily or permanently) – because then, workers aren’t on “leave,” they’re on furlough or layoff (which makes unemployment insurance, not paid leave, the possible remedy).

Defining a public health emergency

Both PHEW and HFWA discuss the phrase “public health emergency” as periods recognized as such by ‘either (A) “a public health order issued by a state or local public health agency” or (B) “a disaster emergency declared by the governor based on a public health concern”’ (quoting the CDLE’s INFO 5). The CDLE notes in footnote 3 of INFO 6B that, starting at least 1/1/2021, a public health emergency need not be related to coronavirus.

Counting years

In footnote 4 of its INFO 6B, the CDLE states that, unless an employer specifies otherwise, years will be counted, at least for HFWA purposes, on the basis of a calendar year. 

If an employer doesn’t say otherwise, the “year” when paid leave accumulates is a ​calendar​ year, because HFWA’s broad leave requirements all start with calendar years: January 1, 2021, for most employers; January 1, 2022, for small employers. But an employer ​can ​ choose a different annual cycle if (A) it tells employees in writing in advance, and (B) switching to a different cycle doesn’t diminish employee HFWA rights. 

Successor liability

The HFWA imposes successor liability on a buyer who “acquires all of an organization, a trade, or a business or substantially all of the assets of one or more employers,” quoting CRS 8-13.3-402(12). See also CRS 8-13.3-403(8).

Colorado unemployment agency continues trend of ruling in favor of workers who decline to return to work

A previous post addressed the requirement that workers return to work — or face loss of unemployment — when an offer to return (to comparable work) is extended, unless the worker is a “vulnerable individual” or otherwise unable to return due to coronavirus-related reasons. As noted there, the initial report was that the state was tending to find in favor of employees by a large margin. The Denver Business Journal is reporting today that the state unemployment agency is continuing that trend, now finding 84% of the time in favor of workers.

Colorado Department of Labor and Employment officials have received about 1,100 submissions from employers about workers who have refused to come back to work in recent weeks and want to keep receiving jobless benefits. And of the 869 cases that CDLE officials have adjudicated, only 16% have ended in workers being told to return to their positions or give up their unemployment payments, chief communications officer Cher Haavind said.

In the vast majority of cases, workers claiming they can’t safely return to work fall into one of two categories delineated by federal and state law as allowing them to refuse to go back to an environment where they would interact with many co-workers or customers, Haavind said. One is that they are part of a vulnerable population that would make them more susceptible to catching coronavirus — people over age 65 or who have underlying medical conditions such as heart troubles or being immunocompromised. The second is that they are caring either for someone who is at increased risk of contracting the virus or are caring for a child out of school.

Considering a voluntary internal audit to prepare for Colorado’s new equal pay law?

Last year I co-authored an article for the Colorado Lawyer about Colorado’s new equal pay law (the Colorado Equal Pay for Equal Work Act, “CEPEWA”), with two of CEPEWA’s drafters, Sarah Parady and Charlotte Sweeney. CEPEWA will take effect January 1, 2021. In our article, we noted that CEPEWA “CEPEWA does not grandfather current pay disparities” and further that “proof of intent to discriminate is not an element of a CEPEWA violation.” We recommended employers consider performing a voluntary internal audit to identify and eliminate any inadvertent pay disparities. Indeed CEPEWA recognizes a possible reduction of exposure if internal audits are done.

A new article was just published in the Colorado Lawyer discussing what such an audit might look like.

Source: Mind the Gap: Practical Solutions to Minimize Pay Equity Claims, by Christine Lyman, Lonnie Giamela, and LaLonnie Gray, The Colorado Lawyer, vol. 49 no. 5 (May 2020)

Colorado unemployment disputes skyrocket as employers begin to offer returns to work that employees decline, with CDLE at least initially tending to rule for workers

As previously posted on this blog, the Colorado Department of Labor and Employment Unemployment created a new portal for employers to use to report when an employee refuses after being offered to return to work; the refusal will generally render the individual ineligible for further unemployment, unless the individual can prove they are “vulnerable” and that the company has inadequate coronavirus protections in place.

The Denver Business Journal is reporting that approximately 150 workers have already advised the Colorado Department of Labor and Employment that they do not wish to return to work and would rather stay on unemployment due to concerns about coronavirus, while 200 employers have used the new portal to report refusals.

How is the CDLE handling these disputes? The Denver Business Journal advises the agency is attempting to investigate each claim individually, without agency representatives actually going to jobsites though.

Instead, workers will be asked to explain what underlying condition they have that makes it unsafe for them to return to work or why they feel the workplace is an unsafe environment, and employers will be asked if the worker is coming back at the same job and pay rate and if efforts have been made at increased sanitation and social distancing.

Who’s winning these disputes? For now the Denver Business Journal reports the CDLE is ruling generally in favor of the workers.

So far, CDLE officials, who have gone through about 55 claims, are coming down on the sides of the workers at a ratio of about 10-to-1, said Jeff Fitzgerald, unemployment insurance division director.

The CDLE does not explain in the article how it plans to address this issue going-forward especially if, as reported in the Denver Post, the combination of traditional unemployment benefits plus pandemic unemployment benefits is high enough that a “majority” of workers in Colorado are actually earning more money on unemployment currently than they would in their job if returned.

The cutoff point is around $30 an hour in Colorado, according to the study by Gregory Miller, a CFA and graduate researcher at CSU. Make more than that and the financial incentive is to return to work. Make less than that, and collecting unemployment pays better, especially if a job doesn’t come with health insurance and other benefits.

The combination of that “financial incentive” plus health concerns about the possible coronavirus-related implications of returning to work around others, even subject to Colorado’s social distancing guidelines, means the CDLE is going to be required to address many, many more such disputes going-forward.

Colorado Court of Appeals issues strong ruling on “horizontal veil piercing”

The Colorado Court of Appeals issued a strong decision involving “horizontal veil piercing.” The case involved a junior creditor suing his debtor and its senior creditor, alleging that the debtor and senior creditor were commonly owned. The debtor was owned in large part (81.25%) by the same five owners who owned 100% of a third company, which in turn owned 100% of the senior creditor. The junior creditor argued that the corporate veils between the entities should be pierced, that they were all “alter egos” of each other. The debtor argued that the senior creditor had been created solely for the purpose of holding the senior debt, which had subordinated his own claim.

Although the trial court had ruled in the plaintiff’s favor, the Colorado Court of Appeals reversed. The court held that the sister entities’ veils could only be pierced if the corporate veil between each of the entities and their respective owners were pierced. Here the court held that the plaintiff had failed to muster sufficient evidence to warrant piercing all of the corporate veils involved.

In so ruling the court re-affirmed that it is not sufficient to show common owners, and/or even common officers and directors. Commonality of owners, officers and directors is common in corporate structuring. Additionally it was not sufficient to show that the one entity had been (arguably) created for the purpose of holding the senior debt simply to keep the plaintiff subordinate; even if true, holding a note is a lawful purpose for which an entity may be formed.

Source: Dill v. Rembrandt Group, Inc., 2020 COA 69 (Colo.App. 4/16/2020).

BREAKING NEWS: Gov. Polis orders in-person Colorado workforce reduction of 50% – Denver Business Journal

The Governor’s order is not yet available, but the Denver Business Journal is reporting that “The order does not apply to critical, 24-hour businesses like health care, manufacturing, agriculture and public services such as trash collection and mail delivery.” In his press conference Governor Polis stated verbally the order will take effect Tuesday March 24, 2020 and that “If you can ensure no employees are closer from (sic, than) six feet from one another during the work day, you can continue.” The order will expire April 10, 2020 11:59 PM.

Source: www.bizjournals.com/

UPDATE 3-23-2020: The order is now available, as is a FAQ from the Governor’s office.

The order’s operative language, including an explanation of the possible exemption for employers that can certify 6′-distancing is, as follows:

The executive order directs all employers to implement tele-work options to the greatest extent possible. If tele-work is not practical or possible, employers are encouraged to stagger work schedules to reduce the proximity of employees during work hours and to keep employees on payroll. This Executive Order does not apply to any employer that can certify that employees are no closer than six feet from one another during any part of their work hours.

The FAQ provides further explanation as to the industries that are exempt from the order. Exempt industries include defense contractors, oil and gas production companies, construction companies, and a variety of other industries such as groceries, pharmacies, healthcare, law enforcement, etc. The FAQ also suggests that “Planes and any other form of travel should only be used for essential purposes.

Unemployment Insurance Worker FAQs | Colorado Department of Labor and Employment

Want a handy reference of Frequently Asked Questions (FAQs) related to Colorado’s Unemployment Insurance Program and availability of unemployment benefits as we go through this coronavirus experience? Check the state’s FAQ here: www.colorado.gov/pacific/cdle/unemployment-insurance-worker-faqs

Follow-up on new COMPS Order information from CDLE – 4 of 4

As previously discussed on this blog, the Colorado Division of Labor and Employment recently finalized its new wage order, titled COMPS Order 36. COMPS Order 36 has proven to be an overhaul of existing Colorado law, reaching many employers previously exempt from prior wage orders. The COMPS order has left many unanswered questions. In response this blog noted that the CDLE has just issued some additional information. AS explained in that post, employers should review the CDLE’s summary that it emailed out regarding its new information, which email is copy-pasted into that blog post.

As previously discussed on this blog, the Colorado Division of Labor and Employment recently finalized its new wage order, titled COMPS Order 36. COMPS Order 36 has proven to be an overhaul of existing Colorado law, reaching many employers previously exempt from prior wage orders. The COMPS order has left many unanswered questions. In response this blog noted that the CDLE has just issued some additional information. AS explained in that post, employers should review the CDLE’s summary that it emailed out regarding its new information, which email is copy-pasted into that blog post.

Employers curious how the CDLE will interpret the new order’s tip credit rules, including its continued use of the 80/20 rule that is being eliminated at the federal level but now being maintained at the Colorado state level, should review the CDLE’s Interpretive Notice & Formal Opinion (INFO) #3, which details the CDLE’s anticipated process for claims handling.

As a reminder, this blog recently noted an article by Bloomberg BNA surveying last year’s court decisions, which reflect an unwillingness by lower courts to accept even the federal government’s efforts to eliminate the 80/20 rule.

Follow-up on new COMPS Order information from CDLE – 3 of 4

As previously discussed on this blog, the Colorado Division of Labor and Employment recently finalized its new wage order, titled COMPS Order 36. COMPS Order 36 has proven to be an overhaul of existing Colorado law, reaching many employers previously exempt from prior wage orders. The COMPS order has left many unanswered questions. In response this blog noted that the CDLE has just issued some additional information. AS explained in that post, employers should review the CDLE’s summary that it emailed out regarding its new information, which email is copy-pasted into that blog post.

Employers curious how the CDLE will enforce wage claims should review the CDLE’s Interpretive Notice & Formal Opinion (INFO) #2, which details the CDLE’s anticipated process for claims handling.

Follow-up on new COMPS Order information from CDLE – 2 of 4

As previously discussed on this blog, the Colorado Division of Labor and Employment recently finalized its new wage order, titled COMPS Order 36. COMPS Order 36 has proven to be an overhaul of existing Colorado law, reaching many employers previously exempt from prior wage orders. The COMPS order has left many unanswered questions. In response this blog noted that the CDLE has just issued some additional information. As explained in that post, employers should review the CDLE’s summary that it emailed out regarding its new information, which email is copy-pasted into that blog post.

One item included in that email was a link to the CDLE’s own summary of COMPS Order 36. At “only” four pages, this summary is an easy to read introduction to this new law, which all employers should take time to review before the COMPS Order’s effective date of March 16, 2020. As employers do, they should also skim the CDLE’s poster, which is its own summary.

Follow-up on new COMPS Order information from CDLE – 1 of 4

As previously discussed on this blog, the Colorado Division of Labor and Employment recently finalized its new wage order, titled COMPS Order 36. COMPS Order 36 has proven to be an overhaul of existing Colorado law, reaching many employers previously exempt from prior wage orders. The COMPS order has left many unanswered questions. In response this blog noted that the CDLE has just issued some additional information. As explained in that post, employers should review the CDLE’s summary that it emailed out regarding its new information, which email is copy-pasted into that blog post.

One item included in that email is a link to the CDLE’s own summary of COMPS Order 36. At “only” four pages, this summary is an easy to read introduction to this new law, which all employers should take time to review before to note is that the CDLE has now provided its COMPS Order 36 poster, which is to be used in complying with Rule 7.4 of the new order. That Rule 7.4 provides, as follows:

7.4 Posting and Distribution Requirements.

7.4.1 Posting. Every employer subject to the COMPS Order must display a COMPS Order poster published by the Division in an area frequented by employees where it may be easily read during the work day. If the work site or other conditions make a physical posting impractical (including private residences employing only one worker, and certain entirely outdoor worksites lacking an indoor area), the employer shall provide a copy of the COMPS Order or poster to each employee within his or her first month of employment, and shall make it available to employees upon request. An employer that does not comply with the above requirements of this paragraph shall be ineligible for any employee-specific
credits, deductions, or exemptions in the COMPS Order, but shall remain eligible for employer- or industry-wide exemptions, such as exempting an entire employer or industry from any overtime or meal/rest period requirements in Rules 4-5.
7.4.2 Distribution. Every employer publishing or distributing to employees any handbook, manual, or written or posted policies shall include a copy of the COMPS Order, or a COMPS Order poster published by the Division, with any such handbook, manual, or policies. Every employer that requires employees to sign any handbook, manual, or policy shall, at the same time or promptly thereafter, include a copy of the COMPS Order, or a COMPS Order poster published by the Division, and have the employee sign an acknowledgement of being provided the COMPS Order or the COMPS Order poster.

7.4.3 Translation. Employers with any employees with limited English language ability shall:
(A) use a Spanish-language version of the COMPS Order and poster published by the Division, if the employee(s) in question speak Spanish; or
(B) contact the Division to request that the Division, if possible, provide a version of the COMPS Order and poster in another language that any employee(s) need.

Employers are reminded that, while the much-discussed overtime provisions of COMPS Order 36, Rule 7.4 suggests it will take effect on the COMPS Order’s own effective date of March 16, 2020. Employers should consider therefore complying by posting, distributing and obtaining signed acknowledgement pages for the COMPS Order in its entirety or just the poster, and to do so in English or such other language, including Spanish, as employees “with limited English language ability” may speak.

 

BREAKING NEWS: COMPS Order 36

The Colorado Division of Labor and Employment has just advised as follows:

The Division has posted the Colorado Overtime & Minimum Pay Standards (COMPS) Order #36  Poster on our COMPS Order #36 – Informational Page. This is the “Poster” to use to comply with the “Posting and Distribution Requirements” COMPS Rule 7.4. As a reminder, Colorado Overtime and Minimum Pay Standards Order (“COMPS Order”) #36 is effective March 16, 2020.

The Division has also published guidance in the form of three new INFOs (Interpretive Notice & Formal Opinions) available on the Division’s Laws, Regulations, and Guidance webpage. The three INFOs published today are:

INFO # 1: Colorado Overtime & Minimum Pay Standards Order (COMPS Order) #36

INFO # 2: DLSS Wage Claim Investigation Process

INFO # 3 Tips (Gratuities) and Tipped Employees Under Colorado Wage Law

The Division’s INFOs are not binding law, but they are the Division’s officially approved opinions and notices to employers, employees, and other stakeholders as to how the Division applies and interprets various statutes and rules. The Division will continue to post and update INFOs on various topics; to suggest a topic, please email cdle_labor_standards@state.co.us.

Please continue to check this blog, www.l2slegal.com, where additional information regarding the CDLE’s announcement will be posted soon.

Colorado Court of Appeals clarifies unemployment eligibility rules related to marijuana use

The Colorado Court of Appeals has clarified how Colorado’s medical and recreational marijuana laws impact eligibility for unemployment. The case involved an unusual fact pattern that provided the court with a springboard to articulate four rules. The worker was on medical leave, but worked for a financial institution to which he personally owed money. Although he was on medical leave, he still had to come in occasionally to make payments on the loan he owed his employer. While there to make a payment, HR advised that he had come up for a random drug test, on which he tested positive for marijuana. Thus the Court was faced with a case where the person was still an employee but obviously not engaged in or even able to be engaged in actively performing job duties at the time he was tested.

The lower court looked at only one subsection of the unemployment-eligibility statute, CRS 8-73-108(5)(e)(IX.5). Subsection IX.5 renders a worker who tests positive for even otherwise lawful marijuana to be ineligible for unemployment if the test was taken “during working hours.” Because the employee was on medical leave, the court held his positive test did not arise from a sample taking “during working hours.” The lower court then held that because subsection IX.5 was so specific to marijuana, it was not able to look at other sections of the statute.

The Colorado Court of Appeals reversed. The Court of Appeals held that other subsections still apply, not just IX.5. Looking at all the other subsections, the Colorado Court of Appeals held there are at least four ways a worker can be disqualified form receiving unemployment in Colorado due to otherwise lawful marijuana use:

  1. A positive test “during working hours”;
  2. A positive test during or outside working hours that had or could have had an adverse impact on the company;
  3. A positive test during or outside working hours that interfered with the employee’s job performance;
  4. A positive test during or outside working hours that rendered the employee unable to meet “established job performance or other defined standard.”

Here is the full quote from the Colorado Court of Appeals:

Any conflict among the provisions at issue in this case is not irreconcilable.  Subsection (IX.5) disqualifies an individual for the sole reason that he or she had a positive drug or alcohol test while working, essentially dispensing with the need for an employer to establish any impairment of the employee’s abilities or adverse effect on the employer’s business.  However, subsection (VII) would apply where an employee violates an employer’s rule prohibiting drug use, whether on or off the job, but an employer would be required to demonstrate that the employee’s drug use had, or could have had, adverse impacts on the company.  Similarly, subsection (VIII) could be applied to off-the-job drug use but requires proof that the drug use interfered with the employee’s job performance.  And subsection (XX), when applied in a drug use or testing scenario, requires the employer to establish that an employee’s drug use or failed drug test caused him or her to fail to meet an established job performance or other defined standard.  Because there is no irreconcilable conflict, all provisions of the statute are amenable to harmonious construction, and thus must be given effect.  

Source: M&A Acquisition Corp. v. ICAO, — P.3d —, case no. 19CA0679 (Colo.App. 11/21/19).

Colorado trial courts are not required to blue-pencil non-compete and non-solicit covenants

Even where an agreement says that covenants “shall be” blue-penciled (meaning, rewritten if determined to be unenforceable and narrowed to whatever the court rules would have been enforceable), a trial court in Colorado is not required to do so. In a recent decision, 23 LTD v. Herman, case no. 16CA1095 (Colo.App. 7/25/19), the Colorado Court of Appeals confirmed blue penciling is within a trial court judge’s discretion. The parties cannot, by way of mandatory language like “shall,” not only confer on the judge the authority to re-write their agreement but an obligation to do so.

Simply put, the court is not a party to the agreement, and the parties have no power or authority to enlist the court as their agent. Thus, parties to an employment or noncompete agreement cannot contractually obligate a court to blue pencil noncompete provisions that it determines are unreasonable.

The case is a strong reminder for employers not to over-reach when drafting covenants, non-competes or non-solicits. While a blue penciling clause may give the judge to make some changes like reducing the geographic or temporal reach of the covenant (how many miles/how many months), the parties should not expect a judge will be willing to make changes beyond that, or even of that nature. Whether to blue pencil at all is an issue for each judge.

Fundamentally, it is the obligation of a party who has, and wishes to protect, trade secrets to craft contractual provisions that do so without violating the important public policies of this state.[5] That responsibility does not fall on the shoulders of judges

Careful what you ask for, warns Colorado Supreme Court

The Colorado Supreme Court warned in a recent case that a party who seeks to enforce a settlement agreement — even by merely seeking a declaratory judgment and without actually asserting a breach of the settlement agreement — may make itself liable, if it fails in its action, for attorney fees under the settlement agreement’s fee-shifting clause, especially where that party itself had stated its intent to seek such fees had it been successful.

Having themselves sought attorney fees under that provision, plaintiffs tacitly acknowledged that their claims sought to enforce the Settlement Agreement’s terms. Having done so, plaintiffs cannot now take the opposite position, merely because their lack of success at trial rendered them liable for defendant’s attorney fees under the Settlement Agreement

Source: Klun v. Klun, 442 P.3d 88 (Colo. 6/3/2019).

Reminder, Colorado employers must now provide notice if tip-sharing

Colorado employers are reminded to post a notice, if tip-sharing, for example on menus, at tables, or on receipts, to patrons that “gratuities are shared by employees.” This new posting requirement, Colorado HB 19-1254, took effect August 2, 2019.

Three issues in Colorado regarding vacation pay

Colorado law, CRS 8-4-101 defines vacation to be a part of “wages” when “earned in accordance with the terms of any agreement. If an employer provides paid vacation for an employee, the employer shall pay upon separation from employment all vacation pay earned and determinable in accordance with the terms of any agreement between the employer and the employee.” As such, an employee cannot agree to waive vacation, or any other “wages,” once “earned, pursuant to CRS 8-4-121, and CRS 8-4-109 requires that such vacation, along with all other “wages,” to be paid out in final paychecks.

Despite what seems relatively clear statutory language on first blush, three issues persist. Colorado employers have received some fleshout on at least two.

1. Can an employer impose conditions on the payout of vacation in a final paycheck? The Colorado Court of Appeals says, yes.

A recent Colorado Court of Appeals case suggests the law may not be that simple. In  Nieto v. Clark’s Mkt., Inc. the employer added a twist in its handbook. There, a policy said that an employee “forfeits all earned vacation and pay benefits” if they fail to provide 2-week notice before quitting. The employee cited the foregoing statutes, arguing the vacation could not be waived and had to be paid out in the final paycheck.

The Court of Appeals held for the company. The Court of Appeals looked to the “terms of any agreement,” as required by the statute, in other words, to the language of the vacation policy and held that 2-week notice was a condition of earning the vacation.

Ms. Nieto’s right to compensation for accrued but unused vacation pay depends on the parties’ employment agreement. And that agreement unequivocally says that the vacation pay she seeks wasn’t vested given the circumstances under which she left the Market’s employ.

Is Nieto good law in Colorado, can employers rely comfortably on it? Many would argue that the Colorado Court of Appeals simply got it wrong. However, the deadline for appeal has now passed, so it is certainly the law as between Ms. Nieto and her former employer Clark’s Market, Inc. It is noted too that the decision was selected for official publication, so, unless the Court of Appeals or the Colorado Supreme Court revisit the issue in a future case, it is binding on trial courts. Therefore employers could arguably rely on it for now, so long as they are willing to risk protracted litigation and future appeals.

2. Can an employer apply a use-it-or-lose-it rule to vacation at the end of every year? The Colorado Division of Labor and Employment says, no, but the issue is pending in the Colorado Court of Appeals.

Pending before the Colorado Court of Appeals is Blount, Inc. v. CDLE, in which the Colorado Division of Labor and Employment is asking the Court of Appeals to rule against an employer’s purported use-it-or-lose-it policy. In an apparent effort to end-run the Court’s decision, the CDLE issued on the same day as it filed a brief in the appeal, a new rule (7 CCR 1103-7 rule 2.15) — which it then proceed to rely upon in its brief — stating that employers may not have use-it-or-lose-it policies. How will the Court of Appeals rule? How will the Court of Appeals view the CDLE’s apparent claim-jumping regulation? Will the Court of Appeals take Blount as an opportunity to re-consider or limit Nieto? Stay tuned.

3. Do these same rules apply to PTO or just vacation? The Division of Labor and Employment says, no, these restrictions do not apply to PTO.

As of this summer, callers to the Colorado Division of Labor and Employment will be told it takes the position that these “vacation” rules do not apply to PTO. CRS 8-4-101 speaks only to the inclusion of “vacation” in “wages,” not PTO; therefore, the Division will not currently pursue an administrative wage claim for PTO.

Notwithstanding, employers should realize that some plaintiff attorneys will take such claims to court, but they do so under a contract law theory, not under Colorado’s wage statutes, and as a contract claim, such claims do not carry attorney fees or penalties.

Colorado criminalizes wage theft

Effective January 1, 2020, Colorado has criminalized wage thefts. This new law applies to “employers,” a term defined to be commensurate with the Fair Labor Standards Act’s coverage, and protects “employees,” as defined to exclude independent contractors.

Under this new law it will be a crime to:

  • willfully
  • refuse to pay or “falsely” deny “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, opress, hinder, coerce, delay, or defraud” the employee.”

Who may be charged with this crime? “Every employer or other person who intentionally, individually or as an officer, agent, or employee of a corporation or other person” who “pays or causes to be paid to any such employee a wage less than” that required.

This new crime will rise to the level of a felony if the amount at-issue equals or exceeds $2,000.

Employers, including all individuals involved in the payroll function and related decisions whether or not to pay wages, should anticipate that employees will seek to have such matters prosecuted, in addition to or instead of civil wage claims. This new Colorado law is all the more reason for employers to carefully review their wage compliance efforts.

Reminder, Colorado employers, new ban-the-box law will take effect soon

Colorado employers are reminded that Colorado’s new ban-the-box law will take effect September 1, 2019 for employers with more than 10 employees (then September 1, 20121 for all other employers). Together with the crop of other new Colorado employment laws this year, Colorado employers should:

  • Review and revise their handbooks, workplace policies, and hiring documents accordingly.
  • Review and revise their hiring and promotion practices.
  • Consider undertaking an audit of pay levels as encouraged now by HB19-085.
  • Review wage compliance practices.
  • Train supervisor, manager and HR accordingly.

Colorado’s workers compensation requirement might be unconstitutional, at least in part?

An interesting case is winding its way through the Colorado courts.

In Colorado employers of three or more must carry workers compensation insurance. In this case, the employer employed typically between two and four individuals. It failed to carry workers compensation insurance for three different periods of time. When that came to the attention of the Colorado Department of Labor and Employment, the company was fined a whopping $841,200.

The company fired back by challenging the constitutionality of the state’s fines. The fines were issued pursuant to the formulas in Colorado workers compensation laws, CRS 8-43-409(1)(b) and Rule 3-6(D), 7 CCR 1101-3. The company, nonetheless, contends that the fines are “excessive” and therefore in violation of the United States Constitution’s Eighth Amendment.

In this decision, the Colorado Supreme Court ruled that the company might have a case. The court first held that the Eighth Amendment does apply to and protects corporations from excessive governmental fines, not just individuals. Next, the Court outlined the test for analyzing whether a fine is “excessive,” in other words, prohibited. Then the Court remanded the case for further consideration by the Court of Appeals under this new test.

In sum, we hold that the Eighth Amendment does protect corporations from punitive fines that are excessive. The appropriate test to apply in assessing whether a regulatory fine violates the Excessive Fines Clause is the “gross disproportionality” test. In assessing proportionality, a court should consider whether the gravity of the offense is proportional to the severity of the penalty, considering whether the fine is harsher than fines for comparable offenses in this jurisdiction or than fines for the same offense in other jurisdictions. In considering the severity of the penalty, the ability of the regulated individual or entity to pay is a relevant consideration. And the proportionality analysis should be conducted in reference to the amount of the fine imposed for each offense, not the aggregated total of fines for many offenses.

Will the company win under this new approach? It’s too soon to tell. Interested readers will want to follow this case as it continues to be litigated.

Source: Colorado Department of Labor and Employment v. Dani Hospitality, LLC, case no. 17SC200 (Colo. 6/3/19).

Gov. Polis signs three new Colorado laws into effect

The Denver Business Journal is reporting that Colorado Governor Polis has signed three new Colorado laws into effect. As the DBJ reports, each came with some opposition and will have impacts on employers in Colorado.

Gov. Jared Polis on Monday signed a trio of bills that he said will improve the fortunes of working-class Coloradans — even as opponents have criticized the measures will make life harder for employers and possibly steer companies away from expanding in Colorado.

These laws are:

  1. Colorado House Bill 19-1025 is a “Ban the Box” law. It restricts, with some exceptions, an employer’s ability to inquire, especially on applications, about prior criminal history.
  2. Colorado House Bill 19-1210, which permits local governments to increase the minimum wage in their jurisdictions above Colorado’s statewide minimum.
  3. Colorado HB 19-1306, which requires the Colorado Department of Labor and Employment to report “data that it currently collects regarding the call center work force, including tracking call center jobs and wage analysis of customer service employees,” quoting the bill’s official summary.

These laws now join in effect, the previously signed (May 22, 2019) HB19-085 (Equal Pay for Equal Work Act) and (May 16, 2019) HB19-1267 (criminalizing “wage theft” in cases of willful failure to pay wages owed).

Taken together, employers have good reason to immediately:

  • Review and revise their handbooks, workplace policies, and hiring documents accordingly.
  • Review and revise their hiring and promotion practices.
  • Consider undertaking an audit of pay levels as encouraged now by HB19-085.
  • Review wage compliance practices.
  • Train supervisors, managers and HR accordingly.

 

Denver federal court, one of the most pro-employee?

In what is likely to be a bombshell article amongst Colorado labor and employment attorneys, Bloomberg BNA reported today that its analysis of judicial statistics shows Denver’s federal court to be the most employee-plaintiff friendly of 11 federal courts it has analyzed. “The other courts Bloomberg Law has reviewed are: the Eastern District of New York, the Northern District of Alabama, the Northern District of Illinois, the Western District of Washington, the Middle District of Florida, the Western District of Wisconsin, the Northern District of Texas, the Central District of California, the Western District of Oklahoma, and the Northern District of Ohio.”

The District of Colorado grants employers’ motions for early dismissal—made right after a lawsuit is filed—just 36.7 percent of the time in job bias and similar cases. It dismisses such cases on the eve of trial—following a motion for summary judgment—at a 45.8 percent clip. That gives Denver workers something extra to be cheery about, in addition to the more than 200 beers crafted in the city each day and the playoff-contending Colorado Rockies.

Interested in how particular judges rank? Bloomberg BNA analyzed them individually and provides what it views as the relevant statistics for each, concluding,In all, eight of the 11 judges granted early motions to dismiss in employment cases less than 40 percent of the time.

Source: Workers Suing in Denver Federal Court Feeling Rocky Mountain High, P. Dorrian (9/21/18).

“Colorado denies widow half of late husband’s workers’ compensation due to his marijuana use”

The Denver Post reports, “The state of Colorado is denying half the workers’ compensation death benefits to a woman whose husband died while working on a ski lift because he had marijuana in his system.” Colorado workers compensation law does impose a 50% penalty on workers compensation benefits (not including medical expenses) for workers who violated safety rules, including positive drug tests. The Denver Post article reports that in this, the first case to raise the issue, a worker’s positive test for marijuana, following his having been killed on the job, was deemed grounds to deny his widow 50% of the death benefits to which she and their family would otherwise have been entitled. The case has not been appealed to the courts; it currently remains at the agency level. However the issue is ultimately resolved, the case remains a powerful reminder that marijuana remains, in all states, a criminally prohibited drug. While some states, like Colorado, have exceptions from prosecution for state law enforcement, applicable to medical and even recreational use, those are merely exceptions from criminal law enforcement; the use of marijuana itself remains a criminally prohibited act. 

Source: “Colorado denies widow half of late husband’s workers’ compensation due to his marijuana use,” the Denver Post (7/17/18).

Individual liability possible for wage claims, in Colorado

In a 2003 decision, Leonard v. McMorris, the Colorado Supreme Court ruled that the Colorado Wage Claim Act does not itself create statutory liability for individuals who own or manage a company. But what about other theories?

In a recent decision, Paradine v. Goei, the Colorado Court of Appeals held that Leonard does not foreclose personal liability. Rather, it simply held that the Colorado Wage Claim Act itself cannot be a vehicle for imposing personal liability. The Colorado Court of Appeals held in this case that there are, at least, two other “well-established” theories for holding an individual liable for the acts of a company: “peircing the corporate veil, and when an officer acts on behalf of an undisclosed principal.” Oversimplifying these two principles, (1) the first allows a person to be held liable for the acts of his entity if, in running that entity, he has not obeyed corporate formalities and ignored the distinction between the entity and himself; (2) the latter allows a person to be held liable when he seems to have acted on his own behalf but later wishes to claim, unbeknownst to the plaintiff, that he was actually acting behind an entity.

In this case the Court of Appeals held the plaintiff had adequately pled a case to pierce the corporate veil and was, therefore, entitled to seek discovery in pursuit of his allegations. In particular the court noted the plaintiff alleged that the individual collected the company’s money to be used to pay wages, used the company’s revenues for “his own personal use” and “diverted corporate funds” to pay his own expenses, including his “apartment lease” and “vehicle payments,” treating the company as his “alter ego” while commingling bank accounts and credit cards.”

Paradine will no doubt stimulate the filing of individual liability claims in Colorado wage cases.

Source: Paradine v. Goei, case no. 16CA1909 (Colo.App. 4/19/18).

When an “interstate” driver isn’t, but is …

Both federal law (the Fair Labor Standards Act, “FLSA”) and Colorado law (the Colorado Minimum Wage Act, the Colorado Wage Claim Act, and the Colorado Minimum Wage Order) exempt “interstate drivers.” Under FLSA, a driver can be considered “interstate” if she, like taxi drivers, is subject to the federal Motor Carrier Act, even where she drives only within the state. This means taxi drivers are not entitled to overtime under federal law.

In this case, the Colorado Court of Appeals affirmed the Colorado Department of Labor and Employment’s view that Colorado intended a stricter approach. According to the Court and the DOLE, Colorado’s overtime exemption does require that a driver actually drive across state lines as part of their job. Accordingly, the Court held, Colorado taxi drivers are entitled to overtime under state law, even though they would not be under federal law. As the Court explained, FLSA permits states to adopt stronger protections for employees than federal law. Here, the Court held Colorado did so because Colorado’s overtime exemption is worded slightly differently than FLSA’s.

Remaining issues include the applicability of this ruling to “gig” drivers, like those who drive through Uber or Lyft. Also, while this case has held that taxi drivers who don’t actually drive in and outside the state are entitled to overtime, it did not address whether other parts of Colorado wage law, including minimum wage requirements, also apply to such drivers.

Source: Brunson v. Colorado Cab Company, LLC, case no. 16CA1864 (1/8/18).

Colorado Supreme Court holds statute of limitations on wage claims runs from pay period following its due date

The Colorado Supreme Court held that the statute of limitations under the Colorado’s Wage Claim Act, CRS. 8-4-101 to -123, begins to run from the pay period when the wage first becomes due and is unpaid.

The facts of the case illustrate the importance of this holding. Like many states, Colorado’s wage claim laws permit an employee to sue at the time of termination for any unpaid wages. Most commonly wage claims involve amounts that are claimed due in that final paycheck, for example, vacation pay, but what about wages that were claimed due in prior periods? This case involved a group of workers who sought wages “as far back as 1992.” Colorado’s wage laws, like federal law (Fair Labor Standards Act, FLSA), set a 2-year statute of limitations on wage claims, or 3 years if the violation is deemed wilful. The plaintiffs argued that the Act allowed them to seek all of their claimed wages, going back decades. In contrast, the company argued that they could seek only wages that came due in their final paycheck, nothing earlier.

The Colorado Supreme Court disagreed with both parties, holding that the plaintiffs can seek any wages that came due in their final paychecks plus any that came due in the 2 years preceding their termination (or 3 if the claim is deemed wilful), but that they cannot seek wages going back farther than that.

We conclude that under section 109, terminated employees may seek wages or compensation that had been earned in prior pay periods but remain unpaid at  termination. This right, however, is subject to the statute of limitations in section 122, which runs from the date when the wages first became due and payable—the payday following the pay period in which they were earned. A terminated employee is thus limited to claims for the two (or three) years immediately preceding termination.

It is noted that the Court there said plaintiffs could seek claims for 2 (or 3) years “immediately preceding termination;” however, it would seem from the language of the Act and the Court’s own reasoning that the Court meant “immediately preceding (the filing of their lawsuit seeking wages upon) termination.” That issue is likely to be litigated in future cases.

Source: Hernandez v. Ray Domenico Farms, Inc., case no. 17SZ77 (Colo. 3/5/18).

Dissenter rights include ability to terminate non-compete?

The Colorado Court of Appeals held that a shareholder’s statutory dissent rights, in at least the facts of the case before it, included the ability to terminate an existing non-compete. In this case, the plaintiff was a doctor at and a shareholder of a clinic. When his clinic merged with another, he disagreed and exercised his statutory right under C.R.S. 7-113-202 to dissent and demand payment for the fair market value of his shares. In addition, he contested the continuing viability of his then-existing non-compete.

In this case, the Colorado Court of Appeals held that he was entitled to be paid the fair market value of his shares but added that he was also relieved of his non-compete. To hold otherwise, the Court of Appeals said, would “further penalize Crocker’s exercise of his right to dissent, rather than protect him from the conduct of the majority” who had voted for the merger.

The decision drew a dissent as to the ruling relieving him of the non-compete. It remains to be seen whether the case will be heard by the Colorado Supreme Court.

In analyzing the case, the Court of Appeals noted a variety of facts, including the geographic radius of the non-compete versus the location of the plaintiff’s residence. It also remains to be seen whether this decision will be limited to its facts.

Source: Crocker v. Greater Colorado Anesthesia, P.C., case no. 2018COA33 (Colo.App. 3/8/18).

Colorado legislative employment law update 2017

The Colorado legislature has closed out its 2017 session. This year’s crop of new employment laws was relatively mild. Highlights included the following:

  • HB17-1214 enhances the Colorado Office of Economic Development’s ability to facilitate employee ownership of existing business. As owners of many business find themselves wanting to retire from their businesses,  the legislature hopes COED will now be better able to help employees to take over ownership.
  • SB17-189 provides employers who need to do background checks involving fingerprints more options than the law enforcement agencies previously permitted.
  • HB17-1021 provides that the Colorado Department of Labor and Employment can release to the public information about employers who have violated state wage laws, but continues to prohibit CDOLE from releasing a company’s trade secrets. Before disclosing information about a company, CDOLE will now provide the employer 20-day notice, allowing it time to object if it believes any information to be disclosed is a trade secret.
  • HB17-1269 expands the reach of preexisting law, which (like the federal National Labor Relations Act) prohibited employers from in turn prohibiting their workers from discussing their wages, hours and working conditions. This bill expands that state law beyond the NLRA to cover even employers who are not subject to the NLRA.
  • HB17-1119 enhances the penalties employers face if they fail to obtain workers compensation coverage for their employees.
  • HB17-1229 fleshes out Colorado’s workers compensation law in regard to mental impairment. It confirms that mental impairment is usually not a recoverable injury, especially when it is the consequence of aspects of the employment relationship, including discharge and discipline. However, workers compensation benefits may be available the mental impairment suffered as a result of a work-related traumatic event.

Failed legislation included the following:

  • HB17-1305 would have brought ban-the-box to Colorado. Ban-the-box laws are being introduced across the country as a way to prohibit employers from asking about an applicant’s criminal history.
  • HB17-1001 would brought back parental leave for children’s academic events (so-called parent-teacher conference leave). In 2009, Colorado passed such a law, but it expired in September 2015 and hasn’t since been revived.

 

Colorado Supreme Court adopts Iqbal-Twombly pleading standard

Under the federal and state rules of civil procedure, are not required to provide much specificity in their pleadings. Indeed the oft-cited rule is that they must simply give “notice” of their claims. This notice pleading rule was tightened in a pair of 2007 U.S. Supreme Court cases, called Iqbal and Twombly. The Iqbal-Twombly standard continues to impose a notice requirement but explains that, in order to give sufficient notice, a plaintiff must plead enough specific facts to raise their claims “above the speculative level,” such that, if the specifically pled facts are true, he would be entitled to relief under “a plausible claim.” This new notice pleading requirement is often called the “plausibility standard.” State supreme courts are free to decide their own rules of procedure. In this case, the Colorado Supreme Court adopted Iqbal-Twombly’s plausibilty standard.

The case is Warne v. Hall, 2016 CO 50 (Colo. 6/27/16).