Colorado State Labor_ Employment

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					  COLORADO DIVISION OF LABOR

STATE LABOR, EMPLOYMENT, AND
  IMMIGRATION LAWS UPDATE

          February 25, 2010




         633 17th Street, Suite 200
           Denver, CO 80202
   www.colorado.gov/cdle/labor
                       COLORADO
              DEPARTMENT OF LABOR & EMPLOYMENT
                                        Executive Director

      Division of              Division of                                  Division of
Employment and Training   Workers’ Compensation    Division of Labor    Oil & Public Safety


  Employment and            Claims Services          Wage and Hour      Boiler Inspection
     Training
                          Dispute Resolution
                           Employer Services                                Carnivals
    Labor Market
                                                   Youth Employment
                             Medical Policy
    Information
                               Research
                                                                           Explosives
                            Medical Service          Labor Relations
   Unemployment               Delivery
     Insurance                                                           Oil Inspection
                             Special Funds
                                                      Immigration
                          Technical Operations
  Workforce Centers                                                    Public Safety Office


                                                                          Public School
                                                                          Construction
               Presentation Content

1. Workplace Compliance Trends and Litigation Directions
2. State Wage and Hour Hot Topics
    a. Minimum Wage
    b. Wage Order Number 26
    c. Wage Act
3. State Immigration-Employment Laws
    a. Employment Verification Law
    b. E-Verify, Public Contracts for Services Law
                         Litigation Trends
          Source: Seyfarth Shaw 2010 Litigation Report
1.   Downturn is likely to fuel more lawsuits...Former employees are
     a fertile source of suits and complaints to government agencies.
2.   Wage and hour litigation / FLSA lawsuits outpace all other types
     of workplace class actions.
3.   Top-ten wage and hour private settlements totaled over $360
     million in 2010, $100 million greater than in 2009.
4.   US DOL hired 250+ new W & H investigators in the U.S.
5.   US DOL Denver announced yesterday a new enforcement
     initiative for restaurants and construction industries. (Denver Post)
                                                                  Colorado Minimum
            Colorado Wage Law                                    Wage Order Number 26
                 Coverage
                                                               Applies to four major industries:
                                                                      Retail and Service
                                                                Commercial Support Service
                                                                     Food and Beverage
                Colorado Wage Act                                    Health and Medical

          Applies to most employees in
                    Colorado
                                                         Rest Periods                         Meal Periods



                                                                           Minimum
                                                                            Wage
Final Payment         Wages                 Deductions
                                                                Tipped                    Overtime
                                                               Employees



             Timely           Pay Periods
            Payment            Paydays



                                                                 Colorado Constitution
                                                                 Article XVIII, Section 15

                                                               Minimum Wage Applies to:
                                                             Employees covered by federal law
                                                              Employees covered by WO 25
 COLORADO MINIMUM WAGE
In 2006, voters passed an amendment to the Colorado
Constitution:
Colorado Constitution, Article XVIII, Section 15
Effective January 1, 2007, Colorado's minimum wage shall be
increased to $6.85 per hour and shall be adjusted annually for
inflation, as measured by the Consumer Price Index used for
Colorado. This minimum wage shall be paid to employees who
receive the state or federal minimum wage. No more than $3.02
per hour in tip income may be used to offset the minimum wage
of employees who regularly receive tips.
 COLORADO MINIMUM WAGE
Date            MW      Tipped MW
January 1, 2010 $7.24   $4.22
January 1, 2009 $7.28   $4.26
January 1, 2008 $7.02   $4.00
January 1, 2007 $6.85   $3.83
August 8, 1998 $5.15    $2.13
   COLORADO MINIMUM WAGE
Minimum Wage, January 1, 2010
• Current Colorado minimum wage: $7.24 and tipped
  employee minimum wage: $4.22
• MW adjustment based on BLS data
    – DBG CPI-U Compares first half of 2008 to first half 2009
    – Anticipated release of BLS data – August 2010
• Federal MW is $7.25, and federal tipped MW: $2.13
• CO MW lawsuit dismissed in Denver District Court
    MINIMUM WAGE ORDER
    NUMBER 26: COVERAGE

• Retail and Service
• Commercial Support Service
• Food and Beverage
• Health and Medical
              OVERTIME PAY
Overtime: Wage Order 26
Time and one-half the regular rate of pay for
any work in excess of:
• 40 hours per workweek – like FLSA
• 12 hours per workday (differs from FLSA)
• 12 consecutive hours without regard to starting
  and ending time (differs from FLSA)
     MEAL AND REST PERIODS
Meal and Rest Periods: Wage Order 26
Non-exempt employee is entitled to:
• At least a ½ hour “duty-free” meal period if the
  scheduled work shift exceeds 5 consecutive hours.
• Compensated 10 minute rest period in the middle of
  each four hour work period.
                     TIP CREDIT
Tip Credit: Wage Order 26
  • Tip Credit - $3.02 credit against minimum wage for
    tipped employees
  • Tipped employee must customarily receive more than
    $30.00 a month in tips
  Nullification of Tip Credit:
  • Employer required sharing of tips with those who do not
    customarily receive tips
  • Employer deducts credit card processing fees
                         WAGE ACT
Wage Act
Wages defined: All earned, vested, and determinable amounts for
labor or service performed by employees regardless of method of
calculation.
•Hourly
•Salary
•Piece-rate
•Commission
•Bonus (non-discretionary)
•Vacation (upon separation – earned in accordance with an agreement)
•Severance and Sick Pay– not defined as wages
                   DEDUCTIONS
Permissible Deductions: Wage Act
• Those required by local, state, or federal law
• Per written agreement between the employer and employee for
  loans, pay advances, goods or services, and equipment or property
• Deductions necessary to cover the replacement cost of a shortage
  due to theft by an employee
• Deduction authorized by the employee and that can be revoked.
  (insurance benefits, savings plans)
• Amount of money or the value of property that the employee
  failed to properly pay or return to the employer (termination only)
                    FINAL PAY
Final Pay: Wage Act
• Employee Quits or Resigns
    – Wages due next regularly scheduled payday
• Terminated Employee
    – Payroll onsite and open – wages due immediately
    – Payroll onsite and closed – wages due 6 hours after beginning
      of employer’s accounting unit’s next regular workday
    – Payroll offsite – wages due no later than 24 hours after the
      start of employer’s accounting unit’s next regular workday
                   FINAL PAY
Penalties Upon Demand: Wage Act
• Upon demand, an employer has 14-days to pay amounts
  believed in good faith are due to employee
• Increased penalties for failure to pay within 14 days of
  receipt of demand; Greater of:
• Average daily earnings up to 10 days, OR
• 125% of wages due up to $7,500, plus
• 50% of wages due over $7,500
TIMELY PAYMENT & PAY PERIODS
Timely Payment and Pay Periods: Wage Act
• An employer must pay on regularly scheduled paydays
• Paydays cannot exceed 10 days following the close of a
  pay period
• Pay periods cannot exceed a calendar month or 30 days
         WAGE ACT CHANGES
Changes to the Wage Act in 2009
Additional fees for bounced paychecks: Three times the
face amount of the check but not less than one hundred
dollars AND actual damages caused by the nonpayment,
including associated late fees.
Paycards as a permissible form of payment (2008).

Changes to the Wage Act in 2010, proposed
legislation: None (at present).
    DIVISION ENFORCEMENT
• 7,000+ annual complaints and written inquiries
• Mediation process averages 35-45 days
• Division is not an advocate for either party
• Cannot guarantee payment or resolution
• Cannot provide legal advice
• Division recovers over $1.3 million per year
   ASSSORTED ENFORCEMENT
• Employee cannot waive rights to earned wages
• Division involvement
• Criminal prosecution
• Civil action
• Federal law / US DOL
      HB 06S-1017 (8-2-122, C.R.S)
      COLORADO EMPLOYMENT
         VERIFICATION LAW




www.colorado.gov/cdle/employmenteligibility
            IMMIGRATION LAWS

You may recall the backdrop from 2007…

Then: Immigrant Hiring Law Perplexing, Denver Post, 12/17/06
 Immigration dilemma, Rocky Mountain News, 12/12/06
 New law a head scratcher, Rocky Mountain News, 12/1/06
 Swift raids – 1,300 or 10% of entire workforce - nationwide
 Iowa meatpacking raids – 300 from town of 2,500, Postville, Iowa
 Possible federal preemption
Now: Continuing education and enforcement
         8-2-122, C.R.S. COVERAGE

   Employers include both public and private employers.
   The law applies to Colorado employees hired on and
    after January 1, 2007.
   Within 20 days after hiring a new employee, the employer
    must have completed the employment eligibility
    verification process.
EMPLOYMENT VERIFICATION LAW
        8-2-122, C.R.S.
 Each employer (includes private and public) in Colorado
   shall complete an affirmation within 20 days after hiring
   a new employee.
 The employer must keep for the term of employment of
   each employee:
     – a written or electronic copy of the affirmation
     – Written or electronic copies of employee’s identity
       documents required by 8 U.S.C. sec 1324 a (Form I-9)
      8-2-122, C.R.S. AFFIRMATION

Employer must affirm within 20 days after hiring a new
employee that the employer:

  Has examined the new employee’s legal work status
  Has retained file copies of documents required by 8 U.S.C. Sec.
   1324a (copies of I-9 identity documents presented by the
   employee)
  Has not altered or falsified the employee’s identification
   documents
  Has not knowingly hired an unauthorized alien
AFFIRMATION SAMPLE
    Available on Division website:
colorado.gov/cdle/employmenteligibility




                Any substantially similar
                affirmation may be used.
        8-2-122, C.R.S. DOCUMENT
                RETENTION


Employer shall keep a written or electronic copy of:
   The signed affirmation
 Copies of the employee’s identity documents produced to comply
    with I-9

Retain for each employee’s term of employment
   8-2-122, C.R.S. ENFORCEMENT

 When the Department has reason to believe that an
  employer has not complied, the Director shall request the
  employer to submit the documentation
 The Division conducts random audits; commenced in
  October 2007
 The Department accepts written complaints and shall have
  the discretion to determine which complaints, if any, are to
  be investigated
   8-2-122, C.R.S. ENFORCEMENT
 2,000+ total audits to-date

     1,700 randomly generated

 Approximately 20 commenced each week/1,000 per
   year anticipated
 Notified by letter

 Must submit requested written materials

 New Rules effective October 30, 2009
  8-2-122 RANGE OF RESPONSES
 No new employees post-1/1/07
 All documents in order
 Business closed
 Pending reply
 No affirmations
 Affirmations back-dated
 No copies of identity documents
 Identity documents do not reasonably appear to be genuine
 No affirmations or copies of identity documents
 No reply to multiple requests
 Reckless Disregard: no documentation, false or fraudulent
   documentation
       8-2-122, C.R.S. PENALTIES
   An employer who,
    (1) with reckless disregard, fails to submit the required
       documentation
    (2) with reckless disregard, submits false or fraudulent
       documentation

 May be subject to a fine
    • Up to $5,000 for the first offense
    • Up to $25,000 for the second and subsequent offenses
         8-2-122, C.R.S. PENALTIES

•    Division has levied significant fines against
     numerous employers

•    Fines due to:
    1. No response
    2. Reckless disregard; failure to provide information
    3. Repeated non-compliance
                        E-Verify
Free, voluntary except for some states, situations
Mandatory for: federal contractors and Colorado public
contracts for services
Internet-based
Newly hired only, no later than 3 days post-start date
I-9 information submitted through SSA and DHS databases
97% are shown to be work-eligible
TNC must contact SSA or DHS
Must use for all new hires (cannot be selective)
                       E-Verify
2010 Proposed Legislation: SB 10-033
• Repeals the current employment verification law
• Requires all private sector employers to use E-Verify
• CO Attorney General can fine for noncompliance
• Suspension of business license possible
Tancredo Proposed Initiative for November Election
• E-Verify requirement for all CO employers
• 76,047 signatures to get on ballot
U.S. Supreme Court and Preemption
E-Verify Statistics from USCIS: 1/23/10
 Federal
  Total E-Verify enrollment nationally: 183,000
    employer companies, 3.9 million queries

 Colorado
  Colorado E-Verify enrollment: 5,690 Colorado
    employer companies (5,200 in 2009; 3,800 in 2008;
    2,500 in 2007)
  Number of queries in Colorado: 82,000 so far for
    FY 2010 (federal FY of Oct 1-Sept 30)
              E-Verify Statistics
• Work authorization
  effective 7/9/2009
• 96.9% work authorized
  instantly or within 24
  hours
• .3% tentative non-
  confirmation ultimately
  resolved as work
  authorized
• 2.8% not authorized
                     Source: www.uscis.gov
       E-Verify Federal Directions
DHS Homeland Security Secretary, 2010:

“E-Verify is absolutely where we are going in terms of
incentivizing employers and making sure we are using a
legal work force”

Mandatory use for all employers in the U.S. is considered a
likely component of comprehensive immigration reform.
                 RESOURCES
Division Homepage: colorado.gov/cdle/labor
Wage and Hour: colorado.gov/cdle/wagelaw
Minimum Wage: colorado.gov/cdle/minimumwage
Youth Law: colorado.gov/cdle/youthlaw
Union Law: colorado.gov/cdle/laborrelations
Immigration: colorado.gov/cdle/employmenteligibility
Division e-mail: labor.stand@state.co.us
Division phone: 303-318-8441