C OLORADO D IVISION OF L ABOR 633 17 th Street, Suite 200 Denver, CO 80202 S TATE LABOR,...

COLORADO DIVISION OF LABOR

633 17th Street, Suite 200Denver, CO 80202

www.colorado.gov/cdle/labor

SSTATE LABOR, EMPLOYMENT, AND TATE LABOR, EMPLOYMENT, AND IMMIGRATION LAWS UPDATEIMMIGRATION LAWS UPDATE

February 25, 2010

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Division ofEmployment and Training

Division ofWorkers’ Compensation Division of Labor Division of

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COLORADO DEPARTMENT OF LABOR &

EMPLOYMENT

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 TrendsSource: Seyfarth Shaw 2010

Litigation Report1. 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)

DeductionsFinal Payment

Pay PeriodsPaydays

Timely Payment

Minimum Wage

Meal PeriodsRest Periods

Overtime

Colorado Wage Act

Applies to most employees in Colorado

Colorado Minimum Wage Order Number 26

Applies to four major industries:Retail and Service

Commercial Support ServiceFood and BeverageHealth and Medical

Colorado ConstitutionArticle XVIII, Section 15

Minimum Wage Applies to:Employees covered by federal law

Employees covered by WO 25

Colorado Wage Law Coverage

WagesTipped

Employees

COLORADO MINIMUM WAGECOLORADO 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.

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 WAGECOLORADO 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

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 WAGECOLORADO 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, 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 MINIMUM WAGE ORDER NUMBER 26: COVERAGENUMBER 26: COVERAGE

• Retail and Service

• Commercial Support Service

• Food and Beverage

• Health and Medical

• Retail and Service

• Commercial Support Service

• Food and Beverage

• Health and Medical

OVERTIME PAYOVERTIME 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)

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 PERIODSMEAL 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.

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 CREDITTIP 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

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 ACTWAGE 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

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

DEDUCTIONSDEDUCTIONS

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)

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 PAYFINAL 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: 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 PAYFINAL 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

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 TIMELY PAYMENT & PAY PERIODSPERIODS

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

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 CHANGESWAGE 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).

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 ENFORCEMENTDIVISION 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

• 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 ENFORCEMENTASSSORTED ENFORCEMENT

• Employee cannot waive rights to earned wages

• Division involvement

• Criminal prosecution

• Civil action

• Federal law / US DOL

• Employee cannot waive rights to earned wages

• Division involvement

• Criminal prosecution

• Civil action

• Federal law / US DOL

www.colorado.gov/cdle/employmenteligibility

COLORADO EMPLOYMENTCOLORADO EMPLOYMENTVERIFICATION LAWVERIFICATION LAW

HB 06S-1017 (8-2-122, C.R.S)HB 06S-1017 (8-2-122, C.R.S)

IMMIGRATION LAWSIMMIGRATION LAWS

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

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

You may recall the backdrop from 2007…

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.

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.

8-2-122, C.R.S. COVERAGE8-2-122, C.R.S. COVERAGE

EMPLOYMENT VERIFICATION EMPLOYMENT VERIFICATION LAWLAW

8-2-122, C.R.S.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)

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. AFFIRMATION8-2-122, C.R.S. AFFIRMATION

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

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

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

Available on Division website: colorado.gov/cdle/employmenteligibility

Any substantially Any substantially similar affirmation similar affirmation may be used.may be used.

AFFIRMATION SAMPLEAFFIRMATION SAMPLE

8-2-122, C.R.S. DOCUMENT 8-2-122, C.R.S. DOCUMENT RETENTIONRETENTION

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

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. 8-2-122, C.R.S. ENFORCEMENTENFORCEMENT

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

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. 8-2-122, C.R.S. ENFORCEMENTENFORCEMENT

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

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 8-2-122 RANGE OF RESPONSESRESPONSES

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

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

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. PENALTIES8-2-122, C.R.S. PENALTIES

8-2-122, C.R.S. PENALTIES8-2-122, C.R.S. PENALTIES

• Division has levied significant fines against numerous employers

• Fines due to:1. No response2. Reckless disregard; failure to provide

information3. Repeated non-compliance

E-VerifyE-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-VerifyE-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: E-Verify Statistics from USCIS: 1/23/101/23/10

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 DirectionsE-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.

RESOURCESRESOURCES

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