New Colorado Law Deems Failure to Pay Wages a Theft

Colorado Gov. Jared Polis (D) May 16 signed a law reclassifying failure to pay wages as theft.

Under the measure (H.B. 1267), refusing to pay a wage claim, falsely denying a wage claim with the intent to not pay, or underpaying the claim to harass or defraud the person owed the wage is classified as a theft that could be treated as a petty offense, misdemeanor, or felony when the amount of unpaid wages exceeds $2,000. It will take effect Jan. 1, 2020.

The law also makes paying less than the minimum wage an unclassified misdemeanor.

The current fine is $300 for failure to pay wages and $500 for failure to pay the minimum wage, according to a fiscal note for the bill prepared by the Colorado Legislative Council. The fine for theft ranges from $50 to $1 million, depending on the circumstance of the crime and the value stolen, the council said.

District attorneys urged the legislature to beef up the penalties for failure to pay wages, Rep. Meg Froelich (D), one of the primary House sponsors of the bill, told Bloomberg Law. “They asked us to help strengthen the tools available to them,” she said. “Since it was a misdemeanor it’s not worth the prosecutorial time and energy to go after it.”

Additionally, she said, “decent contractors suffer terribly because they are trying to do right by their workers, with good pay and benefits, and they get underbid by people who are budgeting not paying their employees.”