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New bill makes wage theft a felony in Colorado

May 16, 2019
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Wage theft has long been a concern in Colorado. A new law passed in this latest legislative session builds on years of efforts to reduce wage theft by treating it like any other kind of theft and making it a felony — rather than the misdemeanor offense it is now. The bill applies only when the theft is greater than $2,000.

HB 19-1267 has its roots in the work of the Colorado Human Trafficking Task Force, whose members found that “labor trafficking” was by far the most common type of human trafficking, yet the least prosecuted. The bill also gained momentum because of the Worker Misclassification Task Force established by Gov. Hickenlooper last year. That group, which convenes representatives from organized labor, the construction industry and the Colorado Department of Labor and Employment (CDLE), has focused on how to identify and hold accountable companies that inappropriately classify workers as independent contractors rather than employees. Both task forces noted that most victims of labor trafficking are undocumented workers who speak little to no English. Hired by unscrupulous labor brokers who, in many instances, send them across national or state lines to perform low-skilled manual labor, these individuals are not only paid less than trained workers; in many cases, those wages may be withheld without their knowledge or consent. Shady companies like this also don’t provide required protections such as unemployment insurance and workers’ compensation coverage for their workers. As a result, they can undercut the prices of legitimate employers in industries, such as drywall and landscaping, that classify and pay their workers appropriately. Thus, their illegal actions hurt both their own workers and those of employers that play by the rules and lose out on business when they can’t match an artificially low bid.

The bill goes a step beyond legislation enacted five years ago, which strengthened CDLE’s ability to investigate wage theft claims but did not serve as much of a deterrent because of the misdemeanor penalties associated with the department’s enforcement. Importantly, HB 19-1267 was amended to ensure that general contractors are not held liable for the actions of subcontractors.

Passed unanimously out of both chambers of the General Assembly and currently awaiting the governor’s signature, the bill takes effect Jan. 1, 2020.

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