AUTHOR- Kim Slowey
PUBLISHED – April 8, 2019
Dive Brief:
- The Colorado General Assembly’s House Judiciary Committee approved a proposed wage theft bill that would make intentional underpayment of certain wages a criminal offense.
- In Colorado it is a misdemeanor to willfully short employees on their paychecks, but the new measure would make it a felony theft to intentionally underpay them by $2,000 or more. The bill includes migratory and foreign workers under the definition of employee.
- One of the bill’s stated intentions is to provide an additional vehicle for state law enforcement to fight labor trafficking by recognizing labor as a thing of value that is subject to theft. According to the General Assembly, labor trafficking each year costs Colorado workers hundreds of millions of dollars and the loss of tens of millions of dollars to the state.
Dive Insight: According to the Colorado Fiscal Institute, more than 500,0000 workers in the state – many of them in the construction industry – lose $750 million a year because of wage theft. The institute’s analysis shows that the most common methods employers use to short employees on their pay are:
- Nonpayment, which includes late payments and not paying employees what they’ve earned.
- Underpayment.
- Misclassification of employees as independent contractors in order to avoid having to pay benefits.
- Unauthorized payroll deductions for expenses like transportation, materials and tools.
There has been a push by some states and cities to address wage theft and misclassification of workers as independent contractors. In California, lawmakers are considering codifying a state Supreme Court ruling that sets the parameters of which workers qualify as independent contractors. The “ABC” test asks whether the person claiming to be an independent contractor is free from the control and direction of the employer; performs work that the hiring employer doesn’t typically do; and engages in the work as part of a business.