The Colorado Supreme Court recently weighed in on how far back an employee can make claims for unpaid wages. Because of a lack of clarity in the law, the federal U.S. District Court for the District of Colorado requested that the Colorado Supreme Court answer a question regarding the applicable statute of limitations on a claim for unpaid overtime. The case, Hernandez v. Ray Domenico Farms, Inc., involved a claim for unpaid overtime wages over the course of a number of years of employment made by agricultural workers against their employer, an organic farm. The question before the court was: how many years back can an employee seek unpaid wages under the Colorado Wage Claim Act? The Colorado Supreme Court held that the two year statute of limitations (three for willful violations) for wage claims begins to run when the wages become due and payable.
The Colorado Wage Claim Act offers two causes of action for employees to seek unpaid wages, C.R.S. 8-4-109 and C.R.S. 8-4-103. Section 109 requires employers to pay all final wages to an employee separating from employment. Section 103 states that employers must pay wages, except those described in Section 109, on regular pay periods. Resorting to statutory construction, the Colorado Supreme Court concluded that the statute of limitations begins to run on the date the wages become due and payable. Under Section 103, wages become due and payable on regular paydays no more than ten days after each pay period. Under Section 109, wages become due at the time of separation. The Colorado Supreme Court provided that unpaid wages, such as those alleged in this case, may be brought under Section 103 or 109, but are subject to the statute of limitations of two or three years. Therefore, unpaid wages that predate a wage claim by two years (three for willful violations) are barred by the statute of limitations, which begins to run when the wages are due and payable.
Employers should ensure they properly calculate all wages due and owing to a terminated employee to avoid potential wage and hour exposure. Lewis Brisbois' team of Colorado employment lawyers are available to assist with wage and hour compliance and employment counseling questions.
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