Colorado Employers: New End-of-Employment Obligations

2022 is proving to be a major year for employment law changes. Along with updates to the legality of arbitration agreements,¹ several other bills regulating the employment relationship have also been passed. Here, we focus on Senate Bill 22-234, which is a new take on Colorado’s unemployment compensation scheme and imposes additional obligations on Colorado employers.²

Unemployment compensation is a system of benefits available to workers, regardless of immigration status, who have passed certain eligibility requirements and are terminated “through no fault of their own.” Individuals eligible for unemployment benefits will no longer be required to wait at least a week after termination to become eligible for unemployment compensation. Several other changes were made to the system, including some updates to dependent allowances.

In addition, under the new scheme, employers will be required to provide additional information to employees upon separation. This must include:

1. The employer’s name and address;
2. The employee’s name and address;
3. The employee’s identification number or the last four digits of the employee’s Social Security Number;
4. The employee’s start date and date of last day worked;
5. The employee’s year-to-date earnings and wages, including any tips earned; and
6. The reason the employee separated from the employer.

The information must be transmitted in a written format at the time of separation, no matter the reason for that separation. This means that the employer may provide the notice either in hard copy or digital format. However, there is no grace period mentioned in the new law; thus, employers should provide this information immediately upon termination/separation—likely, on the last day the employee is scheduled to work. In order to ensure compliance, Colorado employers should carefully maintain records of all employee earnings, including bonuses, tips, or other wages, because such an accounting would need to be provided to the employee upon separation. The law does not mention any possibility of an addendum, but if tips or wages have not yet been calculated at the time of separation, it would be best practices to include a statement in the notice noting that tips or other earned income are still being calculated and that an addendum will be sent no later than a week following the employee’s receipt of the notice.

Finally, employers are required to post explicit information about Colorado employment rights in all work locations. This is in addition to other notices that employers are required to post.

Being prepared to comply with Colorado’s new employment laws is essential to avoiding major fines or penalties. Most of this information can be easily generated by payroll. And it’s generally good practice to give an employee a truthful reason for separation.

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¹ Check out our article on this issue here!

² Note that an employer is considered a Colorado employer if they have at least one employee who is a resident of Colorado, even if that employee is working remotely.

Featured Image by Rebecca Sidebotham