Employers Are Not Always Right, Employees Have Rights

Most employees make two general assumptions about their workplace rights.  First, that employees do not have rights because we live in an at-will state.  Second, that their employer knows the law and is paying them correctly.  Because of these assumptions, many employees do not even know when or if their rights are being violated.

Employees typically seek legal counsel regarding unfair treatment in the workplace – usually a termination, demotion, hostile work environment, or some other adverse employment action.  As Colorado is an at-will employment state, an employer may fire an employee for good reason, bad reason, or no reason at all.  However, various state and federal laws create exceptions to the underlying employment at-will rule.  These laws are crucial to protecting workers’ rights and preventing employers from discriminating against employees because they are a member of a protected class (i.e., race, color, religion, sex, national origin, age, disability, sexual orientation, engaging in a protected activity).  During our conversations with employees, however, we have found that wage and hour law violations are much more pervasive than violations of the anti-discrimination laws.  Most employees do not even realize that they have a wage claim.

We like to believe that most employers do not intentionally violate wage and hour laws.  Rather, due to the complexity of this area of the law, violations are probably the result of an oversight or a misunderstanding of the current state of the law.  The primary laws that provide employees with wage and hour rights are the federal Fair Labor Standards Act and the Colorado Wage Claim Act.

Fair Labor Standards Act (FLSA)

The FLSA was passed in 1938 and focused on two areas: a maximum work week (40 hours) and a federal minimum wage.  The FLSA is complex and cannot be summarized simply, but in general the FLSA is where we look to enforce the minimum wage, overtime pay for non-exempt employees who work more than 40 hours in a week, equal pay, and proper classification of employees (such as exempt versus non-exempt and employee versus independent contractor).

A common FLSA violation is the classification of employees as exempt versus non-exempt.  Most people are familiar with these terms, but the analysis to determine whether an employee’s position is exempt or non-exempt can be complicated.  Each individual employee’s situation should be evaluated under the law to be sure that they are classified properly.

Another important protection of the FLSA is in the area of tipped employees.  Tipped employees do not have to be paid the regular minimum wage.  In Colorado, tipped employees must be paid at least $6.28 per hour, but tipped employees still must make at least minimum wage for every hour they work, which is $9.30 per hour.  If they do not make at least minimum wage with tips and hourly wages combined, the employer is responsible for making up the difference.  Additionally, if employers choose to pay employees the lower tipped minimum wage, then the employer must also comply with all other laws regulating tipped employees, or else the employer loses the tip credit and must pay the non-tipped minimum wage.  For example, if an employer pools tips and shares those tips with employees who customarily do not receive tips, then the employer must pay the regular minimum wage and reimburse all improperly distributed tips.

Colorado Wage Claim Act (CWCA)

The CWCA provides overlapping and additional protections to those afforded by the FLSA.  In particular, the CWCA regulates deductions from wages, final pay which can include vacation pay, commissions and bonuses, and when and how compensation must be paid.  The CWCA provides additional remedies if an employer has not paid an employee properly.  Like the FLSA, the CWCA contains many exceptions, and employees’ rights under the law should be evaluated on a case-by-case basis.

Wage and hour laws are part of what has made America thrive.  The more employees know their rights in the workplace, the better employees will be treated and compensated.  Better employment situations contribute to more stable families and communities.  We encourage the reader to support local businesses who pay their employees a living wage, as recognized by Thrive!, a living wage coalition that advocates for living wages in our community.

As an employee, you have rights.  If you have questions about the issues in this article or any other employment related matters, contact an employment law attorney to evaluate your situation.

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