2021 changes to date and more to come in employment law

This year, Colorado has already seen significant changes to employment law, and it will continue to see additional developments as 2021 continues. 

At the beginning of the year, Colorado’s Equal Pay for Equal Work Act and its Healthy Families and Workplaces Act (HFWA) went into effect.

Both have significant implications for job postings, salaries, and benefits mandated to be offered by employers, and both statutes follow a trend in Colorado for providing substantial worker protections.  

The remainder of 2021 promises continued and new developments of protections for workers. These include continued required paid sick leave for COVID-related illness, the addition of gender expression to Colorado’s anti-discrimination statutes, and the effect of a recent Colorado Supreme Court decision on “use it or lose it” vacation policies.   

Healthy Families and Workplaces Act

Employers need to monitor the need to pay sick leave for COVID-related illness under HFWA. HFWA still requires COVID-related paid sick leave while the federal Public Health Emergency remains in effect even though Governor Polis lifted the public health emergency in July 2021. Small employers of 15 or fewer need to be reviewing and preparing their policies for compliance. Starting on January 1, 2022, HFWA applies to all employers regardless of size. 

Changes to Anti-Discrimination Statutes 

On May 20, 2021, Governor Polis signed House Bill 21-1108, amending Colorado’s Anti-Discrimination Act (CADA) to create “gender expression” and “gender identity” protected categories. It also broadens the definition of “sexual orientation.” The new statutory language for these three categories provides: 

• Gender expression means an individual’s way of reflecting and expressing the individual’s gender to the outside world, typically demonstrated through appearance, dress, and behavior.  
• Gender identity means an individual’s innate sense of the individual’s gender, which may or may not correspond with the individual’s sex assigned at birth.  
• Sexual orientation means an individual’s identity, or another individual’s perception thereof, in relation to the gender or genders to which the individual is sexually or emotionally attracted and the behavior or social affiliation that may result from the attraction.  

Several other sections of the statute are also amended to prohibit discrimination against any person for gender identity and gender expression, in addition to the previously protected categories such as race, sex, gender, or religion. These statutes add gender expression and gender identity to protected categories in housing discrimination and employment practices. The new version of CADA becomes effective on September 1, 2021, and is an important development for Colorado employers.  

Although sexual orientation was already protected under CADA, the broadening of its definition and the addition of gender identity and gender expression clarify that all such categories are protected against discrimination in employment. Colorado’s protections are therefore broader than those under the federal Title VII. Employers should update their policies to reflect this change and consider training or similar measures to ensure compliance.   

“Use It or Lose It” Vacation Policies 

On June 14, 2021, the Colorado Supreme Court issued its decision in Nieto v. Clark’s Market, Inc., addressing vacation pay under Colorado’s Wage Claim Act. Upon termination, the Wage Claim Act provides that all wages or compensation that are “earned, vested, determinable, and unpaid at the time of such discharge is due and payable immediately.” The definition of wages or compensation includes vacation pay and further provides, “If an employer provides paid vacation for an employee, the employer shall pay upon separation from employment all vacation pay earned and determinable in accordance with the terms of any agreement between the employer and employee.”  

In Nieto, the employer’s vacation policy provided that, in the event of an employee’s voluntary separation, any unused vacation time would be paid to the employee. However, in the event of termination, the employee would forfeit any right to vacation. The plaintiff, an employee for over 8 ½ years, was terminated and claimed approximately 136 hours (over $2,200) in vacation pay. The Court held, “Although the [Wage Claim Act] does not create an automatic right to vacation pay, when an employer chooses to provide such pay, it cannot be forfeited once earned by the employee.”  

As with gender expression, this has important consequences for Colorado employers. If a policy states that vacation pay is forfeited, it should be revised promptly. Additionally, the Wage Claim Act provides penalties when an employer withholds any wages (including vacation pay) that are “earned, vested, and determinable.” 

The Nieto holding means that if an employer withholds accrued vacation pay, it risks paying both the unpaid vacation and statutory penalties in the event of a dispute. Therefore, employers should carefully review any claim for vacation pay in light of Nieto to ensure full compliance with the Wage Claim Act.  

These recent developments make it worthwhile for Colorado employers to revisit their current anti-discrimination and vacation policies. With regard to anti-discrimination, employers should evaluate their existing policies to ensure compliance with CADA’s revised protections.

Employers may also want to consider whether harassment or awareness training on the new protections is worthwhile. As to vacation policies, employers should first confirm their policies do not contain a “use it or lost it” provision.

Employers also have a choice under Nieto to consider how broad they wish to make a vacation policy, and should consider their options under Nieto’s recent holding.     

 Tanya A. Sevy is an attorney in Denver-based law firm Moye White’s Employment Group. She can be reached [email protected].