Monthly Archives: December 2022

December 5, 2022

Can An Employee Be Required to Sign a Noncompete Agreement Before They Receive Their Final Paycheck?

Juan Obregon

By Juan Obregon

Question: Can we require an employee to sign a noncompete agreement before they receive their final paycheck?

Answer: In short: no, employers cannot withhold an employee’s final paycheck until they sign a non-compete. Doing so likely violates Colorado’s restrictive covenant statute (Colo. Rev. Stat. 8-2-113) and the Colorado Wage Claim Act (Colo. Rev. Stat. 8-4-101, et seq).

Under Section 8-4-109 of the Colorado Wage Claim Act, when the employer terminates an employee, “wages or compensation for labor or service earned, vested, determinable, and unpaid at the time of such discharge is due and payable immediately.” When an employee quits “the wages or compensation shall become due and payable upon the next regular payday.” Either way, if the employee performed the labor to earn those wages, they are due and failing to pay it timely could subject the employer to significant penalties. Read more >>

December 1, 2022

New Guidance on Bonuses and Commissions May Cause Headaches for Employers

Juan Obregon

By Juan Obregon

Organizations commonly require employees to be employed on the date a commission or bonus is paid to receive the commission or bonus. The Colorado Department of Labor and Employment (CDLE), which interprets and administers Colorado’s Wage Act, recently indicated that practice is not permissible, which means employers will need to revisit their bonus agreements and commission plans sooner rather than later. The failure to heed the CDLE’s guidance may result in costly wage claims. 

Overview

The Colorado Wage Act requires employers to pay employees the wages and other compensation they earn. Non-discretionary bonuses and commissions are considered wages. Under the Colorado Wage Act, an employee is not entitled to wages or compensation unless such amounts are “earned, vested, and determinable.” The question, of course, is: when are bonuses or commissions earned, vested, and determinable? Read more >>