As noted in a previous FrankCrum news alert, the Colorado Supreme Court issued its long-awaited decision that an employer must pay an employee’s earned but unused vacation pay upon separation of employment. This decision brought clarity to how vacation policies are addressed under the Colorado Wage Claim Act. Colorado employers do not have to provide vacation pay but if they choose to do so it cannot be forfeited once earned and must be paid out when the employee leaves the company.
Employers should review their policies and make any needed changes so that vacation pay is not forfeited either at year end (“use it or lose it”) or at termination of employment.
Last year, Colorado enacted the Healthy Families and Workplaces Act requiring employers to provide sick leave. Under that law, sick leave does not need to be paid out at termination, and nothing in the Supreme Court’s decision changes that.
Reach out to your FrankAdvice HR Consultant as needed.