Colorado Wage Claims Limited to Two-year’s Back Pay (or up to three years for willful violations)

    The Colorado Supreme Court has ruled that the Colorado Wage Act’s (the “Wage Act”) two- and three-year statutes of limitations do apply to claims brought by employees to recover unpaid wages and compensation upon termination.[1] In Hernandez v. Ray Domenico Farms, Inc., several hourly agricultural workers sued their former employer for allegedly unpaid wages going back over the entire period of their employment (which in some cases spanned more than 20 years). The Supreme Court held as follows:[2]  

    1.     Terminated employees CAN sue to recover any wages and compensation owed at the time of termination—not just wages and compensation that become due and payable because of a separation (such as wages accrued but unpaid hourly wages and vacation time).

    2.    However, the statute of limitations for allegedly past-due wages begins to run on the date the wages first became due and payable—not on the date of separation.

    As a result, terminated employees in Hernandez could not sue to recover all wages due over the course of their employment, but instead were limited to claims for the two years preceding termination (or three years in the case of willful violations of the Wage Act).[3]

    The Colorado Supreme Court’s decision clarifies that terminated employees are subject to the Wage Act’s two- and three-year limitations periods, and gives assurance that employers need not litigate long-stale wage claims for which evidence and witnesses are no longer available. Employers with questions about what wages must be paid upon termination are encouraged to consult their employment attorney.

[1] Hernandez v. Ray Domenico Farms, Inc., Colo. Supreme Court Case No. 17SA77, 2018 WL 1146468 (Colo. 2018).

[2] The Colorado Supreme Court considered the Hernandez case as a certified question of law from the United States District Court for the District of Colorado. See Hernandez, 2018 WL 1146468.

[3] See C.R.S. § 8-4-122 (setting two-year statute of limitations generally, and three-year statute of limitations in the case of willful violations of the Wage Act).