Colorado Deductions from Pay laws & HR compliance analysis

Colorado Deductions from Pay: What you need to know

Under Colorado law, an employer may deduct from an employee's wages only charges required by law, permitted by law, or authorized by the employee (CO Rev. Stat. Sec. 8-4-101et seq.).
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Required by law. Deductions required by law include taxes, Federal Insurance Contributions Act (FICA) requirements, garnishments, or any other deductions ordered by the courts (CO Rev. Stat. Sec. 8-4-105). Employers may collect up to $5 per month to cover their administrative costs in enforcing court-ordered support payments through payroll deductions (CO Rev. Stat. Sec. 14-14-111.5).
Permitted by law. Colorado law permits deductions for:
• Penalties for violations of previously established, written company policies, as long as the policies are consistent with laws concerning payment of wages for all hours worked
• Alleged theft by the employee, as long as the employer has filed a theft report with the proper authorities and provided the Labor Standards Unit with the complaint number and name of the investigating officer
• Loans, advances, goods, services, equipment, or property provided by the employer to the employee under a lawful written agreement between the employer and the employee
Authorized by employee. Deductions are allowed if authorized by the employee, as long as the authorization is revocable and the deduction does not reduce the employee's pay below the applicable minimum wage rate for all hours worked in a workweek.
Permitted deductions include those for payment of:
• Union dues
• Hospital and medical expenses
• Rent, board, and sustenance provided in connection with employment
• Stock purchases
• Savings
• Insurance
• Charitable contributions
• Voluntary pension plans
• Other similar purposes
Each pay ...

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