This article addresses specific compliance issues around terminating employees in Colorado. If you'd like to know how to terminate an employee within Justworks, please visit Terminating Employees.
Colorado law requires that employees be paid their owed wages at the time of termination if termination is involuntary. If an employee resigns, then the final pay can be paid out with regular payroll via direct deposit or otherwise.
This means that if an employer chooses to let an employee go, the employer is responsible for paying the employee all due wages at the time of termination via paper check. This manual payment needs to be promptly reported to Justworks so that Justworks can report and remit payroll taxes as required. It is permissible for the employer to mail the final check to the employee’s last-known mailing address, as long as it is postmarked as of the date of termination . Issuance of final pay via direct deposit is allowed only if scheduled in advance, so that the employee receives the funds on the same day as the termination. Given that the timing of the final wage deposit may occur prior to the employee receiving notice of termination, this approach may not be advisable. Employers are also required to pay out any accrued, unused vacation to a terminating employee. All accrued, unused vacation must be paid as wages and at the employee’s final rate of pay.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.