It was an active year for Colorado employment-related legislation.  Among the new laws passed this year, Senate Bill 22-234 expanded the information that employers must provide to employees upon separation from employment.  Specifically, employers must now provide a written notice (hard copy or electronic) with the following information:

• • The employer’s name and address, and
  • The employee’s
    • name,
    • address,
    • employee ID or last four of the employee’s SSN,
    • first and last dates worked,
    • year-to-date earnings,
    • wages for the last week worked, and
    • the reason for the separation.

To comply with this obligation, the Colorado Department of Labor and Employment (CDLE) recently published an approved form which is accessible here: https://cdle.colorado.gov/sites/cdle/files/documents/Employer-Separation-Form-22-234-fillable.pdf

Although this might seem like a simple form, documenting the reason for separation can be complicated and have significant consequences.  If a terminated employee later sues for wrongful discharge, discrimination, or retaliation, the company typically must justify its decision with legitimate, non-discriminatory and non-retaliatory reasons for the discharge.  But if those reasons differ or change over time, that can hurt the company’s defense, as courts and juries sometimes construe changing explanations as a “pretext”, or cover-up, for unlawful motivations.  For example, if a company lists attendance as the reason for separation, even though the employee was fired for attendance, theft, and poor performance, the company will have a difficult time relying on those additional – and very justifiable – reasons for termination without weakening its case.

To avoid these issues, we suggest a few practical tips.  First, make sure to train those who are filling out the form to ensure they understand the significance of the information contained within it.  Second, be concise, accurate, and complete, when providing reasons for separation.  The CDLE form requests that responses be limited to one sentence.  As a result, rather than create a long narrative explaining all of the employee’s issues, the company could say, “the employee was discharged due to violations of company policies” as the reason(s) for separation.  But be careful: if you rely on company policies, and there is no policy on point, that could pose a problem down the road as well.  Consider developing a list of categories that someone can use for the form, such as: violation of company policies; unprofessional behavior or conduct; theft or dishonesty; attendance and punctuality issues; job elimination; poor performance; etc.

By taking a little time to prepare for this new requirement, companies may avoid missteps that might turn into more significant issues down the road.