Before termination: 3 checks that help protect Colorado employers
A message from: Fennemore
A termination can be the right business decision and still be handled the wrong way.
Why it's important: A rushed process can turn a routine separation into a legal dispute, leaving employers with unexpected costs and employees with unanswered questions.
What you need to know: Colorado generally follows at-will employment, but employers must still meet their legal and contractual obligations when terminating employees.
- Employers generally must pay wages owed immediately upon an employer-initiated termination, with limited exceptions.
- Private employers that offer vacation or PTO must pay earned and unused balances at separation.
- Commissions, bonuses, and reimbursements may also affect the amount owed.
The strategy: Before scheduling a termination meeting, employers should review three key areas, according to Lindsay Rose in Fennemore's Labor & Employment practice group.
- 🔎 Confirm the facts supporting the decision, consider whether the employee recently engaged in legally protected activity, and review how similar situations have been handled.
- 📄 Examine employment agreements, handbooks, incentive plans, and other applicable documents. Executives, sales employees, and employee-owners may have additional contractual rights.
- 💰 Calculate outstanding wages, earned commissions, bonuses, reimbursements, and unused vacation or PTO. Confirm Colorado's payment deadlines, and whether proposed deductions are permitted.
Next steps: Prepare a clear explanation of the termination that aligns with the documented facts.
- Avoid vague phrases like "not a good fit" or "going in a different direction" which can create uncertainty.
Fennemore, one of the nation's fastest-growing business law firms with deep roots in the West, can help advise employers on employee discipline, wage and hour compliance, workplace policies, internal investigations, and employment agreements.
The takeaway: Even when a termination is justified, how an employer prepares for and communicates the decision can help avoid preventable mistakes, and handle difficult personnel decisions with greater clarity.