The Colorado Division of Labor has announced that it will adopt new employment verification rules to implement the provisions of a Colorado law, which went into effect on January 1, 2007. The Colorado law (§ 8-2-122, C.R.S., HB 06S-1017) requires that all public and private employers who transact business in Colorado affirm, in written or electronic copy, that it has (1) examined the legal work status of the new employee; (2) retained file copies of the employee’s identification and work authorization documents; (3) not altered or falsified the documents presented by the employee; and (4) not knowingly hired an unauthorized foreign worker.  The employer must make the affirmation within 20 days after hiring the new employee.

Note that this requirement is separate from the 2006 Colorado law requiring state contractors to participate in E-Verify or the Colorado Department of Labor Program.

The proposed rules include all of the provisions listed above while also defining in detail various audit procedures and applicable fines for noncompliance. Here is a quick overview concerning these points. You can also visit the Colorado Department of Labor and Employment web site, which contains the entire rule along with a fact sheet, guide, and sample attestation forms. Also, take note that they are holding a public hearing on August 31st for interested parties.

Types of Audits

• Every employer may be subject to a compliance audit to ensure that employers are fulfilling their obligation. Compliance audits may originate from complaints, random selection, etc.
• Complaint-based audits will be conducted after the Division of Labor receives written complaints which are verified as legitimate. This could include examining the information, interviewing the complainant, interviewing other parties, etc.
• Random audits will be conducted based on a reasonable statistical selection procedure. Employers who have been subjected to a random audit shall not be subjected to a second or subsequent random audit within two years from the date the previous random audit was closed.

Audit Process

• Employers who have been selected for an audit shall be notified in writing. The employer shall be given at least ten business days to respond in writing with copies of the affirmation forms and copies of the identity and employment authorization documents for each new employee hired on and after January 1, 2007 and still in their employ as of the date of the audit letter sent.
• Employers may be granted time extensions at the discretion of the Division of Labor.
• Employers shall be notified whether their documentation submission has fully complied with the law and of any additional action required by the employer. Employers who are subject to a fine by the Division shall be notified in writing of the fine, and shall be notified of their legal and appeal rights.
• Employers who have been found to be in violation of the employment verification law in a previous audit may be re-audited.

Employer Fines

• An employer who, with reckless disregard, fails to submit the documentation required by the employment verification law, shall be subject to a fine of not more than $5,000 for the first offense and not more than $25,000 for the second and any subsequent offense
• An employer who, with reckless disregard, submits false or fraudulent documentation, shall be subject to a fine of not more than $5,000 for the first offense and not more than $25,000 for the second and any subsequent offense.
• The exact amount of a fine levied will depend upon the totality of the circumstances and a variety of factors, which may include, but not be limited to:
  (A) The size of the employer;
  (B) The employer’s good faith efforts to comply with the employment verification law;
  (C) The extent of the employer’s documentation deficiencies;
  (D) Results of previous audits of the employer and history of compliance;
  (E) The employer’s cooperation level and timeliness of responses; and
  (F) The seriousness of the violations observed.