A cursory reading of Colorado's wage and hour information page and statutes gives the strong feeling that this would be something they'd find not kosher. As I said, at $9 an hour, a very few dockings or finings or whatever you choose to call it would result in the person not being paid at least minimum wage for the hours worked. And this is not going to be legal. Whether they call it docking your salary or whether they call it a "fine" or a fee or whatever, it's not a good idea. The employee could go along with it, but the minute that hours worked times salary in gross pay falls below the minimum wage, (even if this pay cut is based on fines or monies assessed or penalities) the employer is hanging out there not paying the employees what they are supposed to. Something both stupid and risky on the part of the employer. I really think this employee should be looking for another job diligently. Unless the error rate is on beyond the realm of reasonable, this employer is simply trying to threaten the employees.
For example, I once worked at a business where we were told that if we accepted a counterfeit bill for payment, our paycheck would be docked for the amount of the counterfeit bill we had accepted. For example, a counterfeit $20, a $50, a $100, that amount would be taken from our pay. We got together and called the federal wage and hour division, and were told that this was definitely illegal. Of course, we were making minimum wage already. It never came up, so we never pushed it on through or filed a complaint, but it was strongly motivational for us to watch the bills we received, I must admit.
True, you can be fired for making mistakes, but "totally error free work " is a criteria that is very unrealistic. It probably would not be judged to be misconduct unless the employer has given repeated warnings and the employee has ignored them, continued to make a high level of errors. I have seen many employees who had been fired because they "ruined a $6000 piece of equipment" or cost the company money through their inefficiency in some way, and most of them, since the employer could not show DELIBERATE malicious intent, were approved for benefits.