Steve,
Sorry it took me a while to get back - I'm working on too many things at once! I revised my code, but now it skips over the part where it's supposed to check if the password field is empty (see where it says "If IsNull(cboIdentity.Column(2)) Then") and instead jumps to giving you the message box "Password Invalid. Please Try Again." So I suspect the "IsNull" part isn't doing the trick - ? Any suggestions? 
Code:
Private Sub cmdLogin_Click()
'Check to see if data has been selected from the Employee Name combo box
If IsNull(Me.cboIdentity) Or Me.cboIdentity = "" Then
MsgBox "You must select an Employee Name.", vbOKOnly, "Required Data"
Me.cboIdentity.SetFocus
Exit Sub
End If
'Check to see if data has been entered into the Password text box
If IsNull(Me.txtPassword) Or Me.txtPassword = "" Then
MsgBox "You must enter a Password.", vbOKOnly, "Required Data"
Me.txtPassword.SetFocus
Exit Sub
End If
'Check to verify if the employee is still active in the database
If Me.cboIdentity.Column(3) = False Then
MsgBox "You are no longer active in this database. Please contact XYZ Employee.", _
vbCritical, "Restricted Access!"
Application.Quit
End If
'Check if password field is empty. If so, open the password create form
If IsNull(cboIdentity.Column(2)) Then
MsgBox "You need to create a password.", _
vbCritical, "Restricted Access!"
DoCmd.OpenForm "frmCreatePwd"
End If
'Check the value of the password in tblEmployeeRoster to see if this
'matches the value chosen in combo box
If Me.txtPassword = Me.cboIdentity.Column(2) Then
Emp_ID = Me.cboIdentity.Value
'Close the Log In form and open either the Editor or Main Menu
If Me.cboIdentity.Column(4) = True Then
DoCmd.OpenForm "frmMainMenu"
Else
DoCmd.OpenForm "frmEmployeeData"
End If
Me.Visible = False
Else
MsgBox "Password Invalid. Please Try Again", vbOKOnly, _
"Invalid Entry!"
Me.txtPassword.SetFocus
End If
'If User Enters incorrect password 3 times database will shutdown
intLogonAttempts = intLogonAttempts + 1
If intLogonAttempts > 2 Then
MsgBox "Apparently you do not have access to this database. Please contact XYZ Employee.", _
vbCritical, "Restricted Access!"
Application.Quit
End If
End Sub