Colorado Labor Law Guide

Colorado is a state located in the western part of the United States. It has a diverse and dynamic economy, driven by various sectors, including technology, energy, aerospace, agriculture, and tourism. Colorado has a growing technology sector in cities Denver and Boulder that have vibrant startup ecosystems. Colorado has business-friendly policies, and the state government actively supports economic development.
Colorado State Labor Laws

Minimum Wage

$13.65

Overtime Wage

$1.5x Regular Wages

Meal Breaks

Not mandated

Rest Breaks

Paid and scheduled every 4 hours

Minimum Wage Mandates

Colorado state minimum wage rate is $13.65 per hour in 2023. Colorado tipped minimum wage is $10.63 per hour.

On January 1, 2024, the minimum wage will increase to $14.42, line with the cost of living (COLA).

The minimum wage in the city of Denver will be $18.29 per hour in January 2024.

In the City of Edgewater, the minimum wage will be $15.02 per hour on January 1, 2024.

Overtime Rules

Colorado has its own overtime rules.

Overtime Pay Rate: In Colorado, non-exempt employees are generally entitled to overtime pay at a rate of one and a half times their regular rate of pay for all hours worked beyond 40 hours in a workweek.

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Alternative Workweek Agreements: Colorado law allows for alternative workweek agreements. Under such agreements, non-exempt employees may work more than eight hours in a workday without receiving overtime pay, as long as the total hours in a workweek do not exceed 40, and certain conditions are met.

Exemptions: Certain employees may be exempt from overtime requirements based on their job duties and salary. Common exemptions include executive, administrative, professional, and certain computer employees.

Meal and Rest Breaks

Colorado has its own rules regarding meal and rest breaks for employees.

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  • Colorado law does not explicitly require employers to provide meal breaks to employees. However, if an employer provides a meal break of 30 minutes or more during which the employee is completely relieved of duties, the break may be unpaid.
  • Rest Breaks: Colorado requires that employers provide short, paid rest breaks to employees. For every four hours of work, employees are entitled to a ten-minute paid rest break. Rest breaks are generally considered time worked and must be compensated.
  • Timing of Rest Breaks: Rest breaks should, whenever practical, be scheduled in the middle of each four-hour work period. If the nature of the work prevents the scheduling of regular rest breaks, employers must provide equivalent time off or compensate employees accordingly.
  • Employers are obligated to make good faith efforts to authorize and permit rest breaks for employees. Employees should not be required to work during rest breaks.
  • Businesses with young employees also have to comply with the federal child labor laws which require breaks for young workers.
Paid Leaves and time off rules in the state of Colorado

Colorado has specific rules related to paid leave and time off, particularly in reference to the Colorado Healthy Families and Workplaces Act (HFWA).

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  • Paid Sick Leave: The HFWA requires employers to provide paid sick leave to employees. Employers with 16 or more employees must provide up to 48 hours of paid sick leave per year, and employers with 15 or fewer employees must provide up to 48 hours of unpaid sick leave.
  • Accrual and Usage: Sick leave accrues at a rate of one hour for every 30 hours worked, and employees can begin using accrued sick leave starting on the 90th calendar day of employment. Employees may use sick leave for various reasons, including their own illness, caring for a family member, or in cases of domestic violence.
  • Carryover: Employees have the right to carry over up to 48 hours of unused sick leave to the following year. However, employers may limit the use of sick leave to 48 hours per year.
  • Notice and Documentation: Employers may require reasonable notice for the use of sick leave, but they cannot require documentation of the illness or condition unless the employee is absent for three or more consecutive days.
  • Colorado law provides employees with the right to take time off for jury duty, and employers are prohibited from retaliating against employees who are called for jury duty. Additionally, Colorado law allows employees to take up to two hours of paid leave to vote in any election.
  • Federal Family and Medical Leave Act (FMLA): This federal law gives eligible employees with up to 12 weeks of unpaid, job-protected leave per year for certain family or medical reasons. FMLA provides job protection, meaning that eligible employees who take FMLA leave have the right to return to their position or an equivalent one with the same pay and benefits.
Exempt vs. Non-Exempt Classification

The classification of employees as exempt or non-exempt in the state of Pennsylvania follows the federal Fair Labor Standards Act (FLSA).

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Exempt Employees:

  • Salary Basis Test: Exempt employees are typically paid on a salary basis, meaning they receive a fixed salary that is not subject to reduction based on the quality or quantity of work performed.
  • Salary Level Test: Exempt employees must earn a minimum salary to qualify for exemption. The minimum salary for exemption is $684 per week.
  • Duties Test: Exempt employees must perform specific job duties that fall into one of the FLSA’s exempt categories, such as executive, administrative, professional, or certain computer-related duties.

Non-Exempt Employees:

  • Hourly Pay: Non-exempt employees are typically paid on an hourly basis and are entitled to overtime pay for hours worked beyond 40 hours in a workweek.
  • Overtime Pay: Overtime pay for non-exempt employees is generally calculated at 1.5 times their regular rate of pay for each hour worked beyond 40 hours in a workweek.
Equal Pay Act

The Equal Pay Act (EPA) is a federal law that prohibits wage discrimination on the basis of sex. The EPA ensures that employees performing substantially equal work receive equal pay, regardless of their gender. The state of Colorado does not have its own equal pay act.

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  • Equitable Work: Although a federal law, it applies to employers in all states, including the state of Colorado. Under the EPA, employees are entitled to equal pay for equal work, which includes equal wages for jobs that require equal skill, effort, responsibility, and are performed under similar working conditions.
  • Employers may only pay different wages for substantially similar work if the differential is based on a bona fide factor other than gender. Bona fide factors may include education, training, experience, or other job-related factors.
  • In addition to the EPA, employers must also adhere to Title VII of the Civil Rights Act of 1964 that prohibits discrimination based on race, color, religion, and national origin.
Rules for hiring and firing employees in the state of Colorado

Hiring and firing employees in Colorado are governed by a combination of federal and state laws.

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  • At-Will Employment: Colorado is an at-will employment state, meaning that, absent a contract stating otherwise, employment relationships can be terminated by either the employer or the employee at any time, with or without cause, and with or without notice.
  • Anti-Discrimination Laws: Employers in Colorado must comply with federal anti-discrimination laws, such as Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, religion, sex, or national origin.
  • Equal Employment Opportunity (EEO): Employers should provide equal employment opportunities to all individuals regardless of race, color, religion, sex, national origin, disability, or age.
  • Background Checks: Employers may conduct background checks on applicants, but they must comply with the Fair Credit Reporting Act (FCRA) and state laws regarding the use of criminal records in employment decisions.
  • Work Eligibility Verification: Employers are required to verify the work eligibility of employees through the Form I-9 process in compliance with federal immigration laws.
  • Final Paychecks: Employers are generally required to provide employees with their final paychecks promptly upon termination.
  • Unemployment Compensation: If an employee is terminated, they may be eligible for unemployment compensation. Employers are required to provide accurate information to the Colorado Department of Labor and Employment if a former employee files for unemployment benefits.
  • WARN Act: The federal Worker Adjustment and Retraining Notification (WARN) Act may apply to employers with 100 or more employees, requiring them to provide advance notice of plant closings or mass layoffs.

It is important for employers to remain well-informed about changes in employment laws and to seek guidance from legal professionals to ensure compliance with the latest regulations. It’s advisable to establish clear and meticulously documented employment policies and procedures to aid employers in complying with the labor laws.

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