Colorado Labor Laws

Colorado Minimum Wage

 

Effective January 1, 2025, the minimum wage for Colorado employees is $14.81 per hour. This rate will be adjusted annually based on cost of living changes, as determined by the Consumer Price Index.

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History of Colorado Labor Laws

The history of minimum wage and workers’ rights in Colorado is marked by significant conflict.

In the early 1900s, the state witnessed several violent confrontations between companies and unions:

  • In April 1914, the Colorado National Guard and Colorado Fuel & Iron Company guards used machine guns on a tent encampment of striking coal workers, including women and children.
  • In 1927, the state militia again suppressed strikers at the Columbine Mine.

These events, along with years of violent clashes between unions and companies, led to the Labor Peace Act in 1943. This act protected workers’ rights to unionize and participate in union activities but also established stringent requirements for forming a union.

Over the years, Colorado has amended its laws to enhance union protections while allowing many workers to opt out of joining a union, thereby forfeiting union protections.

More recently, with the passage of House Bill 1210, Colorado has strengthened wage requirements for those not covered by union bargaining and permitted municipalities to set local minimum wages.

Municipality Minimum Wage Laws

In 2019, Colorado municipalities gained the authority to set their own local minimum wage rates. However, the state imposed a limit on the annual increase for local ordinances, capping it at $1.75 per hour or 15%, whichever is greater.

For example, Denver quickly established a new minimum wage. As of January 1, 2020, Denver’s minimum wage was set at $12.85, with planned increases to $14.77 in 2021 and $15.87 in 2022. Post-2022, the minimum wage rate will be adjusted annually based on the Consumer Price Index (CPI).

2025 Colorado Minimum Wage Exemptions

Colorado has several exemptions to its minimum wage requirements.

Tipped employees are not exempt from the minimum wage. However, if their tips plus the “tipped minimum wage direct pay rate” ($11.79 per hour) do not equal at least the standard minimum wage ($14.81 per hour in 2020), the employer must make up the difference to ensure the tipped employee earns at least the full minimum wage.

Unemancipated minors and employees with disabilities (certified by the Director of the Division of Labor Standards and Statistics) may be paid an alternate minimum wage of 15 percent less than the minimum wage per hour.

Certain employees are completely exempt from the minimum wage statute, including those in specific professions earning more than the required minimum salary or through other industry-specific restrictions.

Exempt job categories include administrative, executive, and supervisory roles, professionals, outside sales, domestic employees, companions, casual babysitters, property managers, interstate drivers, driver helpers, loaders, mechanics, taxi drivers, elected officials, volunteers, interns, and prisoners.

Colorado Posting Requirements

In addition to federally mandated labor law posters, such as those required by the Fair Labor Standards Act (FLSA), Colorado mandates several types of employment law information to be posted and easily accessible to employees.

These postings include information on state minimum wage, payday details, injury reporting notices, state anti-discrimination policies (including pregnancy accommodations), the Colorado Employment Security Act, and state workers’ compensation rules.

Required Posters:

  • Colorado Overtime and Minimum Pay Standards Order #36
  • Fair Employment
  • Warning to Report Injuries
  • Unemployment Insurance
  • Workers’ Compensation
  • Payday Notice

Tipped Wage in Colorado

As mentioned earlier, Colorado allows employers to take a tip credit in certain situations. Let’s delve into the details:

If a tip credit is used, employers can pay a direct wage of $14.81 per hour before tips. However, if the combination of tips and this lower direct wage does not meet or exceed the standard minimum wage, the employer must make up the difference.

The average hourly rate, combining direct wages and tips, must be calculated on a weekly basis.

Similar to most other states, Colorado prohibits employers from taking tips from employees except in strictly defined situations, such as qualified tip pools. Tip pooling is permitted but requires prior notice to the employee (as per federal law) and to the customer (with written notice, such as on a table card or receipt). If the tip pool includes non-tipped employees, the employer loses the ability to claim a tip credit.

Colorado defines a tipped employee as an employee regularly receiving over $1.64 per hour in tips.

Employers are not allowed to deduct credit card processing fees from employee tips. If an employer does so, they forfeit the ability to claim a tip credit.

In line with federal regulations, mandatory fees added to checks cannot be counted as tips and must be treated as regular wages if passed on to employees.

Overtime Wage in Colorado

 

Effective January 1, 2024, the threshold is $1,057.69 per week ($55,000 per year). The threshold will increase, the threshold will increase by $3,000 annually until it reaches $57,500 in 2026. From 2027 onwards, the threshold will be adjusted based on the Consumer Price Index (CPI).

Salary alone does not determine overtime exemption; the employee must also perform specific duties. The exemption applies to administrative employees, executives or supervisors, and professional employees. Outside salespersons and certain other employees may also be exempt from overtime without meeting the salary threshold.

Employers must track overtime daily. While the FLSA requires overtime after 40 hours in a workweek, Colorado mandates overtime after 12 hours in a single workday or 12 consecutive hours, regardless of the start or end day and excluding meal periods.

Overtime pay of one and one-half times the employee’s regular rate must be paid for any hours worked over 40 in a workweek, 12 in a single workday, or 12 consecutive hours. If an employee’s hours fall into more than one of these categories, they must be paid based on the calculation that results in higher pay.

Colorado defines the regular rate of pay as the total payments received in a workweek divided by the total hours worked, including shift differentials, bonuses, and commissions.

Child Labor Laws in Colorado

The Colorado Youth Employment Opportunity Act (CYEOA) applies to anyone under 18, except those who have graduated high school or received a GED.

Exceptions to the youth labor law include:

  • Certain entertainment industry jobs
  • Home chores
  • Work done for a parent (where the parent is not paid)
  • Paper carriers
  • Schoolwork or school-supervised activities

Unemancipated minors may be paid an alternative minimum wage of 15 percent less than the minimum wage per hour (as of January 1, 2020).

In addition to FLSA regulations, Colorado imposes further restrictions on permissible jobs for minors based on age. The state lists allowed jobs for those as young as nine years old and generally prohibits work for those under nine.

Allowed job categories are divided into:

  • Age nine and up
  • Age 12 and up
  • Age 14 and up
  • Age 16 and up

A hazardous job list excludes certain jobs for all minors. Minors, parents, or employers can request exemptions from the Division of Labor and Employment, evaluated on a case-by-case basis.

Work hours for minors are restricted to avoid conflicts with school responsibilities:

  • Minors aged 14 or 15 may request a school release permit to work during school hours.
  • No minor under 16 can work between 9:30 p.m. and 5:00 a.m. on a school night.
  • Those under 16 may work non-school hours between 7:00 a.m. and 7:00 p.m. during the school year, and until 9:00 p.m. during the summer.

For home-schooled students, school hours are defined by the school district in which the student resides.

Employer Recordkeeping Requirements in Colorado

Colorado mandates specific recordkeeping requirements related to minimum wage laws.

Employers must maintain employee records that include:

  • Name and address
  • Date of hire
  • Job title
  • Date of birth (for minors)
  • Daily hours worked
  • Tips received
  • Credits claimed for tipped employees
  • Pay rate
  • Gross pay
  • Net pay
  • Any withholdings
  • Pay period
  • Employer name and address

Itemized earning statements must be kept for at least three years after each payment, along with a copy of the current information provided to employees on each payday.

Colorado Labor Law Questions & Answers

Colorado follows the federal Fair Labor Standards Act (FLSA) regarding compulsory overtime. The FLSA permits employers to require employees to work mandatory overtime or face termination. However, overtime pay laws must be adhered to for both mandatory and voluntary overtime hours worked.

Additionally, certain jobs may have required downtime or limits on consecutive overtime hours under other legislation, such as the federal Occupational Safety and Health Act (OSH Act), which applies to specific jobs like long-haul truckers.

Minors in Colorado under age 16 are restricted to working no more than 3 hours on any school day, 8 hours on a non-school day, and no more than 18 hours during a week when school is in session.

No minor may work more than 40 hours per workweek or more than 8 hours in any 24-hour period, regardless of whether school is in session.

Yes, Colorado law requires that employees be given breaks after specific lengths of time worked. Generally, employees must receive a 10-minute paid break for every 4 hours (or significant fractions thereof) worked in a shift. Since these breaks are considered time worked, if an employer does not provide the required breaks, they must compensate the employee for the extra time.

For example:

  • Employees working over 2 and up to 6 hours are entitled to 1 break.
  • Those working over 6 and up to 10 hours should receive 2 breaks.
  • Employees working over 10 and up to 14 hours are entitled to 3 breaks.
  • This pattern continues, with additional breaks required for longer shifts.

Exceptions to the 10-minute break rule allow for splitting the breaks into two five-minute breaks if agreed upon by both employer and employee. There are also exceptions for employees covered by bargaining agreements and certain Medicare-covered in-home care providers, as long as the breaks provided exceed Colorado law.

Additionally, meal breaks are required if an employee works at least five consecutive hours. These meal breaks must be at least 30 minutes long and are unpaid.

Yes, tip pooling is legal in Colorado. In addition to federal FLSA rules, which require employees to be notified in advance about tip pools and their structure, Colorado also mandates that patrons be informed in writing (e.g., on a receipt or table card).

Unlike many states, Colorado allows tip pools to include employees who are not normally tipped, such as managers or dishwashers. However, if non-tipped employees are included in the tip pool, the employer loses the ability to claim a tip credit and must pay the standard minimum wage regardless of tips received.

Yes, Colorado requires immediate payment of due wages when an employee leaves a company. There are a few exceptions:

  • If the accounting department is not working at the time of termination, the company has until six hours into the next scheduled workday to deliver the final pay.
  • If the accounting department is offsite, the employer has 24 hours after the start of the next scheduled workday to deliver the payment to the worksite, local office, or the employee’s last known address. A postmark within the allowed time is considered meeting the deadline.
  • If the former employee has not returned company property or funds, allowing for a deduction from final pay, the company has 10 days to complete the audit and accounting process.

While marijuana use is legal under Colorado law, it remains illegal under federal law. This creates a legal grey area for employees in Colorado.

Although Colorado has a statute protecting workers from being fired for “legal activities” outside of work, this does not guarantee protection for marijuana use. A 2010 court case resulted in a state supreme court ruling that lawful activities must be legal both at the state and federal levels to be protected.

As of January 2020, some Colorado lawmakers have proposed a bill to safeguard state-legal marijuana users, but its passage is uncertain.

Additionally, there are concerns about impairment from off-duty marijuana use, especially for employees operating heavy equipment, which can lead to conflicts between federal OSHA requirements and state laws.

Colorado Labor Law Posters

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