Colorado Labor Laws

Updated: 03/06/2020

Colorado Minimum Wage

Starting January 1, 2020, the state minimum wage in Colorado is $12 per hour. Due to Amendment 70, the minimum wage began increasing in 2017 and has been steadily rising on Jan. 1 of each year since then, with the goal of $12 per hour. Effective in 2021, the rate will be adjusted annually for cost of living increases, using the Consumer Price Index.

USA map with Colorado superimposed

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History of Colorado Labor Laws

The history of minimum wage and workers' rights in Colorado is a bloody one.

In the early 1900s, the state was home to several violent clashes 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 put down strikers at the Columbine Mine.

This (and several more years of violent union and company behavior), led to the Labor Peace Act in 1943, which protected the right of workers to unionize and participate in union activities, but also set a high bar for forming a union.

Amended through the years, Colorado has increased union protections but also allowed many workers to decline to join a union (though by not joining, they opt out of labor union protections).

With the passage of House Bill 1210 more recently, Colorado strengthened its wage requirements for those not covered by union bargaining and allowed municipalities to set local minimum wages.

Municipality Minimum Wage Laws

Municipalities in Colorado gained the ability to set local minimum wage rates in 2019.

However, the state did limit the amount of increase per year for local ordinances. No city can raise the minimum wage by more than $1.75 per hour (or 15%, whichever is greater) during any year.

For instance, Denver set a new minimum wage for the city within months. Effective January 1, 2020, Denver's minimum wage is $12.85, with scheduled increases each January to $14.77 in 2021 and $15.87 in 2022. After 2022, the minimum wage rate will be adjusted based on the Consumer Price Index (CPI).

Colorado Minimum Wage Exemptions

Colorado has a few exemptions to its minimum wage rate requirements.

Tipped employees are not exempt from the minimum wage. However, if their tips plus "tipped minimum wage direct pay rate" ($8.98 per hour) do not equal at least the standard minimum wage ($12 per hour in 2020), the employer must make up the difference so that the tipped employee earns at least full minimum wage.

Both minors who are unemancipated and employees with disabilities (certified by the Director of the Division of Labor Standards and Statistics) may be paid an alternate minimum wage of $10.20 per hour.

Employees who are completely exempt from the minimum wage statute include those in certain professions making more than required minimum salary or through other restrictions that vary based on industry and profession.

Exempted job categories include administrative, executive and supervisor, 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 required labor law posters, such as those deriving from the Fair Labor Standards Act (FLSA), Colorado requires several types of employment law information to be posted and easily accessible to employees.

These postings include postings about state minimum wage, payday information, injury reporting notices, state anti-discrimination information (including pregnancy accommodations), the Colorado Employment Security Act information, 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 we said above, Colorado allows employers to take a tip credit in some situations, but let's get into it a bit more comprehensively.

If tip credit is used, employers may pay a direct pay rate of $8.98 per hour before tips. However, if tips plus the lower direct pay wage do not equal at least the standard minimum wage, the employer must make up the difference.

The direct wage plus tips hourly average must be computed on a weekly basis.

Like employers in most other states, employers in Colorado cannot take tips from employees except in very strictly defined situations (such as qualified tip pools). Tip pooling is allowed but only with notice to the employee ahead of time (per federal law) and to the customer (customer notice must be in writing such as on a table card or receipt). Should the tip pool include non-tipped employees, the employer forfeits the ability to claim a tip credit.

Colorado follows the FLSA in defining a tipped employee as someone who normally receives at least $30 a month in tips.

Employers may not deduct credit card processing fees from employee tips. An employer who deducts credit card fees from tips forfeits the ability to claim a tip credit.

Following federal rules, mandatory fees added to checks may not be counted as tips and must be counted as regular wages if passed on to employees.

Overtime Wage in Colorado

On March 16, 2020, a new ordinance took effect and brought significant changes involving overtime as well as minimum wage in the state. While the Colorado Minimum Wage Order #35 covered only certain industries -- namely, retail and service; commercial support service; food and beverage; and health and medical -- the ordinance that replaced it applies to all industries.

The new ordinance, the Colorado Overtime and Minimum Pay Standards Order #36, will require employers to reconsider who’s exempt from overtime. That’s because effective July 1, 2020, the salary threshold for exemption will be set at $817.31 per week ($42,500 per year). It’ll remain at that level for 2021. Starting Jan. 1, 2022, the annual amount will go up by $3,000, until it reaches $57,500 in 2026. Then, once 2027 hits, the salary threshold will be adjusted by the Consumer Price Index.

In the past, because Colorado didn’t have a salary threshold, businesses only had to follow the FLSA requirements. Now, employers need to keep track of both the federal and state dollar amounts. Right out of the gate, the salary threshold under the Colorado Overtime and Minimum Pay Standards Order #36 was much higher than under the federal regs -- i.e., $684 per week ($35,568 per year) for 2020.

Salary alone doesn’t make someone exempt from overtime. The worker must also perform certain tasks. As in the past, the exemption applies to administrative employees, executives or supervisors, and professional employees. Outside salespersons and other employees who don’t need to be paid the salary threshold may also be exempt from overtime.

Not only will more employees need to be paid overtime under the new ordinance, but employers should also make sure they’re tracking overtime on a daily basis. Although under the FLSA, overtime is required after 40 hours in a workweek, in Colorado after 12 hours of work, an employee may be eligible for overtime. Here are the details:

Overtime pay of one and one-half times the employee's regular rate of pay must be paid anytime an employee works over 40 hours in one workweek, 12 hours in a single workday, or 12 consecutive hours (regardless of start or end day and excluding any meal period).

If an employee's hours fall into more than one of the categories above, they must be paid based on whatever calculation results in higher pay for the employee.

Colorado considers the regular rate of pay to be the total payments received in a workweek divided by the total hours worked for the workweek to receive a per hour rate. Shift differentials, bonuses, and commissions must be included in the total paid calculation.

Child Labor Laws in Colorado

Colorado youth labor law — the Colorado Youth Employment Opportunity Act (CYEOA) — includes anyone under age 18 except those who have already graduated high school or received a general educational development examination (GED).

Exceptions to the youth labor law apply for certain entertainment industry jobs, home chores, when work is done for a parent (where the parent is not paid for the work), paper carriers, and schoolwork or school-supervised activities.

Unemancipated minors may be paid an alternative minimum wage of $10.20 per hour (as of January 1, 2020).

In addition to FLSA regulations, Colorado places further limits on permissible jobs for minors based on age.

Colorado begins listing allowed jobs by age for those as young as nine years old and generally prohibits those under age nine from working.

Allowed job categories are split at age nine and up, age 12 and up, age 14 and up, and age 16 and up.

A hazardous job list for all ages explicitly excludes some jobs for any minor. Minors, parents or employers may request exemptions from the Division of Labor and Employment. Each request for exemption is evaluated on a case-by-case basis.

Hours worked by minors are restricted in order to prevent conflict with school responsibilities and hours. However, in some cases minors aged 14 or age 15 may request a school release permit from the school district to be allowed to work during school hours.

Other than babysitters and some entertainment industries employing minors, no minor under 16 can work between 9:30 p.m. and 5:00 a.m on the night before a school day. Those under 16 may only work non-school hours between 7:00 a.m. and 7:00 p.m. during the school year but may work as late as 9:00 p.m. during the summer.

For home-schooled students, school hours (for the purposes of this legislation) are defined by the school district in which the home-schooled student lives.

Employer Recordkeeping Requirements

Colorado requires specific recordkeeping in relation to minimum wage law.

Employers must keep employee records that include name/address, date of hire, job, date of birth (for minors), hours worked (daily), tips, credits claimed for tipped employees, pay rate, gross pay, net pay and any withholding.

Itemized earning statement records must be kept for at least three years following each payment as well as a copy of current information provided to employees each payday.

Recent Colorado Labor Law Updates

Colorado Overtime and Minimum Pay Standards Order #36 - Mandatory - March 2020

Effective March 16, 2020, this replaces the Colorado Minimum Wage Order #35, which applied only to certain industries.

Fair Employment - Mandatory - July 2019

The Colorado Fair Employment poster has been updated to reflect new protected categories. Employers are prohibited from discriminating against employees who inquire about, disclose, or discuss their wages. The poster was also updated with information about reasonable accommodations for employees with disabilities.

Unemployment Insurance - Mandatory - May 2019

The poster has been updated to Include new web addresses where employees can find information about classification and payment practices. It has also been updated to include new contact information for filing a misclassification complaint and applying for unemployment insurance benefits.

Workers' Compensation - Mandatory - May 2019

The Colorado Workers' Compensation poster has been updated to reflect a new web address for obtaining forms and information regarding the workers' compensation system. A toll-free phone number has also been added.

Colorado Labor Law Frequently Asked Questions

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