Colorado Overtime and Wage Laws

The minimum wage in Colorado as of January 1, 2013 is $7.78 per hour and is adjusted annually for inflation. As the Colorado state minimum wage rate is higher than the federal minimum wage rate of $7.25, employees must be paid the higher state rate. An employer of a tipped employee may deduct a tip credit from the minimum wage, although the employer must pay a cash wage of at least $4.76 per hour. An employee’s tips plus the cash wage must equal at least the minimum wage of $7.78 per hour. This means that if an employee only averages $2 per hour in tips, the employer must pay a cash wage of $5.78 per hour. An employer may not claim tip credits toward the minimum wage if the employer requires its employees to share tips with employees who do not regularly receive tips (cooks, managers, etc.) or if the employer deducts credit card processing fees from the employees’ tips.

Colorado’s overtime wage laws are more favorable to workers than federal law. Under Colorado state wage law, employers are required to pay each non-exempt employee an overtime wage of one-and-a-half times the employee’s regular hourly rate for all hours worked in excess of:

• 40 hours in one workweek
• 12 hours in one workday
• 12 consecutive hours, regardless of whether the work period overlaps into a second day

An employer must pay its employees under the method that would give the greatest benefit to the employees. For instance, assume an employee works three 13-hour days in one week for a total of 39 hours worked. The employee has not worked 40 hours, so he is not entitled to any overtime under the first method. However, the employee worked more than 12 hours each day he worked, so he is entitled to three hours of overtime (at one-and-a-half times the regular hourly rate) under that method.

An employer must firmly establish the workweek, which is defined as a period of 168 hours (or seven consecutive 24-hour days), and an employer may not average multiple workweeks together in order to pay employees less or no overtime. A workday is a consecutive 24-hour period beginning at the same hour each day.

Colorado labor law does not limit the number of hours per week an employer may require its employees to work. One exception to this rule is that employees working in certain hazardous jobs most notably smelting and underground mining may not work more than eight hours in one 24-hour period pursuant to the Colorado Eight-Hour Day Act.

Certain individuals fall outside the definition of an “employee” under Colorado’s labor laws, meaning that they are not entitled to a minimum wage or overtime pay. While employers will commonly claim that workers are independent contractors (and not entitled to overtime pay), to be properly classified as such, a worker must be primarily free from control and direction in the performance of duties and customarily engaged in an independent trade, occupation, profession or business.

Certain workers are exempt from the Colorado wage and hour laws, meaning their employer is not required to pay minimum wage or overtime. Most of the exemptions require the employee to be salaried, although the state laws do not set a minimum amount for a salary (federal law does – $455/week) or when salary payments must be made. Each exemption has its own set of requirements.

The following are exempt from the minimum wage and overtime pay requirements if all requirements are met:

• Administrative employees
• Professional employees
• Executives
• Computer professionals earning at least $27.63 per hour
• Outside sales people who spend at least 80 percent of the workweek engaged in activities directly related to their own outside sales

The following are exempt only from the overtime pay requirements:

• Employees of farm implement retail dealers
• Salespersons employed by trailer, aircraft, and boat retail dealers
• Commission salespeople receiving at least 75 percent of their annual dollar volume from commission
• Ski industry employees (exempt only from the 40-hour workweek overtime requirement)

In Colorado, employers may make their employees work on holidays or weekends without receiving additional pay, unlike government workers. Employers are not required to offer vacation, holiday or other pay for time that is not worked.

Colorado law requires an employer to give its employee a paid, uninterrupted 30-minute break for every five hours worked. Additionally, each employee is entitled to a 10-minute break for every four hours worked.

An employer who furnishes its employee with meals or lodging may include the cost or fair market value of the meal or lodging as part of the minimum wage. However, value of lodging applied toward the minimum wage may not exceed $25 per week.

Under Colorado wage law, an employer must pay its employees at least once per calendar month. Paydays must be regular and occur within 10 days of the end of the close of the pay period unless a separate agreement exists.

Neither Colorado nor the Federal law requires payment if an employee reports to work expecting to work for a certain number of hours but does not get to work their full schedule.

Colorado law does not specifically address the types of deductions which can be taken; however pursuant to the FLSA, deductions for items such as uniforms, shortages, damaged goods, or trade tools cannot reduce the employee’s hourly wage below the minimum rate.

Suits for unpaid wages must be brought within two years (three years if the employer’s violation is willful) or else the employee is barred by the statute of limitations.

Any employee who is not paid appropriate wages may initiate a civil action against his employer. Additionally, an employee may recover a penalty from the employer, but these claims must be brought within 60 days of the end of employment. The employer then has 14 days to mail all earned, vested, and determinable wages or compensation. The penalty for failure to do so is the greater of 125 percent of the amount owed or 10 days of compensation, up to and including $7,500, plus 50 percent of the amount over $7,500. This total amount of the penalty owed to a wronged employee is raised by 50 percent if the employer’s violation is willful.

An employer who retaliates against an employee in any way for exercising their rights under the minimum wage and overtime laws faces criminal penalties, including a fine and jail time. Additionally, the Wage Transparency Act specifically prohibits Colorado employers from forcing an employee to give up the right to disclose his wage as a condition of employment, and employers may not retaliate against an employee in any way for disclosing his wage.

Contact us and we can give you more information and review your specific circumstances. You can submit your information using the convenient case-evaluation-form , send an email or call Michael Lore at the Lore Law Firm.