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Colorado Overtime & Labor Laws

Labor Laws in Colorado

The new Colorado Overtime and Minimum Pay Standards (COMPS) Order went into effect on March 16, 2020. The new law expands coverage of the minimum wage and overtime regulations to most industries, increases the minimum salary required for the most common exemptions, places greater limitations on exemptions from the overtime requirements, expands the definition of time worked, and clarifies prior ambiguous wage laws.

Minimum Wage Regulations in Colorado

In November 2016, Colorado passed Amendment 70 raising the Colorado minimum wage.  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.

Colorado Minimum Wage Rates by Year

  • Cost of Living Adjustments after 2020
  • 2020:  $12.00/hour
  • 2019:  $11.10/hour
  • 2018:  $10.20/hour
  • 2017:  $9.30/hour
  • 2016:  $8.31/hour
  • 2015:  $8.23/hour
  • 2014:  $8.00/hour

Tipped Employees’ Minimum Wage

  • Cost of Living Adjustments after 2020
  • 2020:  $8.98/hour
  • 2019:  $8.08/hour
  • 2018:  $7.18/hour
  • 2017:  $6.28/hour

An employer of a tipped employee may deduct a tip credit from the minimum wage of no more than $3.02 per hour. An employee’s tips plus the cash wage must equal at least the current state minimum wage.  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.

Denver has raised its minimum wage to $12.85 as of 1/1/2020.  It will increase to $14.77 in 2021 and $15.87 in 2022.  It will then be adjusted annually for inflation based on the Consumer Price Index.

Overtime Pay Regulations in Colorado

Colorado state overtime laws are designed to protect employees from being taken advantage of by their employer. 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

According to Colorado overtime laws, 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 stipulated in Colorado overtime rules. 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.

Colorado overtime laws state that 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 overtime rules do 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.

Overtime Exemptions in Colorado

Certain workers are exempt from the Colorado minimum wage and overtime requirements. Many of the exemptions state the employee must be paid a salary.  The new Colorado state law (effective March 16, 2020), sets the minimum salary for these exemptions at $684/week as of July 1, 2020 (note, under federal law, the minimum salary for these exemptions is $684/week as of 1/1/2020).

This minimum salary will increase as follows:

  • July 1, 2020 – $684/week or $35,568/year
  • January 1, 2021 – $778.85/week or $40,500/year
  • January 1, 2022 – $865.38/week or $45,000/year
  • January 1, 2023 – $961.54/week or $50,000/year
  • January 1, 2024 – $1,057.69/week or $55,000/year
  • January 1, 2025 – Adjusted based on the Consumer Price Index

For work done prior to January 1, 2020, the state law did not set a minimum amount for a salary (federal law did – $455*/week prior to 1/1/2020 and $684/week as of 1/1/2020); however, it did state that executive employees must receive at least minimum wage for all hours worked. This could result in a higher salary requirement than federal law. For example, as of 2018, the Colorado minimum wage was $10.20/hour. If an executive employee is required to work at least 50 hours per week, their salary would have to be at least $510/week which is higher than the federal salary requirement of $455/week. See this page for further details.

Each exemption has its own set of requirements. If all requirements are met, the following professions are exempt from Colorado Wage Order requirements:

  • Salaried Administrative employees
  • Salaried Executives employees
  • Salaried Professional employees
  • Computer professionals earning at least $27.63 per hour
  • Outside salespeople who spend at least 80 percent of the workweek engaged in activities directly related to their own outside sales
  • Truck Drivers, driver’s helpers, loaders, and mechanics of motor carriers but only if the employee crosses state lines in the course of their work [this is very different than federal and prior CO law and may entitle many intrastate truck drivers in Colorado to overtime pay for the first time]

The following employees are exempt only from the Colorado overtime pay requirements:

  • Certain employees of automobile, truck, or farm implement retail dealers
  • Salespersons employed by trailer, aircraft, and boat retail dealers
  • Commission salespeople earning at least 50% of their total earnings in commissions whose regular rate of pay is at least time and a half minimum wage
  • Ski industry employees (exempt only from the 40-hour workweek overtime requirement)

*NOTE: The Department of Labor under the Obama Administration increased this salary amount to $913 per week effective 12/1/2016; however, this increase was blocked by a court ruling.  Instead, the Trump Administration only increased the salary amount to $684 per week effective 1/1/2020. Please see this page for the latest updates.

Independent Contractors

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. A number of factors must be considered in determining if a worker is an employee or an independent contractor. An agreement or label is not enough to change an employee to contractor.

In-home Caregivers & Personal Care Attendants

In-home care workers employed in Colorado by/through a home healthcare company, may be entitled to overtime pay. A recent ruling from a federal judge found that “companion” employees must be paid overtime under Colorado state law, if they are employed by a third-party agency. Caregivers employed directly by individuals (not through a staffing or home health agency), are, however, exempt from the overtime pay requirements of Colorado’s labor laws.

A new rule provides an exemption from the 12-hour daily overtime requirement for direct care/direct support “companions” who are Medicaid-funded and who work shifts of 24 hours or longer.

Holidays / Vacation

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

Breaks / Meals / Lodging

Colorado law requires an employer give its employees an uninterrupted duty-free 30-minute meal period when a shift exceeds 5 consecutive hours. The new Colorado Wage Order gives further details on when these meal breaks should be scheduled.

Additionally, each employee is entitled to a paid 10-minute break for every four hours worked.  See the new Colorado Wage Order for additional details on required rest breaks.

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 for a room or $100 per week for a private residence.

Pay Periods

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.

Pay Stubs

Under the COMPS Order, as modified by the Colorado Department of Labor, pay stubs must be issued for every pay period and must include the following information: (1) employee’s and employer’s names (2) total hours worked in the pay period (3) employee’s regular rates of pay, gross wages earned, withholdings made, and net amounts paid and (4) any credits or tips claimed during the pay period.

Reporting Time Pay

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

All Time Worked Must be Paid

Employees must be paid for all time worked.  The new pay rules make clear “time worked” includes essentially all tasks that take more than 1 minute, including: putting on or removing required work clothes or gear that are worn only on the job; receiving or sharing work-related information; security or safety screening; remaining at the place of employment awaiting a decision on job assignment or when to begin work; performing clean-up or other duties “off the clock”; clocking or checking in or out; or waiting to do any of these aforementioned tasks.

“Time worked” also includes certain travel time, including “employer-mandated transportation that (1) materially prolongs commute time or (2) in which employees are subjected to heightened physical risk compared to an ordinary commute.” Certain sleep time may also constitute “time worked.”

Deductions

According to the FLSA, deductions for items including uniforms, shortages, damaged goods, or trade tools cannot decrease the employee’s hourly wage below the minimum rate.

Statute of Limitations

According to Colorado state overtime laws and wage rules, 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.

State Law Remedies / Penalties

Any employee who is not paid all of the wages they are legally entitled to may file a claim for the unpaid wages along with reasonable attorney fees and court costs.

Retaliation

If an employer retaliates against an employee for exercising their rights under the minimum wage and overtime laws, they may face 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 or her wage.

Questions?

Contact us today to receive more information, as well as a review your specific circumstances. Submit your information through our case evaluation form, send an email, or call Michael Lore at the Lore Law Firm.