Minimum Wage Regulations in Colorado
In November, 2016, Colorado passed Amendment 70 raising the Colorado minimum wage to $9.30 in 2017. Tipped employees must be paid a minimum wage of $6.28. 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 will increase to $10.20 in 2018, $11.10 in 2019, and $12.00 in 2020. Tipped employees’ minimum wage will increase to $7.18 in 2018, $8.08 in 2019, and $8.98 in 2020. Cost of living adjustments will be made after 2020.
Prior minimum wage rates in Colorado were $8.31 per hour for 2016, $8.23 per hour for 2015, and $8.00 per hour for 2014.
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. This means that if an employee only averages $2 per hour in tips, the employer must pay a cash wage of $6.31 per hour (using 2016 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.
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 employees 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.
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.
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.
Overtime Exemptions in Colorado
Certain workers are exempt from the Colorado Wage Order and/or overtime requirements. Many of the Wage Order exemptions state the employee must be salaried. The state law does not set a minimum amount for a salary (federal law does – $455*/week); however it does 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 is $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 current 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 sales people who spend at least 80 percent of the workweek engaged in activities directly related to their own outside sales
The following employees are exempt only from the 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. The Trump Administration is now reconsidering these changes and appears to favor a lower minimum salary amount. Please see this page for the latest updates.
Labor Laws in Colorado
Holidays / Vacation3>
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 to give its employee an uninterrupted 30-minute break for every five hours worked. Additionally, each employee is entitled to a paid 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.
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.
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 appropriate wages may initiate a civil action against his employer for owed wages. The employee may also recover a penalty from the employer equal to the greater of 125 percent of the amount owed or 10 days of compensation.
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.
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.