A scenic picture of the Rocky Mountain range behind Denver, Colorado

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Colorado has enacted minimum wage and overtime pay reforms in the last few years that have greatly enhanced the protections of workers in the state. Taken together, the state’s wage and hour laws often give employees greater rights than those afforded under federal law. But that doesn’t mean employers always do what is required of them. If you’re not being paid fairly for your work, in violation of federal and/or Colorado wage law, The Lore Law Firm can assist.

Colorado’s Minimum Wage Rates

The current minimum wage in Colorado for non-tipped employees is $12.56 per hour as of January 1, 2022. It will increase to $13.65/hour on January 1, 2023. The state constitution requires annual minimum wage increases based on inflation. Local municipalities are allowed to set a higher rate if they desire. For example, in Denver, the minimum wage is $15.87/hour in 2022. It will jump to $17.29 on January 1, 2023.

Special Rules For Tipped Employees

In Colorado, tipped employees must be paid $9.54 per hour. However, the employer must pay any difference between this hourly rate plus tips and the regular minimum wage rate.

Employers of tipped workers may deduct a tip credit from the minimum wage of no more than $3.02 per hour. An employer may not claim tip credits toward the regular minimum wage rate if employees are required to share their tips with employees who do not regularly receive tips or if the employer deducts credit card processing fees from the employees’ tips.

Overtime Pay Regulations in Colorado

Colorado’s overtime rules are more favorable to employees than those provided under federal law. Non-exempt workers (which are most workers) must be paid time and a half, or 1.5 times their regular pay rate, for any work in excess of:

  • 40 hours per workweek
  • 12 hours per workday
  • 12 consecutive hours, regardless of the start and end time of the workday

The employer must pay whichever calculation results in higher payment.

The regular rate for employees who are paid a weekly salary, or on some other non-hourly basis, may be their total pay divided by hours worked – provided that the salary provides at least minimum wage for all hours in workweeks with the greatest hours. If this requirement is not met, the employee’s regular rate on which overtime pay must be based will be their total weekly pay divided by 40 hours.

Colorado employers must firmly establish the workweek, which is defined as a period of 168 hours (or seven consecutive 24-hour days). 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.

The state’s overtime rules do not generally limit the number of hours per week an employer may require its employees to work. One exception is that employees working in certain hazardous jobs (e.g. smelting and underground mining) may not work more than eight hours in one 24-hour period.

Special Overtime Rules For Healthcare Workers

Like some states, Colorado has special overtime rules for healthcare workers. A hospital or nursing home may seek an agreement with individual employees to pay overtime pursuant to the provisions of the federal Fair Labor Standards Act’s “8 and 80 rule.” Under this rule, employees are paid 1.5 times their regular rate of pay for any work performed in excess of 80 hours in a 14 consecutive day period and for any work in excess of 8 hours per day.

What Are The COMPS Orders?

The Colorado Overtime and Minimum Pay Standards Orders (COMPS Orders) regulate minimum wage and overtime rules in the state. The most recently enacted versions of the COMPS Order accomplished the following objectives:

  • Expanded coverage of the minimum wage and overtime regulations to most industries
  • Increased the minimum salary required for the most common exemptions
  • Placed greater limitations on exemptions from the overtime requirements
  • Expanded the definition of time worked

The year 2020 saw major changes to the COMPS Orders, the most significant of which concerned overtime rules. The amendments provide greater overtime pay rights to:

  • Salaried administrative employees who do not directly serve an executive
  • Salaried executive or supervisory employees who do not spend at least 50% of their time performing supervisory duties
  • Truck drivers who never leave the state

Overtime And Minimum Wage Exemptions In Colorado

Certain workers are exempt from the state’s minimum wage and/or overtime requirements. Some examples are:

  • Salaried administrative employees
  • Salaried executives or supervisors
  • Salaried professional employees
  • Outside salespersons
  • Computer professionals

Some individuals are only exempt from overtime rules. Examples of these workers include:

  • Certain employees of automobile, truck, or farm implement retail dealers
  • Salespersons employed by trailer, aircraft, and boat retail dealers
  • Commission salespeople, provided they earn at least 50% of their total earnings in commissions and their 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)

Many of the wage and hour exemptions require that the employee be paid a minimum salary, the amount of which adjusts annually through 2025. The most recent, current, and future rates are:

  • 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. However, federal law did. Also, Colorado law required that executive employees receive at least minimum wage for all hours worked, which could result in a higher salary requirement than federal law. If you have questions about salaried pay prior to 2020, reach out to an experienced wage and hour attorney.

Special Overtime Rules For Truck Drivers

Colorado has rather unique rules that apply to overtime pay for truck drivers. For the period of 3/16/2020 through 12/31/2020, truck drivers (along with driver’s helpers, loaders, and mechanics of motor carriers) were exempt from overtime rules only if the employee crossed state lines in the course of their work. This is very different from federal and prior Colorado law and may entitle many intrastate truck drivers in Colorado to overtime pay for this period of time.

As of January 2021, Colorado’s law regarding truck driver overtime was largely brought in line with federal law (e.g. the Motor Carrier Act (MCA)). Starting January 2021, drivers and driver’s helpers who do not cross state lines may become exempt from receiving overtime pay if they are moving goods that are traveling in interstate commerce or even if they could reasonably be called upon to make an interstate trip. 

It should be noted, however, that this rule is not retroactive and does not change entitlement to overtime pay from March-December 2020. Also, note that Colorado state law does require that to be exempt, truck drivers and drivers’ helpers must be paid at least 50 hours at the Colorado minimum wage rate, including overtime at 1.5 times the minimum wage. As of 2022, a truck driver or helper must earn at least $690.80 per week ($12.56 x 40 hours + $12.56 x 1.5 x 10 hours) to be exempt from overtime under Colorado state law.

Colorado Independent Contractor Rules

Certain individuals fall outside the definition of an “employee” under Colorado’s wage and hour laws. That means that they are not entitled to a minimum wage or overtime pay. As is common elsewhere, employers often abuse this system by claiming that actual employees are independent contractors.

To be properly classified as an independent contractor, a worker must be (a) primarily free from control and direction in the performance of his or her duties, and (b) 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.

In-home Caregivers And Personal Care Attendants

In-home care workers employed in Colorado by or through a home healthcare company may be entitled to overtime pay. A recent federal court ruling determined 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 staffing or home health agency) remain exempt from Colorado’s overtime pay requirements.

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

Holiday Pay, Vacation Pay, And Payout At Termination

Colorado employers are not required to provide vacation, holiday, or other pay for the time that is not worked. However, if vacation benefits are provided, they may not be taken away from workers for any reason. Also, any unused accrued vacation pay balance must be paid out when an employee leaves the company. In other words, workers’ vacation benefits can’t be forfeited when they leave a company, even if they signed agreements allowing for such forfeiture if they are fired or if they fail to give two weeks’ notice.

Breaks, Meals, And Lodging Rules

Employees are entitled to an uninterrupted, duty-free 30-minute meal period when a shift exceeds 5 consecutive hours. To qualify as uncompensated (non-work) time, employees must be completely relieved of their work duties and free to pursue personal activities. Also, each employee has the right to take a paid 10-minute break for every four hours worked.

Employers may meet their minimum wage requirements by providing employees with meals or lodging. However, there are limits to the use of these credits. For example, the 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 For Colorado Workers

Employers and employees may contractually agree to set pay periods for wages and salaries. In the absence of such an agreement, all wages or compensation shall be due and payable for regular pay periods of no greater time duration than one calendar month or thirty days, whichever is longer. Additionally, regular paydays must be no later than ten days following the close of each pay period.

Pay Statement Requirements

Pay stubs or statements must be issued for every pay period (or once a month) and must include the following information:

  • Gross wages earned
  • All withholdings and deductions
  • Net wages earned
  • The inclusive dates of the pay period
  • The name of the employee or the employee’s Social Security Number
  • The name and address of the employer

No Rules For Reporting Time Pay

Some employers do a poor job of scheduling shifts, allowing workers to show up and either not work at all or not work the full number of hours they were promised. Unfortunately, neither Colorado nor federal law requires an employee to be paid if he or she reports to work but does not get to work their full schedule.

All Time Worked Must be Paid

Employees must be paid for all time worked. “Time worked” includes time during which an employee is performing labor or services for the benefit of an employer. This definition also covers all time the employee is permitted to work, whether or not required to do so.

Time worked also includes any time the employee is required or permitted to be on the employer’s premises, time the employee is on duty, and time spent at a prescribed workplace. The following is a list of specific activities for which the worker must be paid if such tasks take over one minute:

  • Putting on or removing required work clothes or gear (but not a uniform worn outside work as well)
  • Receiving or sharing work-related information
  • Security or safety screenings
  • Remaining at the place of employment awaiting a decision on a job assignment or when to begin work
  • Performing clean-up or other duties “off the clock”
  • Clocking or checking in or out
  • Waiting for any of the preceding activities

Certain travel time is also included in the definition of time worked, including employer-mandated transportation (1) that 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 paid time worked.

Deductions From Employee Pay

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. Colorado also has certain rules regarding these and other deductions. For example, employers cannot deduct the cost of ordinary wear and tear on a uniform from an employee’s wages. If you have questions about deductions, check with an experienced Colorado wage and hour attorney.

Statute of Limitations For Wage And Hour Complaints

If you were not paid fairly or accurately for your work, you only have a limited amount of time to file a complaint. Your claim must be brought within two years after the cause of action accrues, except for “willful” violations, which must be commenced within three years. This matches the federal (FLSA) standard.

However, it is not advised that you wait until the two- or three-year mark. The sooner you commence legal action, the more likely that important details and records will be preserved.

State Law Remedies And Penalties

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

Retaliation Against Employees Is Illegal

If an employer retaliates against an employee for exercising their rights under the minimum wage and overtime laws, it could face criminal penalties. These may include a fine and jail time. In addition, the Wage Transparency Act prohibits Colorado employers from forcing employees to give up their right to disclose their wages as a condition of employment. Employers may not retaliate against an employee in any way for disclosing his or her wage.

Contact Our Colorado Wage And Hour Attorney

Colorado’s labor laws are complex, with a number of detailed definitions, exceptions, and applicable regulations. Perhaps your employer has failed to pay you minimum wage or overtime. Or there may be another provision of the state’s wage and hour laws that your employer has violated. Either way, let The Lore Law Firm help you assert your legal rights. Contact us through our online form today for a confidential review of your situation.