The purpose of employment laws is to protect employees at work. From discrimination to workplace safety, employers must adhere to these regulations or face severe penalties. In the United States, employment and labor laws are a mix of federal, state, and local regulations. Ensuring compliance can be a challenge due to regional differences and constant amendments.
Colorado ranks as one of America’s top worker-friendly states, especially in terms of wages and worker protections. If you’re hiring in Colorado—whether in Denver, Boulder, or anywhere else—it’s vital to understand and comply with the state’s specific labor regulations.
Rippling’s Professional Employer Organization service can manage local tax registration and management—making sure you’re compliant with Colorado’s laws and enabling you to grow your business quickly and easily.
Employment vs. labor law: What’s the difference?
What’s the difference between employment and labor law? The terms are typically used interchangeably and while there are some similarities, they are legally distinct. The distinction comes down to the parties involved: If the issue pertains to the relationship between an employer and an individual, it generally falls within the realm of employment law. When it involves an employer and a collective of individuals, such as unions, you step into the domain of labor law.
These are the main areas of what employment and labor laws each cover:
- Employment law addresses subjects like working hours, compensation, overtime, recruitment practices, discrimination, and retaliation.
- Labor law is a subset of employment law that encompasses matters like union membership, dues, and collective bargaining agreements.
Wages and hours in Colorado
Employers must follow the relevant local regulations in Colorado when paying employees. You must also comply with Colorado’s pay transparency laws. This means that employees must be paid fairly (i.e. equal wages for equal work) and wage scales must be disclosed.
Minimum wage in Colorado
Colorado’s minimum wage rate in 2023 is $13.65 per hour, which is considerably more than the $7.25 per hour federal minimum wage. For tipped employees, the rate is $10.63. A maximum of $3.02 per hour in tips can be used to offset the minimum wage of tipped employees. If tips do not bring the employee up to the state minimum, the employer must pay the difference.
For businesses based in Denver, the minimum wage is $17.29 per hour and is due to increase to $18.29 per hour in 2024.
When establishing hourly wages for staff, Rippling identifies any potential minimum wage violations according to state and local regulations, ensuring compliance across the state and in Denver, where the minimum wage is higher.
Overtime pay in Colorado
When an employee works beyond their normal hours, Colorado law requires employers to compensate workers at 1.5 times the regular rate for work over:
- 40 hours per workweek
- 12 hours per workday
- 12 consecutive hours regardless of the start/end time of the work day (excluding meal period)
Payment is based on whichever calculation is highest. Some workers, such as executives, are not entitled to overtime pay.
In order to comply with overtime pay laws in Colorado, Rippling’s payroll software automatically applies the correct overtime pay rates when an employee triggers overtime pay requirements.
Pay transparency in Colorado
Pay transparency laws are becoming more common in the US. These laws are an attempt to remedy wage disparities based on ethnicity, gender, and age.
Colorado’s Equal Pay for Equal Work Act (EPEWA) went into effect on January 1, 2021. It requires employers to include compensation in job postings, notify employees of promotion opportunities, and allow employees to share pay details. Employers must also retain job descriptions and salary information in their record-keeping system. Contravening the EPEWA wage laws can result in fines of anywhere between $500 and $10,000 per violation.
Rippling enforces compensation bands during onboarding and identifies out-of-band adjustments, so you can approve special cases and block others as required.
Breaks and rest periods in Colorado
The Colorado Overtime and Minimum Pay Standards Order #38 requires employers in the state to provide nonexempt employees rest breaks and meal periods. The length of these breaks depends on the number of hours worked and whether the employee is paid during the break.
- Employees are entitled to a meal break (unpaid) of at least 30 minutes after five consecutive hours of work. If a meal break is impractical, then the employee may eat their meal on the job, with no loss of hours or compensation.
- Any meals provided to the employee must be at a reasonable cost and can be used as part of the minimum hourly wage. Employee acceptance is voluntary.
Employees are entitled to receive a paid 10-minute rest period for every four hours of work. Rest periods should be taken in the middle of each four-hour period and the employee does not have to leave the premises.
Rest periods required
Two or less
Two to six
Six to 10
10 to 14
14 to 18
18 to 22
Leaves of absence in Colorado
Employees occasionally need to take time off to deal with personal matters. This could be for medical reasons, caring for a loved one, or other private issues. When these situations arise, employees shouldn’t worry about losing their jobs. This is why there are laws in place to protect workers during this time.
In Colorado, the Family Medical Leave Act (FMLA) gives certain employees the right to take unpaid leave for specified family and medical reasons.
To qualify for FMLA leave, Colorado employees must:
- Have worked for the employer for at least one year
- Worked 1,250 hours during the previous year
- Work at a location with 50 or more employees within a 75-mile radius
When these qualifications are met, employees may request up to 12 weeks of leave in a 12-month period; the leave renews every 12 months as long as conditions continue to be met. Note that military caregivers are entitled to 26 weeks in a 12-month period. Colorado’s Family Care Act (FCA) expands some definitions of the FMLA to include domestic partners and those in a civil union.
An employee is entitled to take unpaid leave for:
- Birth, adoption, or foster child placement
- Their own serious health condition
- Serious health condition of a spouse, parent, or child
- Active duty (military) family leave
- Military caregiver leave
While this leave is unpaid, employees are entitled to use paid leave (if required) and may continue to pay for their regular health insurance. At the end of the leave, the employee is entitled to return to their original position.
Pregnancy disability leave in Colorado
Pregnant workers are often eligible for the FMLA (see above). However, if not eligible, the Pregnancy Discrimination Act (PDA) and Colorado’s Pregnant Workers Fairness Act afford additional protections in the workplace. Employees may also be able to work with the employer to use vacation time or other paid time off.
The good news is that Colorado’s Paid Family and Medical Leave Insurance (FAMLI) program goes into effect in 2024. The FAMLI program gives Colorado workers access to paid leave and other benefits. FAMLI is supported by both employee and employer contributions beginning January 1, 2024. Eligible workers will get up to 12 weeks of paid leave along with an additional four weeks for pregnancy or childbirth. Self-employed workers can also join FAMLI if they pay into it.
Paid sick leave in Colorado
Under the Colorado Healthy Families and Workplaces Act (HFWA), all employers in Colorado must offer their employees accrued paid sick leave (up to 48 hours annually) and public health emergency leave (up to 80 hours per emergency).
The paid sick leave must be paid for time off work at the same rate of pay the employee earns. Paid sick leave can’t be counted against employees as absences that may lead to disciplinary actions or firing.
Employers provide one hour of accrued paid leave for every 30 hours worked to a maximum of 48 hours. This accrued sick leave can be used for:
- The employee’s own serious (mental or physical) health condition
- Care for an ill family member
- Medical/mental healthcare for needs arising from domestic violence, sexual assault, or criminal harassment (including legal and victim services)
- Bereavement or financial/legal needs after the death of a family member
- An unexpected event (bad weather, power outage, etc.) where the employee must evacuate their home or take care of a family member due to a school closure.
Rippling lets you customize and automate your leave policy, giving you complete visibility into how employees use it.
Jury duty in Colorado
Regularly employed jurors are paid a maximum of $50 per day for the first three days of jury service. However, the employer and worker may agree to additional compensation. Regular employment includes full-time, part-time, temporary, and casual work, if the hours are scheduled and established 90 days before jury duty.
Workplace safety in Colorado
Creating and maintaining a safe workplace is every employer’s responsibility. In addition to corporate safety policies, employees must be provided with safe equipment and safety training. Workplace safety in Colorado is governed by the federal Occupational Safety and Health Administration (OSHA). Most private workers in Colorado are covered by OSHA, except for state and local government workers.
In some states, an Injury and Illness Prevention Program (IIPP) or safety committee is required. This isn’t the case in Colorado. However, employers who offer either one can qualify for reduced workers’ compensation insurance premiums.
Rippling PEO offers a practical pay-as-you-go workers’ comp plan that doesn’t require you to pay upfront for the whole year, so you can build your business stress-free in Colorado and elsewhere in the US.
Discrimination and harassment laws in Colorado
Colorado’s legal protections against discrimination and harassment in the workplace have undergone some recent changes. The Protecting Opportunities and Workers’ Rights (POWR) Act changes the legal definition of harassment and lowers the burden of proof from the Colorado Anti-Discrimination Act (CADA). Under POWR, harassment no longer needs to be considered severe or pervasive.
The Colorado Civil Rights Division enforces anti-discrimination laws in the areas of employment, housing, and public accommodation. These regulations safeguard individuals from harassment and discrimination based on:
- National origin
- Sexual orientation
- Gender identity and expression
- Marital status
- Family status
- Physical or mental ability
Employers must comply with anti-discrimination regulations during the entire employment relationship. For example, it’s illegal to pay workers differently based on their gender identity or to terminate a worker based on their ethnicity.
Sexual harassment training requirements vary by state. Employers in Colorado are encouraged to provide training, but it is not a requirement. However, Executive Branch State employees are required to take workplace training. Rippling’s Learning Management System is pre-loaded with core sexual harassment training courses to ensure each employee complies with the state requirements based on their location.
In Colorado—and federally—employers aren’t only liable for the discrimination and harassment they commit; they are also responsible for the words and actions of their employees, regardless of whether they were aware of it happening.
Unions in Colorado
Labor unions can be defined as groups of employees who work together or “act collectively” to improve working conditions, wages, time off, and benefits. The National Labor Relations Act (NLRA) ensures that employees have the right to:
- Organize or join a union to engage in negotiations with their employer
- Bargain collectively by selecting employee representatives to establish terms and conditions of work through a contract
- Discuss their employment terms and conditions with fellow workers
- Initiate efforts to improve working conditions by lodging complaints with their employer or government agencies, or seeking assistance from a union
- Strike and picket, depending on the reason
- Abstain from becoming a member of a union
Under the NLRA, unions are prohibited from using threats of job loss or taking detrimental actions against employees who choose not to join the union. Likewise, employers can’t prohibit, discourage, bribe, fire, demote, or threaten employees who want to support a union.
In some states, right-to-work laws can stop employers from requiring their workers to join a union as a condition of employment. In states with these laws, employers can’t retaliate if a worker decides not to join a union. Colorado is not a right-to-work state.
Colorado’s Labor Peace Act, which is enforced by the Colorado Division of Labor Standards and Statistics, ensures fair treatment for all parties and oversees bargaining unit elections. The Labor Peace Act may allow for some leeway with right-to-work matters. Legal advice for each party is recommended in these cases.
FAQs about Colorado labor and employment laws
Are independent contractors covered under Colorado employment laws?
No. Independent contractors are not entitled to employee rights. In addition, they are responsible for paying their own taxes. Our analyzer tool can help you verify you’re classifying workers correctly and complying with labor regulations.
Does at-will employment exist in Colorado?
Yes, at-will employment exists in Colorado. This means an employer may, with some exceptions, fire an employee without advance notice for any reason and at any time. Employees may do the same with quitting. Exceptions include workers hired for a definite period of time or a written agreement that covers dismissals.
What privacy rights do employees have in Colorado?
While there isn’t a specific regulation to protect the privacy of employees, some protections exist under Colorado law. For example, while employers can use video surveillance of their employees, they cannot record audio without consent.
The Social Media and the Workplace Law states that an employer cannot ask employees for access to their personal social media accounts, require them to add the employer to their social media account, or ask them to change their privacy settings.
The Protecting Opportunities and Workers’ Rights Act (POWR Act) covers non-disclosure and other agreements related to harassment and discrimination.
You should also note that privacy laws of other states may apply in the case of remote workers or business expansion.
Are background checks legal in Colorado?
Yes, employers in Colorado can run background checks on job applicants and employees, but they must follow Colorado state laws and policies. Employers are restricted from asking about criminal background on application forms, but can run criminal checks later in the hiring process.
Are whistleblowers protected in Colorado?
Yes. Colorado protects private and public sector workers from retaliation against reporting illegal or unethical acts. Colorado also has whistleblower protection for public health emergencies that protects workers who make reports concerning health or safety violations.
Is workers’ compensation coverage required in Colorado?
Yes. Colorado requires employers (with one or more employees) to carry workers' compensation insurance. This applies to all employers and all employees, with a few exceptions. Non-compliance can result in daily fines of $500 and the business may be shut down. The employer is responsible for paying the claim plus an additional 25% if an employee is hurt.
Are there required healthcare benefits in Colorado?
Employers with fewer than 50 full-time employees in Colorado do not have to provide healthcare benefits. However, federal law requires employers with 50 or more full-time employees to provide health insurance.
If an employer provides health coverage as a workplace benefit, coverage must be offered to the employees' children until they reach the age of 26. The employer can include the employee's spouse in the plan, although this is not mandatory.
Are Colorado employers required to provide bereavement leave?
No. Under Colorado law, bereavement leave is not required. However, employees can use paid sick leave that they're entitled to under the Healthy Families and Workplaces Act (HFWA) for this purpose.
What employee protections are available in Colorado if layoffs occur?
If a company falls under the jurisdiction of the federal Worker Adjustment and Retraining Notification (WARN) Act, employees are entitled to receive a notice period of 60 days prior to being laid off—whether the layoff occurs in Colorado or any other location within the United States.
Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.