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Employment and labor laws in Colorado 2024 guide

An employer's guide to labor laws, payroll, benefits, and taxes in Colorado.

Colorado at a Glance

State capital

Denver

Population

5.76 million

State motto

"Nothing without providence"

Key industries

Aerospace, Bioscience, IT-Software, Energy, Advanced Manufacturing

Major economic hubs

Denver, Boulder, Fort Collins

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Introduction to employment laws in Colorado

Overview

Colorado ranks in the top half of U.S. states to work in because of its wage policies, worker protections, and other employee-centric litigation. The state’s strong commitment to employee rights is reflected in its comprehensive state labor laws that work in tandem with federal regulations to ensure a fair and balanced work environment.

In this guide, we’ll help you to stay compliant while hiring and manage employees in the Centennial State.

Employing in Colorado: Key employment laws and practices

Standard work hours

Full-time employment in Colorado requires at least 30 hours of work per week. Some Colorado-based employers in industries such as retail and hospitality may consider 32 or 35 hours per week as full-time employment. The weekly threshold for overtime is 40 hours.

For businesses employing contractual workers or self-employed professionals, it’s crucial to define work hours clearly in the contract agreement. Understanding the distinction between these categories of workers can help navigate associated regulations.

Minimum wage and overtime

In Colorado, the minimum wage for private sector employees stands at $14.42 per hour. This rate is subject to annual adjustments based on the Consumer Price Index.

Salaried employees, specifically non-exempt employees, are entitled to overtime pay at 1.5 times their regular rate if they work more than 40 hours in a week, more than 12 consecutive hours in a single workday, or 12 consecutive hours over the course of more than a single workday.

Insurance and benefits

An important aspect of HR compliance in Colorado is ensuring the provision of statutory benefits to employees. These include health, dental, vision insurance, retirement benefits, and 401k plans.

It is necessary for employers to be aware of regulations surrounding these benefits to ensure fair treatment of employees and avoid potential penalties. Here’s a complete list:

Benefit

Description

Health insurance

Employers may offer health insurance coverage to employees. The specifics of coverage can vary based on the company policy.

Dental and vision insurance

These are often offered as part of the comprehensive employee benefits package.

Retirement benefits

Mandatory for employers to contribute to a retirement fund. Employees may also choose to contribute a portion of their salary pre-tax.

Meal and rest periods

Colorado law requires employer to provide a paid rest break of at least 10 minutes for every four hours of work. These breaks should be in the middle of the shift, if practical. Some exemptions apply, such as for employees governed by a collective bargaining agreement.

Additionally, Colorado law states that employers must grant an uninterrupted meal break of at least 30 minutes to employees who work more than five consecutive hours. This meal break can be unpaid if the employee is fully relieved of all job duties.

If a full, uninterrupted 30-minute meal break is impractical due to the nature of the work, employees are permitted to consume their meal while working without any loss of time or compensation.

Anti-discrimination laws

The Colorado Anti-Discrimination Act (CADA) applies to all employers, except certain religious organizations and associations not funded by public funds. Under CADA, discrimination based on numerous protected characteristics is prohibited, including race (inclusive of hair texture and type and protective hairstyles), color, creed or religion, sex (including pregnancy), disability, age (over 40), national origin, sexual orientation, gender identity or expression, ancestry, and marriage to a co-worker.

Moreover, harassment is viewed as a form of illegal discrimination under the CADA and is strictly prohibited. Any employer who fails to take immediate remedial measures upon becoming aware of such conduct could be held legally responsible. Retaliation against individuals opposing or reporting discriminatory practices is also unlawful under the CADA regulations.

Multiplier makes it easy to manage benefits for Colorado employees.

Leave policies

Colorado labor laws include several types of leave policies. Vacation leave policy varies by employer but is generally accrued over time. The sick leave policy is governed by the Healthy Families and Workplaces Act (HFWA), which mandates employers to provide eligible employees with paid sick and safe leave. For parental and maternity leave, the FAMLI program (in conjunction with the Family and Medical Leave Act) allows employees to take up to 12 weeks of unpaid leave in a year to care for a sick family member or for the birth or adoption of a child.

Bereavement leave, jury duty leave, and military leave policies also exist, offering workers time off for personal losses, civic responsibilities, and military service. The specifics of these leaves vary and are influenced by several factors such as the employee’s length of service, employer size, and industry.

Leave Type

Duration

Paid/Unpaid

Vacation Leave

Varies

Usually paid

Sick Leave

Minimum one hour for every 30 hours worked

Paid

Parental & Maternity Leave

Up to 12 weeks/year

Unpaid

Bereavement Leave

Varies

Usually unpaid

Jury Duty Leave

Duration of Jury Duty

Usually unpaid

Military Leave

Up to 15 days/year

Unpaid

Termination laws

Colorado is an “at-will” state, meaning either an employer or employee can terminate the employment relationship without notice unless an employment contract specifies otherwise.

It is customary for employees to give two weeks’ notice when resigning from their position, although not required by law.

There are no state provisions obliging employers to provide severance pay upon termination. However, employers must pay final wages to an employee immediately upon discharge. Failure to do so may result in penalties. Though vacation time is not required to be paid in Colorado, for employers that elect to provide paid vacation time, terminated employees must be paid for any accrued and not yet used at the time of their exit.

Easily onboard employees in Colorado?

Safety and health

Colorado’s safety and health regulations align with federal Occupational Safety and Health Administration (OSHA) standards. Employers are required to provide a safe workplace free from recognized hazards that could cause death or serious harm to employees. This includes developing a written safety policy, implementing safety training programs, reporting work-related injuries and illnesses, and complying with specific industry regulations.

Taxes in Colorado

Employers in Colorado are responsible for several taxes. They must withhold federal income tax and state income tax from employees’ wages. Social Security and Medicare taxes, commonly referred to as FICA taxes, must also be deducted from employee wages.

In addition, employers are responsible for paying Federal Unemployment Tax Act (FUTA) taxes and State Unemployment Tax Act (SUTA) taxes. These fund unemployment compensation benefits for eligible workers. Specific tax rates may vary based on the employer’s experience rating and other factors.

Tax Type

Tax Rate

Federal Income Tax

Varies

State Income Tax

4.4%

SDI Tax

1.0%

UI Tax

Varies

ETT

0.1%

Social Security Tax

6.2% (employer and employee each)

Medicare Tax

1.45% (employer and employee each)

Sales Tax

2.9% (state rate), up to 11.2% (combined state and local rate)

Property Tax

0.55% (average)

Managing Colorado employees with an Employer of Record (EOR)

If you’re looking to hire in Colorado, understanding the state’s employment laws and HR compliance requirements is crucial. In this complex landscape, partnering with an experienced organization like Multiplier can be beneficial.

As a leading Employer of Record Solution provider, Multiplier enables businesses to hire full-time employees in Colorado without the need to set up a local U.S. entity.

With our global payroll platform, you can process payroll not only for all your employees, local and international, on time while managing local taxes, contributions, and withholdings.

Our platform ensures compliance with Colorado laws while creating a seamless experience for your workforce.

Curious to see how it works? Book a demo and discover how you can streamline your HR and compliance processes.

FAQs

Full-time employment in Colorado is typically considered as working between 30 and 40 hours per week. This definition, however, may vary depending on the employer’s policy and the nature of the job.

Colorado’s Department of Labor and Employment regulates work and overtime laws. Non-exempt employees who work over 40 hours in a week, more than 12 consecutive hours in a single workday, or 12 consecutive hours over the course of more than a single workday are entitled to an overtime pay rate of 1.5 times their regular pay rate. However, some employees may be exempt from overtime as per the federal Fair Labor Standards Act and state-specific salary thresholds.

As of 2024, the minimum wage for private sector employees in Colorado is $14.42 per hour. Businesses must adhere to this wage guideline to ensure legal compliance.

According to state law, employers must pay their employees at least once per month.

Colorado law mandates employers to provide certain benefits and leaves to their employees. This includes paid family and medical leave, family care leave, paid sick leave, as well as leave for domestic violence, civil air patrol duty, volunteer work, and voting. Understanding these requirements is essential for maintaining HR compliance.

Managing employees in Colorado?

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