Colorado Law Alert - Colorado Wage and Hour Updates
DEC 22, 2021
Colorado has issued several new wage and hour rules effective January 1, 2022. While the rules are extensive, the issues discussed below are likely to be the most relevant. For additional details, you can review the COMPS Order #38, Wage Protection Rules, and PAY CALC Order.
The minimum wage in Colorado will increase to $12.56 per hour. The minimum base wage for tipped employees will be $9.54 per hour.
Agricultural workers (except for “range workers”) will now be entitled to the state minimum wage.
The minimum wage in Denver will increase to $15.87 per hour. The minimum base wage for tipped employees will be $12.85 per hour.
Minimum Exempt Employee Wages
The minimum salary for exempt executive, administrative, professional, and computer employees will be $865.38 per week ($45,000 per year).
The minimum wage for an exempt computer employee who is paid on an hourly basis will be $28.92 per hour.
Highly Compensated Employee Exemption
Colorado does not currently recognize the Highly Compensated Employee (HCE) exemption to minimum wage and overtime, which is available under federal law. Beginning January 1, employers in Colorado can use this exemption so long as the employee meets the HCE duties test, makes at least $865.38 per week, and makes at least $107,432 total per year. (Colorado law says the minimum yearly salary is $101,250, but since the federal minimum is higher, it must be met.)
Use-It-Or-Lose-It Paid Time Off Policies
Colorado’s requirements on vacation and PTO payout have been murky in recent years but have now been clarified. All earned paid time off that can be used at an employee’s discretion is non-forfeitable. This means employers can’t have a rule that employees will lose their vacation or PTO at the end of each year or forfeit it upon termination. Time off can be used “at an employee’s discretion” when it doesn’t require a precipitating event (like FMLA, state sick leave, or a specific holiday) to be used. If an employer offers a bank of paid leave that can be used for any purpose, no part of it can be forfeited.
Healthy Families and Workplaces Act (HFWA)
In 2022, Colorado’s paid sick leave law will apply to employers of all sizes. (In 2021, regular paid sick leave only applied to employers with 16 or more employees but the public health emergency leave portion applied to all employers.) You can read an overview of the requirements of the law on the platform.
The state has recently answered several questions about determining an employee’s regular rate of pay for the purpose of paying their sick time under the HFWA, namely:
- Bonuses do not need to be included in the calculation
- Employers must use a 30-day lookback to determine an employee’s regular rate of pay (or their entire employment if less than 30 days)
- The rate for employees with variable pay rates must be determined by adding all of their wages for the last 30 days, then dividing by the total number of hours worked
Display the updated Colorado Paid Leave & Whistleblower Poster where your employees can easily access it. If you have 15 or fewer employees, add a paid sick leave policy to your handbook. Note that you are not required to provide additional public health emergency leave (PHEL) hours for 2022, although employees are entitled to carry over their unused PHEL hours if they have any remaining.