7 Essential Employment Laws for Colorado Businesses

Understanding Colorado employment laws can help employers and employees protect their rights and foster a compliant and fair work environment. Colorado’s labor laws have evolved to address various aspects of workplace policies, including wages, working hours, and employee benefits. Here’s an overview of 7 essential employment laws for Colorado businesses.

1. Minimum Wage and Overtime

Colorado’s minimum wage is updated annually, reflecting the state's cost of living. As of 2024, it is $14.42 per hour, with some localities setting higher rates, like Denver, where it is $17.29 per hour. As a Colorado business owner, it’s crucial to plan for increases each year.

Overtime: Under the Colorado Overtime and Minimum Pay Standards Order (COMPS), employees who work more than 40 hours a week or 12 hours a day must receive overtime pay at 1.5 times their regular hourly rate. This rule applies to most workers, but there are some exemptions, including administrative, executive, and professional employees.

2. Meal and Rest Breaks

Colorado mandates specific break periods for hourly employees:

• Rest breaks: Employees must receive a paid 10-minute break every four hours worked.

• Meal breaks: For shifts exceeding five hours, employees must be given a 30-minute unpaid meal break. Employers cannot require employees to remain on duty during this time, although certain exceptions exist for workplaces where employees cannot be relieved of duty.

3. Paid Sick Leave

The Healthy Families and Workplaces Act (HFWA) mandates that employees accrue one hour of paid sick leave for every 30 hours worked, up to a maximum of 48 hours per year. The HFWA also includes provisions for public health emergencies, requiring employers to provide additional paid sick leave under specified circumstances.

4. Family and Medical Leave

Colorado’s Family and Medical Leave Insurance (FAMLI) program, effective since January 2024, offers paid leave benefits for employees who need time off to care for a newborn, a seriously ill family member, or themselves. Colorado employers and employees are required to contribute to this fund, with payroll deductions that started in 2023 to ensure benefits were accessible by the effective date.

5. Discrimination 

The Colorado Anti-Discrimination Act (CADA) prohibits employment discrimination based on race, color, religion, sex, sexual orientation, gender identity, age, disability, and other protected characteristics. It applies to employers with at least one employee, meaning it has a broader reach than federal discrimination laws.

Equal Pay: Colorado’s Equal Pay for Equal Work Act prohibits pay discrimination based on sex and mandates transparency in job postings by requiring that employers disclose the hourly rate or salary range for each open position.

6. Termination and Unemployment

Colorado is an “at-will” employment state, meaning employers can terminate employees without cause, provided it does not violate any contractual or statutory rights. Employers cannot, however, terminate employees for discriminatory reasons or in retaliation for whistleblowing or filing complaints.

Unemployment Benefits: Terminated employees may be eligible for unemployment benefits depending on the reason for their termination. Generally, employees who are let go through no fault of their own (e.g., due to layoffs) may qualify, whereas those terminated for misconduct may not.

7. Employee Privacy Rights

Colorado has strict data privacy laws that impact how employers manage employees’ data. Employers must take reasonable measures to protect personal information, and in the event of a data breach, they must notify affected employees within 30 days.

Key Takeaways

Colorado's employment laws aim to ensure that workers are fairly compensated, treated without discrimination, and have access to appropriate leave. Employers operating in the state must stay updated on regulations to remain compliant, especially since Colorado regularly updates its labor laws to reflect economic and social changes. Both employers and employees should familiarize themselves with state-specific policies to maintain a respectful and lawful workplace.

If navigating Colorado’s complex employment laws feels overwhelming, Atlas Services is here to help. As a Colorado-based business, we specialize in HR services tailored to meet the unique regulatory demands of businesses in the state. Our team provides extensive guidance on compliance, employee management, and best practices to keep your business running smoothly and within legal boundaries. Partner with us to ensure your HR processes align with Colorado's evolving employment landscape.