Companies that employ workers must abide by both federal and state employment laws. The Colorado Wage Act, which governs private-sector employees, answers many questions about how and when businesses should pay their workers.
Review these highlights of the Colorado wage and hour laws to ensure your business complies and avoids significant fines and penalties.
Minimum wage and overtime
As of Jan. 1, 2020, Colorado requires employers to pay workers a minimum of $12 per hour. When an employee who receives hourly pay works overtime, he or she must receive time-and-a-half pay for the excess hours. The law defines overtime as more than 12 consecutive hours in a single shift or more than 40 hours in a workweek.
Timing of wages
The Colorado Wage Act states that an employee pay period must be shorter than 30 days or the calendar month, whichever is longer. Businesses must issue employee paychecks within 10 days of the end of the pay period.
Businesses must issue their employees a written pay statement that lists:
- The business name and address
- The employee name or Social Security number
- The dates of the relevant pay period
- Earned gross and net wages
- Itemized deductions and withholdings, such as taxes and benefit contribution
Colorado prohibits direct deposit unless the employee opts for this arrangement at his or her choice of financial institution. The employer can issue a pay card only when the worker can access the full net pay without a fee.
Meals and breaks
When a worker’s shift exceeds five hours, he or she must receive a paid meal break of at least 30 minutes. In addition, the state law entitles workers to a paid rest period of at least 10 minutes for every four hours of work completed.
Although these are the key provisions of Colorado’s wages and hours regulations, many exceptions exist. For example, workers who receive tips may not be subject to the state minimum wage, so it is important for business owners to review the law closely.