Intro to Colorado Labor Laws

The Colorado Supreme Court recently ruled that holiday incentive pay must be factored into employees’ regular rate of pay for overtime calculation purposes. An employee’s regular rate of pay is determined based on their wages,  including but not limited to hourly rates, shift differentials – increased pay for working irregular or undesirable work hours, non-discretionary bonuses, and commissions. The Court determined that because holiday pay is given to employees for working undesirable shifts, it falls under the definition of a shift differential.  Colorado joins states like California in this trend. 

Employers should update their written holiday pay policies in accordance with the new law. For Justworks PEO customers, administrators must manually include holiday hours into overtime in Justworks, under Timecards > Edit > Calculate overtime. For Justworks Payroll customers, all pay rates will be taken into account when calculating overtime.

Starting July 1, 2025, Colorado will require employers to obtain consent before collecting or using employees’ biometric data, such as fingerprints or facial recognition. Employers must also create a policy detailing how this data will be handled. This law aims to protect employees' biometric information and ensure its secure use. Employers should review and audit current data practices, update policies, and ensure employee consent for biometric data collection to comply with these new requirements.

On June 5, 2023, Governor Polis signed the Ensure Equal Pay for Equal Work Act, amending the Equal Pay for Equal Work Act (EPEW) to clarify and enhance an employer’s obligations relating to announcement of a new role or promotional opportunity (which the Act refers to as a “job opportunity”). 

Among other updates, the state narrowed the notice requirements for certain out-of-state employers and certain promotions (e.g. “career progressions”), and added a notice requirement around the final selected candidate for a given job opportunity. Employers should review and revise their job posting and promotion processes accordingly.

Colorado has amended its anti-discrimination law to expand the state’s CROWN Act. This act prohibits race based discrimination, including traits linked to race such as hair texture and hair type. Effective August 7, 2024, hair length will be considered a trait associated with one’s race.

On June 6, 2023, Governor Jared Polis signed the Protecting Opportunities and Workers’ Rights (POWR) Act, which lowers the threshold for viable harassment claims to any conduct that is “subjectively offensive to the individual alleging harassment and is objectively offensive to a reasonable individual who is a member of the same protected class.” Additionally, the POWR adds ‘marital status’ as a protected category, meaning employers cannot take any adverse action based on an employee’s marital status. Among other new requirements, the law also strictly regulates nondisclosure agreements when they limit disclosure of discrimination or unfair employment practices, and mandates employers to keep personnel and employment records for at least five years.

On June 2, 2023, Governor Polis signed the Job Application Fairness Act (JAFA), prohibiting employers from asking certain age-related questions on initial employment applications or during the hiring process. These questions include inquiries about age, date of birth, and dates of attendance at or graduation from educational institutions. The enactment of JAFA builds upon existing requirements and prohibitions in Colorado's hiring process, such as the "ban-the-box" policy that restricts the inquiry into criminal histories, as well as the mandate to include salary and benefits information in job postings.