Compliance Watch:
Penalties for Breaking Colorado Labor Laws

May 13th 2024

Operating a business in Colorado comes with a wealth of opportunities and potential for growth. However, to ensure the prosperity and success of your organization, it is crucial to navigate the intricate landscape of Colorado labor laws.

These laws encompass a wide range of areas, including wage and hour regulations, employee classification, workplace safety standards, discrimination and harassment protections, and family and medical leave provisions. Complying with these regulations not only protects your employees’ rights but also safeguards your business from significant financial penalties and potential legal disputes.

In this article, we will delve into the key labor laws that businesses in Colorado must adhere to, shed light on the penalties associated with noncompliance, and provide essential tips to help your business steer clear of legal pitfalls. Let’s get into it!

This Article Covers

Most Common Labor Law Violations in Colorado
Penalties for Breaking Colorado Labor Laws
How to Avoid Violating Colorado Labor Laws

Most Common Labor Law Violations in Colorado

Despite Colorado’s many safeguards to protect workers, violations still fall through the cracks. By understanding these common labor law violations in Colorado, you can avoid making the same mistakes.

  • Workplace Discrimination: One of the most prevalent violations in Colorado is discrimination. This occurs when an employer treats employees unfairly based on factors such as race, gender, age, religion, or disability. In 2020, workplace discrimination accounted for one-third of employment disputes in Colorado. Out of the 638 complaints reviewed by BusinessDen, 217 were related to discrimination.
  • Sexual Harassment: Violations related to sexual harassment can be through unwelcome advances, comments, or conduct of a sexual nature that creates a hostile or offensive work environment. Businesses may unknowingly contribute to sexual harassment by failing to establish effective policies or promptly address complaints.
  • Wage Theft: Approximately 440,000 workers, primarily women, and workers of color, have nearly $730 million in wages stolen from them each year. Disputes regarding final wages contribute most to the state’s FLSA violations, making up almost 40% of all wage theft citations. The second most common labor law complaints pertain to vacation and overtime payments.
  • Employee Misclassification: Employers sometimes misclassify workers to avoid providing benefits or paying taxes. According to a 2018 report from the US Department of Labor (DOL), a significant number of employers in Colorado, specifically 33.9%, misclassified their employees as independent contractors.
  • Workplace Injury Claims: Employers must provide a safe working environment and compensate employees for work-related injuries. Unfortunately, some employers still neglect safety measures to prioritize productivity or reduce expenses Colorado has an average of 112 work-related deaths annually, meaning approximately one work-related fatality every three to four days. Additionally, thousands of individuals are injured due to work-related incidents each year.

Penalties for Breaking Colorado Labor Laws

Colorado Anti-Discrimination Act (CADA)

The Colorado Anti-Discrimination Act prohibits employers from discriminating against employees based on various factors such as disability, race, color, sex, sexual orientation, religion, age, national origin, or ancestry. This law applies to all Colorado employers, regardless of their size.

There have been several amendments to CADA over the years in an effort to curb workplace discrimination as well as reflect the morals and values of the society we live in. The most recent amendment in 2022 extended the time limit for filing a charge with the Colorado Civil Rights Division (CCRD). Instead of 180 days, complainants now have 300 days from the occurrence of the alleged discrimination to file a charge. The amendment also expanded the definition of employee to include domestic service workers.

Penalty for Violation

The potential attorney fees in a CADA case can be significant, increasing employers’ liability if they lose. Additionally, the court can now award punitive damages ranging from $10,000 to $25,000 based on company size. For larger organizations with more than 500 employees, there is a lot at stake with fines going up to $300,000.

Colorado Minimum Wage Laws

Colorado has two types of minimum wage rules: a statewide minimum wage and a local minimum wage applicable only in Denver, its capital city. The state’s minimum wage, set by the Colorado Overtime and Minimum Pay Standards Order (COMPS), is $14.42 per hour for nonexempt employees. This minimum wage increases annually based on the Consumer Price Index for Colorado residents. Tipped workers in Colorado, on the other hand, can be paid a lower minimum wage of  $11.40 per hour if they receive at least $30 in monthly tips.

In Denver, the minimum wage for non-tipped employees is at a higher $18.29 per hour. It’s important to note that Denver companies cannot use the state’s minimum wage to calculate pay rates. Tipped workers in Denver also have a higher minimum wage rate of $15.27 per hour compared to the state requirement.

Penalty for Violation

Theft of wages, which includes failure to pay minimum wage, is considered a felony when the amount stolen exceeds $2,000. Refusing to pay owed wages with the intent to coerce is also classified as wage theft. The act eliminates the exemption from criminal penalties for employers facing financial limitations due to bankruptcy or other court actions restricting their control over assets.

FLSA Overtime Laws

Colorado’s overtime law closely follows the federal Fair Labor Standards Act (FLSA).

FLSA regulates time management, wage rates, and overtime pay. It requires accurate recordkeeping of employee working hours. As per FLSA, overtime pay is 1.5 times the regular hourly rate for those working over 40 hours per week. Some job categories may be exempt from overtime pay based on their job description and salary.

Learn more about Colorado Overtime Laws in our detailed guide.

Penalty for Violation

Employers exhibiting intentional or recurrent disregard for the established overtime pay provisions dictated by the Fair Labor Standards Act (FLSA) may incur a civil monetary penalty reaching up to $1,000 for each instance of noncompliance.

Family and Medical Leave Act (FMLA)

The FMLA provides eligible employees with unpaid, job-protected leave for specific family and medical reasons. Eligible employees can take up to 480 hours of family medical leave (FML) within a defined 12-month period. They may also be eligible for an additional 40 hours of state family medical leave after using their FML.

  • FML and state family medical leave can be taken for the following reasons:
  • Birth of a child (within one year of birth)
  • Placement and care of an adopted or foster child (within one year of placement)
  • Serious health condition of a parent, child, spouse, or self
  • Employee’s own serious health condition
  • Active duty (military) family leave for a deployed member of the Armed Forces
  • Military caregivers leave for an injured or ill spouse, parent, child, or next of kin who served in the military.
Penalty for Violation

The Wage and Hour Division enforces the FMLA for employees in private, state, and local government sectors, as well as some federal employees. If violations cannot be resolved, the US Department of Labor may take legal action to ensure compliance. If the court rules in favor of the complainant, employers may be required to grant FMLA leave and provide monetary damages, including attorney fees and court costs.

Colorado Wage Transparency Act

The Colorado Wage Transparency Act, also known as the Equal Pay For Equal Work Act (EPEWA), promotes fairness and transparency in hiring and aims to reduce pay disparities based on protected characteristics. Enacted in 2019 and effective from January 1, 2021, it is considered one of the most comprehensive in the country.

The law applies to any entity employing at least one worker in Colorado. It encompasses five main components: equal pay for equal work, transparent pay scales, prohibition of salary history inquiries, protection for discussing wages without retaliation, and recordkeeping requirements.

The Colorado pay transparency law mandates that employers:

  • Include compensation information (hourly, salary, or range) in job postings.
  • Provide a general description of benefits and additional compensation.
  • Make reasonable efforts to notify current employees about promotion opportunities.
  • Disclose comprehensive compensation details (including healthcare benefits, retirement, paid time off, etc.) in job postings.
  • Share a salary range with applicants when offering compensation, even if not explicitly requested.
Penalty for Violation

Employers not providing required notice of promotions or pay range for open positions may face fines ranging from $500 to $10,000 per violation. But if an employer corrects their postings after the initial violation, all fines will be waived by the Department in charge.

Colorado Whistleblower Protection Laws

In Colorado, employees, both in the public and private sectors, are safeguarded against negative consequences resulting from reporting illegal activities, unethical conduct, or violations of public interest. This protection applies as long as the employee acts in good faith, regardless of the accuracy of the disclosed information, and refrains from disclosing confidential data. Unlike federal laws that typically protect only traditional employees, Colorado’s whistleblower laws offer broader coverage by including independent contractors.

Employers are prohibited from taking adverse actions against employees who report violations of state or federal laws, rules, or regulations. Adverse actions may include termination, demotion, suspension, harassment, or any form of discrimination.

Penalty for Violation

Suppose a worker successfully takes action against their employer under this law. In that case, they may seek remedies such as reinstatement, lost pay (a minimum of $10,000), compensatory damages for emotional distress or other losses, punitive damages, and attorney fees.

Similarly, the CFCA (Colorado False Claims Act) ensures that employees, contractors, or agents who experience retaliation or discrimination for engaging in protected conduct are entitled to appropriate relief. While the Colorado Attorney General’s Office enforces the CFCA, individuals also have the right to pursue private legal action.

Keep Jobs in Colorado Act

As of January 1, 2014, the Keep Jobs in Colorado Act mandates that a minimum of 80% of the work on a public works project in Colorado must be performed by local labor. This requirement applies to projects funded by the state, counties, school districts, or municipalities within the state.

The law, while controversial, aims to promote the inclusion of more Colorado businesses and workers in state contracts by limiting the outsourcing of public works projects like highway construction. It penalizes employers who fail to hire local workers or use foreign-made materials.

Under this law, companies are penalized if less than 80% of their workforce consists of Colorado labor. Additionally, contractors must disclose the origin of materials like iron and steel used in projects to encourage the use of locally produced materials. The Departments of Labor and Employment and Personal and Administration enforce this law.

Penalty for Violation

If the Division finds a contractor knowingly violating the law after an investigation, fines will be imposed as follows:

  • First violation: $5,000 or 1% of the contract cost, whichever is less.
  • Second violation: $10,000 or 1% of the contract cost, whichever is less.
  • Third violation or more: $25,000 or 1% of the contract cost, whichever is less.

If a contractor receives three fines within five years and the violations are severe, the Division may initiate contractor debarring. The Division has the discretion to dismiss a complaint if it determines that minor paperwork violations caused the circumstances leading to the complaint.

Colorado Youth Employment Opportunity Act (CYEOA)

According to the Colorado Youth Employment Opportunity Act (CYEOA), a minor is defined as someone under eighteen years old unless they have a high school diploma or have passed the general educational development examination.

There are several restrictions stated under CYEOA; this includes the number of hours a minor is permitted to work in the state. For example, employers are prohibited from having minors work more than 40 hours per week or more than eight hours in a 24-hour period. As for individuals under 16, the restrictions include a maximum of three hours on a school day, eight hours on a non-school day, and a total of 18 hours during a school week.

Minorities are also not allowed to take on occupations deemed hazardous by CYEOA. These occupations include:

  • Operating high-pressure steam boilers or high-temperature water boilers.
  • Working at heights of ten feet or more above the ground, except for agricultural work up to twenty feet.
  • Handling, transporting, or storing explosives.
  • Engaging in mining, logging, oil drilling, or quarrying.
  • Working with radioactive substances or ionizing radiation.
  • Any other power-driven machinery considered hazardous by the Director.
  • Participating in livestock slaughter, rendering, or meat packaging.
Penalty for Violation

Anyone who allows a minor under the age of eighteen to be employed in violation of this law is guilty of a misdemeanor. They may be fined between twenty and one hundred dollars per offense upon conviction.

Similarly, any person, firm, corporation, or their representatives who knowingly violate or fail to comply with this law may also be charged with a misdemeanor. The fine for such offenses ranges from twenty to one hundred dollars. Repeated offenses may lead to increased penalties.

Colorado OSHA Laws

Colorado follows federal OSHA regulations, which apply to the majority of private-sector workers in the state. This aims to ensure the safety and health of workers by setting standards, enforcing regulations, offering training and education, fostering partnerships, and promoting ongoing improvements in workplace safety and health.

Employers in Colorado have important responsibilities under the Occupational Safety and Health Act (OSHA) to maintain a safe work environment. This includes providing employees with free personal protective equipment (PPE), such as safety glasses, gloves, helmets, and respirators. Employers must also ensure that tools and equipment are well-maintained and meet safety standards.

Penalty for Violation

The penalties for violating OSHA regulations in Colorado vary on the the gravity of the violation. Here’s a table to summarize the different types of OSHA violations and their corresponding penalties:

Type of Violation Penalty Minimum Penalty Maximum
Serious [$975] per violation $13,653 per violation
Other-Than-Serious $0 per violation $13,653 per violation
Willful or Repeated [$9,753*] per violation $136,532 per violation
Posting Requirements $0 per violation $13,653 per violation
Failure to Abate N/A $13,653 per day unabated beyond the abatement date [generally limited to 30 days maximum]

How to Avoid Violating Colorado Labor Laws

Tip #1 Stay informed with the key Colorado labor laws.

Keeping yourself updated with the essential Colorado labor laws is crucial. Laws can change, and it’s important to be aware of any updates or revisions that apply to your business. Stay connected with reliable sources, such as the Colorado Department of Labor and Employment, to ensure you’re well informed about the current regulations.

Tip #2 Set clear company policies.

Having clear and well-defined company policies is beneficial for both you and your employees. Clearly communicate your expectations regarding work hours, breaks, leaves, safety regulations, and any other important aspects of the job. Ensure that these policies align with Colorado labor laws and are easily accessible to all employees.

Tip #3 Promote clear and effective communication.

Open lines of communication between you and your employees are vital. Encourage your employees to share their concerns, questions, or complaints related to their working conditions or employment rights. Foster a culture where employees feel comfortable discussing these matters, and address any issues promptly and fairly. You want to resolve any employee complaints before they bubble up into court trials.

Tip #4 Maintain accurate recordkeeping.

Accurate recordkeeping can benefit your business in more ways than one. It can help you comply with state recordkeeping regulations and ensure you pay your employees accurately for all the hours they’ve worked. 

Proper recordkeeping also enables better assessment of employee performance. By tracking attendance, productivity, and project completion, you can provide feedback, recognize top performers, and identify areas for additional support or training.

Time-tracking software is one of the best ways to keep accurate records. These tools eliminate the need for manual timekeeping, reducing the chances of human error. They can save you a ton of time and a ton of trouble!

Tip #5 Pay attention to minimum wage and overtime regulations.

Colorado has specific minimum wage and overtime regulations that you must adhere to. Stay informed about the current minimum wage rate, which can vary depending on factors like location and industry. Ensure you pay your employees at least the minimum wage and provide overtime compensation as required by law. Failure to do so can lead to costly legal consequences.

Tip #6 Seek legal guidance when needed.

Labor laws can be complex, and it’s always wise to seek legal guidance when necessary. If you have questions or concerns about specific labor law requirements or if you’re unsure about any aspect of compliance, consult with an employment attorney or a human resource professional. They can provide you with accurate and personalized advice tailored to your business.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.

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