2024 Colorado Labor & Employment Year End Review

Denver, Colo. (February 19, 2025) - Another year of active legislation and agency rulemaking has resulted in new and continuing developments that make Colorado a challenging jurisdiction for employers. Here, we detail the most significant developments.

Changes Effective in 2025

Overtime and Minimum Pay Standards Increases

• Minimum Wage Increases: Effective January 1, 2025, the Colorado minimum wage increased to $14.81 per hour. The minimum wage in the City and County of Denver increased to $18.81 per hour. Employers operating in the City of Boulder, unincorporated Boulder County, and the City of Edgewater should also note the local minimum wages and annual increases.
   
• Increased Exempt Employee Salary Thresholds: Colorado differs from federal law and requires a higher salary threshold for certain executive, administrative, and professional (EAP) employees to be exempt from overtime pay requirements. The salary thresholds are adjusted annually each year and are published in Colorado’s Publication and Yearly Calculation of Adjusted Labor Compensation (PAY CALC Order). In 2025, Colorado employees must earn gross wages of at least $1,086.25 weekly ($56,485 annually) to potentially qualify for one of the EAP exemptions (in addition to satisfying the applicable job duties test). Colorado also raised the salary threshold for the highly compensated employee exemption. In 2025, employees must earn gross wages of $127,091 annually, as well as the weekly salary for the EAP exemptions.

Employers should ensure that their employees meet these minimum pay standards.

Increases to Restrictive Covenant Income Thresholds

In August 2022, Colorado enacted legislation which significantly limited an employer’s ability to use restrictive covenants such as non-competition and non-solicitation provisions. The legislation also imposed new requirements on the use of confidentiality agreements. In addition to certain reasonableness requirements, such agreements are invalid unless : (i) the employer provides advance written notice to the employee of the restrictive covenant in a separate, stand-alone notice; and (ii) the employee meets certain income thresholds requirements based on the highly compensated worker exemption both at the time the agreement is entered into as well as when it is enforced. The increase to Colorado’s highly compensated employee salary threshold discussed above therefore impacts the enforceability of non-solicitation and non-competition provisions. For 2025, the new salary thresholds required for non-solicitation and non-compete agreements are $76,254.60 and $127,091, respectively. Lewis Brisbois is monitoring pending legislation which seeks to prohibit non-competition and non-solicitation agreements for employees practicing medicine, advanced practice registered nursing, or dentistry.   

Amendments to Colorado Family and Medical Leave Insurance (FAMLI) Program Rules

Colorado’s Family and Medical Leave Insurance (FAMLI) program is entering its second year of providing income replacement benefits. In 2025, the maximum weekly benefit is set to 90% of the Colorado State Average Weekly Wage (SAWW). The maximum weekly benefit amount for new claims filed after January 1, 2025, has increased to $1,324.21. The annual adjustment will then occur every July 1 when the state updates its SAWW. Accordingly, another change to the maximum weekly benefit amount may occur this July. Claimants also will now have the option to have federal income tax withheld from their FAMLI benefits. The Colorado Department of Labor and Employment Division of Family and Medical Leave Insurance (Division) recently revised and adopted additional regulations governing the FAMLI Program, effective January 1, 2025. Among other things, the regulations:

• Establish additional procedures and compliance requirements for employers providing equivalent insurance through private plans;
   
• Provide fines against employers who fail to: (1) adequately and timely notify employees about private coverage plans or material changes to or termination of a private plan; (2) provide the Division with requested plan information; or (3) notify the Division of any benefit overpayment;
   
• Establish additional procedures and requirements for third party administrators and payroll providers who register multiple employer accounts; and,
   
• Obligate employment agencies and their clients to maintain records and comply with the anti-retaliation and anti-interference provisions of the Act.

Employers should confirm that they, any employment agencies, and third-party administrators understand their FAMLI Program responsibilities.

The Division also enacted additional regulations for investigating and correcting violations of the FAMLI Act. For example, the regulations:

• Define interference with an employee’s rights under the FAMLI Act to include: (1) failure to cooperate with compliance activities; and (2) requiring an individual to work during a period of paid family and medical leave;
   
• Provide that an employer takes an unlawful adverse action when motivated in whole or in part by the employee’s use of protected leave;
   
• Allow an employer to offer a “same decision” defense barring a damages award when the employer took an adverse action against an employee who took protected leave; and,
   
• Establish additional procedures for Division investigations—such as written determinations and appeal or reconsideration procedures—and employers’ participation in the investigation.

New Notice and Consent Obligations under the Colorado Privacy Act

In December 2024, the Coloardo Attorney General’s office adopted new rules governing the Colorado Privacy Act that, among other things, require employers to provide employees with detailed notice about the collection, storage, and use of biometric data—such as fingerprints, retina or iris scans, and facial and voice recognition—and obtain employee consent before collecting employees’ biometric data. The notice need not be stand-alone, but may be included in a general privacy notice if the relevant information is easily accessible. These rules go into effect on July 1, 2025. Employers collecting, using, or storing employee biometric data should prepare to update their privacy notices and obtain employee consent as necessary.

Other Significant Developments from 2024

Employers should also take note of several continuing developments from 2024.

Job Application Fairness Act Prohibits Age-Related Inquiries in Hiring

The Job Application Fairness Act, which prohibits age-related inquiries on an initial employment application, took effect on July 1, 2024. The Act prohibits inquiries regarding an applicant’s: (i) age; (ii) date of birth; (iii) dates of attendance at, or date of graduation from, an educational institution; and (iv) any other inquiries that inadvertently or otherwise require disclosure of an applicant’s age. As covered in depth by our July 1, 2024 Legal Update, employers should ensure compliance with these and other Colorado laws that impose restrictions on the pre-employment screening and hiring process.

Retaliation Against Organ Donors Prohibited

Effective June 2024, the Colorado legislature enacted the Care for Living Donors Act that, among other things, prohibits discrimination and retaliation against living organ donors. Further, the Act creates a rebuttable presumption of retaliation if an employer takes an adverse employment action against an employee donor within 30 days before or 90 days after an organ donation recovery operation. We recommend updating policies and handbooks to prohibit retaliation against organ donors.

Crown Act Amended to Include Hair Length

Effective June 2024, the legislature added a prohibition on discrimination based on hair length to the Crown Act, which also prohibits discrimination based on hair textures, types or styles commonly or historically associated with race. 

Equal Pay Act Transparency Requirements

The Colorado Equal Pay for Equal Work Act (EPEWA) took effect in 2021 and generally requires employees performing similar job duties to be paid the same wage rate regardless of sex. Part 2 of the EPEWA imposes certain pay transparency requirements in job postings and mandates certain internal employee notices. Amendments to Part 2 of the EPEWA took effect on January 1, 2024, and clarify what triggers the required notice of “job opportunities” and added a requirement to include application deadlines in job postings. Evergreen postings are excluded from the application deadline requirement if the posting states there is no deadline because the employer accepts applications on an ongoing basis. The amendments also added a new requirement to provide post-selection notices to existing employees that will work regularly with the new hire. The post-section notice must be provided within 30 days of the new hire and include the following:

• Name of the candidate selected for the job opportunity;
   
• The selected candidate’s former job title if selected while already employed by the employer;
   
• The selected candidate’s new job title;
   
• Information on how employees may demonstrate interest in the similar future opportunities and to whom they can express this interest;

Employers should review their internal and external job posting policies and employee notices to ensure compliance. 

Anticipated Case Law Developments

We continue to monitor the trial and appellate courts’ interpretation and application of significant legal developments in Colorado law. Among other things, we await guidance interpreting:

• The 2022 amendments to the Colorado statute limiting the enforceability of restrictive covenants, such as non-competition agreements, in employment contracts.
   
• The 2023 POWR Act’s elimination of the “severe or pervasive” standard for unlawful harassment and more rigorous accommodation requirements for disabled employees.

For more information on these new laws, contact the authors or editor of this alert. Visit our Labor & Employment Practice page for additional alerts in this area.

Authors:

Kate Svinarich, Associate

Jeffrey McClelland, Partner

Editor:

Diane L. Waters, Partner and Vice-Chair of Employment Advice & Counseling Practice