2024 brought changes to Colorado and Federal employment and business law. The Patricia S. Bellac Law Firm remains committed to supporting employees and employers in resolving workplace and benefits issues. We will assist clients as they navigate complex employment arrangements and will resolve noncompete issues, and look forward to serving the needs of our clients now and in the future. – PSB

2025 Colorado Wage and Hour Updates, Key Exemptions Changed

Colorado wage and hour laws provide new standards each year, for minimum wage, salary basis, and other thresholds. The Federal Fair Labor Standards Act (FLSA) set a baseline, while Colorado law provides additional protections. In 2025, minimum wage in Colorado is $14.81 per hour for non-tipped employees and $11.79 per hour for tipped employees. Several Colorado jurisdictions, have ordinances that require a higher minimum wage in 2025, including:

Boulder’s minimum wage is $15.57 per hour; tipped employees, $12.55.
Denver City and County the minimum wage is $18.81 per hour for non-tipped employees; tipped employees are at $15.79 per hour.

Colorado imposes a higher salary threshold than Federal, for executive, administrative, and professional employees to qualify as exempt from overtime pay, employees must make at least $1,086.25 per week ($56,485 annually).

In 2022, Governor Polis signed HB 22-1317 which significantly limited “the enforceability of non-compete agreements executed after August 10, 2022”. The key metric on whether such an agreement is enforceable is if an individual is a highly compensated employee or not. Highly Compensated Employees are those who earn at least $127,091 annually in 2025.

Colorado law requires overtime pay at 1.5 times the regular rate for non-exempt employees who work more than 40 hours per week, 12 hours per day, or 12 consecutive hours. Recent updates include the Colorado Overtime and Minimum Pay Standards Order (COMPS Order) #39, effective January 1, 2024, which defines “time worked” to include pre- and post-shift tasks that benefit the employer, and the Job Application Fairness Act (JAFA), effective July 1, 2024, which prohibits employers from requesting age-related information on job applications.

On April 26, 2024, the United States Department of Labor (DOL) announced updates to the Fair Labor Standards Act (FSLA) that significantly expanded overtime eligibility by raising the salary threshold for exempt employees. And in Hamilton v. Amazon.com Services LLC, the Colorado Supreme Court ruled that holiday incentive pay must be included in the regular rate for overtime calculations, a departure from federal law and a critical consideration for Colorado employers.

Recent additional measures include the Family and Medical Leave Insurance (FAMLI) program, which provides eligible employees with up to 12 weeks of paid leave, and the Equal Pay for Equal Work Act (CEPEWA), which requires salary range disclosure in job postings and notification of internal promotion opportunities.

Contact Patricia S. Bellac Law Firm today to discuss your legal needs with our attorneys in Boulder, CO. We have decades of experience handling noncompete agreements, overtime disputes, FAMLI and other job-leave programs, and more.

Patricia Bellac Named Super Lawyer for the Sixth Year in a Row!

The PSB Law Firm proudly announces that our managing attorney, Patricia Bellac, has been recognized as a Super Lawyer for 2025, for her outstanding service in the areas of Employment and Business Law. This is her sixth year in a row receiving this title, and 10th overall. Way to go Patricia!

United States Supreme Court Building with columns and a statue

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Supreme Court in Review

Groff v. DeJoy: the Supreme Court held that, under Title VII of the Civil Rights Act of 1964, an employer must show that burden of religious accommodation “is substantial in the overall context of an employer’s business” a higher burden than “more than de "minimus cost,” to establish that a proposed reasonable accommodation is an undue hardship.
Murray v. UBS Securities, LLC: The Supreme Court held that a whistleblower does not have to establish that the employer acted with retaliation, only that the protected activity contributed to adverse employment action, potentially encouraging more reports of wrongdoing.
E.M.D. Sales, Inc. v. Carrera: The Supreme Court ruled that employers can use the preponderance standard to prove FLSA exemptions, reversing an appellate court ruling, this could possibly lead to more sales professionals being classified as exempt.
Muldrow v. City of St. Louis: The Supreme Court clarified the burden of proof to establish a discriminatory adverse employment transfer, namely that an employee only need to show “some injury” that made them “worse off” than before, not that the transfer was a “materially significant disadvantage.”

New Test for Determining Employee vs Independent Contractor FLSA (29 CFR 795.110)

This new test was effective March 11, 2024, and it is a six-factor test replacing the two-factor test that started in 2021. The goal is that this new test will reduce the risk that employees are misclassified and provide greater consistency for businesses. The new factors include:

Opportunity for profit or loss depending on managerial skill: If a worker has no opportunity for a profit or loss, then this factor suggests that the worker is an employee.
Investments by the worker and the employer: Investments that are capital or entrepreneurial in nature indicate an independent contractor
Permanence of the work relationship:The worker is an independent contractor when the work relationship is defined in duration, non-exclusive, project-based, or sporadic. However, if there are operational characteristics such as seasonality this factor is not indicative of independent contractor status.
Nature and degree of control: Whether the employer sets the worker's schedule, supervises the work performance, and explicitly limits the worker's ability to work for others. Less control exercised by employer means more likely independent contractor.
Extent to whether the work performed is integral to the employer’s business: This factor weighs in favor of the worker being an employee when the work they perform is critical, necessary, or central to the potential employer's principal business.
Skill and initiative: If the worker uses specialized skills in connection with a business-like initiative that indicates that the worker is more likely an independent contractor.

The new rule advises that all six factors be considered based on the totality of the circumstances, no one factor has any predetermined weight.

Closing comments…

We hope this year brings prosperity, happiness, peace, and new opportunities for growth. Our purpose is to serve you, our clients, and support your needs now, and into the future. Wishing you all the best for 2025.

Sincerely,

PSB Law Firm