The Essentials of Paid Time Off in Colorado

The Basics of Colorado PTO Regulations

The general framework of Colorado’s paid time off laws provides for tax-free sick leave, vacation, and personal paid time off (collectively "PTO"). Under Colorado law, these PTO types can be defined in an employer’s policies and are subject to different legal requirements. Aging or unused PTO is subject to different requirements depending on its type.
Generally, Colorado permits employers to establish rules for employees’ eligibility to accrue certain days as PTO and use of those days. While Colorado is generally an "employment at will" state, with respect to PTO, once an employer has established a policy for accruing and/or using PTO that policy applies throughout the employment relationship.
PTO does not need to be paid out at termination unless the employer’s policy requires it. If the employer does not inform the employee of its policy , under Colorado’s Wage Order 32, accrued PTO must be paid upon termination from employment. This is somewhat contrary to other states’ laws, such as California.
The State of Colorado does not require private employers to provide PTO. If an employer does so, then Colorado law comes into play. Colorado has only one paid leave law, which is a small period of sick leave for employees working in the City of Boulder, Colorado.
Neither the federal regulations nor Colorado’s minimum wage laws prevent a private employer from providing paid PTO to its employees. This allows private employers to meet the federal and Colorado labor laws mandating minimum wage pay and prevent wage theft liability concerns.

The Colorado Healthy Families and Workplaces Act

The Colorado Healthy Families and Workplaces Act requires employers to provide paid sick leave to eligible employees. Paid sick leave may be used for the following reasons: Under the Healthy Families and Workplaces Act, an eligible employee must be compensated at their standard rate of pay (or the applicable minimum wage, whichever is greater) for their paid sick leave, and the paid sick leave cannot exceed twelve (12) days, or the equivalent of 96 hours, annually. Generally, an employee must earn paid sick leave over the course of their employment with the employer, and the paid sick leave is not paid out to the employee upon termination. Additionally, employers in Colorado may be subject to local ordinances that require paid sick leave. Employers should adopt a policy to inform employees of their rights under the Healthy Families and Workplaces Act, and how to report the need to use paid sick leave to their employer.

Ways in Which Paid Leave is Earned and Used

A. Paid Leave Accrual
Employees in Colorado covered by the statute accrue payed leave for:

– Every 30 hours worked performed.
– Earned at a minimum of one hour per every 30 hours worked. For employees who are exempt from federal overtime requirements, the following formula will determine paid leave accrual: Paid leave is based on the 40-hour workweek calculated as follows: 40 hours divided by 168 hours (the work hours in a year), multiplied by eight hours (the average hours worked per day). (See § 8-13.5-101(6)(d)(III)).

The paid leave must be accrued at the same rate for both full-time and part-time employees, although employers are permitted to limit the amount of paid leave that an employee may use in each 12-month period of time.
B. Accrual Start Date
An employee will begin to accrue paid leave starting from the commencement of his or her employment.
C. Accrued Unused Leave
Employees can use accrued leave for the purpose of sick, safe, or family leave.
D. Reasonable Use
Employers can set reasonable workplace rules related to the use of paid leave, and can require employees who need to use paid leave to make requirements. However, employers cannot harass employees related to their use of paid leave or require employees to find a replacement to cover their shift (unless coverage is required by established policy).
E. Retaliation
While an employer is permitted to discipline an employee for failing to comply with workplace rules (or with an employer’s policy established before the commencement of an employee’s work), an employer is prohibited from retaliating against an employee who uses or requests paid leave.
F. Medical Professional Certification
An employer may not deny an employee the use of paid leave during an otherwise paid time off due to the illness or injury of others, and employers can require notice when the paid leave is being used for the illness or injury of others.

Employers’ Responsibilities and Compliance

Employers must comply with specific obligations under Colorado paid time off laws, including maintaining records of employee accrual, use and payment of paid time off (if applicable) in compliance with the statute and any employer policies. Pursuant to the Colorado Wage Order 35, Colorado employers are required to maintain accurate records of all hours worked by employees and all deductions made from wages. Employers must also keep all personnel files for a period of two years from when represented employees leave or are discharged from employment with the employer. Colorado Wage Order 35 states that an employer must "make and keep for a period of at least two years records showing" the following:
Employers in Colorado are required to provide notice to employees of their rights under the Colorado Paid Sick leave law. Colorado Paid Sick Leave requires employers to post a notice on employees’ rights to paid sick leave for workplace accidents and their recovery. Any client in Colorado should be giving their employees a copy of Colorado Paid Sick Leave. This document should be referenced along with the employment policy that is given to all employees. Additionally, the document is available through the Colorado Department of Labor’s website.
For non-compliance with the Colorado Sick Leave laws, the following fines and penalties are available to an employee of the Division of Labor Standards and Statistics, or other authorized agent of the Division:
Any employee of the Division of Labor Standards and Statistics may file a written complaint for non-compliance to the Colorado Paid Sick Leave section. The complaint may be made verbally, or in writing. In order to file the complaint, the employee must make a claim within one (1) year following the date(s) the alleged violations occurred. The claim must contain the following information:
An employee may not be discharged, threatened, or otherwise coerced for participating in a paid sick leave investigation by the director for Colorado Wage Order 35. Upon receiving a written complaint regarding an alleged violation of the Paid Sick Leave section, the Director shall investigate said claims in a timely manner. The Director has the right to do any of the following during an investigation:
The Colorado Wage Order 35 clearly outlines all employer responsibilities and obligations, and employers must comply fully with all requirements under the statute to avoid possible civil fines and liability.

What was Added or Amended Recently

In the 2021 session, the Colorado legislature passed House Bill (HB) 21-1248, which amended the state’s previously-enacted Family Caregiver Act (FCA) to provide paid leave for eligible family caregivers of terminally ill individuals. The bill broadened the FCA to grant leave for up to five days to an employee to care for a person with a "terminal illness who has a chronic progressive disease or condition that is incurable and irreversible."
Given the state of COVID, the legislature further expanded the FCA in 2022 . HB 22-1341 amended it to authorize paid leave under the law not only to care for a terminally ill family member, but also to care for a family member with any illness, injury, medical condition, health issue, or functional limitation that can result in significant loss of quality of life. House Bill 22-1341 provides that employees can be paid while taking time off to assist their family members with basic services necessary for daily living and health related activities.
Employees who have accrued paid sick leave provide needed support for family members. However, employers are not required to provide paid sick leave under Colorado law. Therefore, there may be confusion as to what those rights are or how to obtain paid sick leave.

The Effect on Workers and Companies

Paid Time Off Laws can provide significant benefits to employees. Sick leave coverage, for instance, fosters an environment where employees are not penalized for taking time off for legitimate medical reasons. Additionally, paid sick leave allows employees to tend to the healthcare and caretaking needs of their loved ones, also without penalty. Lastly, whereas many companies provide vacations or PTO that must be used (or lose them), paid sick leave can be accumulated and banked for future use rather than a use-it-or-lose-it approach.
Though intended to increase workplace morale among employees, Colorado’s paid time off laws may present challenges for adhering employers. Some larger employers, in particular, may struggle with ensuring compliance with the relevant laws as they vary by jurisdiction, and can be difficult to manage. Further, if adherent employers struggle with compliance, that could impact the overall morale of the workplace if they are not perceived as treating employees fairly.
Employers should analyze their benefit offerings and work to ensure compliance with paid time off requirements of the ten jurisdictions listed above.

Commonly Asked Questions

The Colorado Department of Labor and Employment (CDLE) administers the state paid time off laws. The CDLE is authorized to issue frequent advisories that clarify or expand upon these laws as well as employee rights and remedies. These advisories are all available on the CDLE website.
Q: When am I eligible to take paid leave concerning my own or a family member’s health?
A: An eligible employee is entitled to up to 12 weeks of accrued, protected paid sick, safe or family leave depending on the type of leave requested. Eligible employees are entitled to such leave time when they work for an employer with a paid leave policy who has met the following criteria:
• Employees accrue paid leave time;
• Employees are entitled to reinstate accrued paid leave upon return to work from any leave; and
• Use of the paid leave time is accrued, guaranteed, protected and limited to an amount that is no less than the amount of leave required under the act.
Q: Does paid leave actuate in the same manner as wage payments for part-time employees?
A: No. Annually , an eligible employee’s paid leave is accrued based on the hours worked. Thus, the amount of time an employee receives each pay period depends on the number of hours that employee works, not the hours that employee is scheduled to work. For example, an employee who typically works 40 hours per week and regularly receives 4 hours of paid leave per pay period will only accrue paid leave for the hours they actually work. A part-time employee who typically works 20 hours per week will receive 2 hours of paid leave per pay period.
Q: What happens if I am terminated or retired?
A: Subject to the terms and conditions of an employee’s employer-specific paid leave policy, if the employee is disenfranchised from his or her employment, the employer must either (1) pay the employee for any accrued and unused paid leave at their base rate of pay upon termination; or (2) reinstate the accrued paid leave upon rehire (within 6 months of the leave).