New Year, New Important Colorado Laws Now In Effect for Employers and Employees


By:  Emma Johnston

Happy New Year!  As with most new years, 2023 brings the start to some new Colorado laws that, as of January 1, are now in effect.  Here are some of the ones you should know about as either an employer or an employee:

Minimum Wage Increase: the statewide hourly minimum wage has now increased by $1.09.  It is now $13.65 for regular employees and $10.63 for tipped employees. In Denver, the only city to set its own minimum wage, the regular rate has increased to $17.29 an hour.

Paid Family Leave Deductions: The state is now collecting fees that will fund a new paid leave program—the Family Medical Leave Insurance (“FAMLI”) program—that, starting in 2024, will allow employees to take paid time off to, among other reasons, care for themself, a new child, or an ill loved one.

Employers and their employees are both responsible for funding the program and may split the cost 50/50. The premiums are set to 0.9% of the employee’s wage, with 0.45% paid by the employer and 0.45% paid by the employee.  Employers with nine or fewer employees are not required to contribute to the program but must still remit their employees’ share (0.45%) of the premium on behalf of their employees each quarter. This can be done through a simple payroll deduction.  Employers are required to begin these premium deductions on January 1, 2023.  Private businesses have the option of using an approved private plan that offers the same or greater benefits and protections as the FAMLI program.  Employers hoping to offer such a private plan must still pay the premiums until the FAMLI Division has reviewed and approved the private plan in accordance with the Division’s private plan regulations.

All employers, regardless potential exemption due to size or offering a private plan, are required to register with the FAMLI Division before the first premium payment is due at the end of the first quarter of 2023.

Wage Theft:  Several provisions of SB22-161, which sets restrictions on employers who dock ex-employees’ wages for materials the ex-employee may still have, went into effect on January 1.  Among these newly in-effect provisions is a requirement that within 10 days of employment ending, the employer must give notice to their former worker of any unreturned materials or money before that employer can deduct those costs from the worker’s compensation.  It also requires the employer to repay the worker if the missing materials are returned within a set time period.

The law also levies fines and other penalties on employers who violate the law or who don’t turn over requested materials to state authorities.  It also allows employees whose employer retaliated against them for taking part in a wage theft claim to file a civil action against their employer.

Tax Credits for Alternative Transportation: Private businesses, nonprofits, and local governments now have a new incentive to provide transit passes and other transportation options to their employees in 2023 under HB22-1026, a new law that replaces an older tax deduction.  The new deduction is more beneficial and easier to use for companies. Companies will now get a tax credit to cover up to half the cost of providing or subsidizing rideshares, bikes or e-bikes, bike/scooter rentals, and other options to employees.

Each company can collect up to $250,000, with a maximum of $2,000 per employee using the transportation options.  The tax credit is refundable, meaning that even companies without tax obligations can collect the benefit in cash instead.