Colorado Overtime Laws 2025: A Simple Guide for Employers

Understanding Colorado overtime laws can be complex because it includes regulations at the federal and state levels.

The FLSA provides a baseline for overtime pay across the United States: it implies that employees receive one and a half times their regular pay rate for hours worked beyond 40 in a workweek.

However, states can impose stricter requirements.

Colorado is one of such states: it has enacted laws to strengthen the rights of employees.

Below, there is a simple guide that:

• Presents the core components of Colorado overtime rules
• Separates the facts from the fictional chaff
• Breaks down the implications for the workforce within the state.

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Overtime Law Changes in 2025

Currently, Colorado overtime laws are governed by the Colorado Overtime and Minimum Pay Standards (COMPS) Order.

Under the law, most industries have to know about the new overtime requirements.

• Raised the breakpoint for paying exempt workers to the 2025 threshold, which is $56,485 annually ($1,086.25 per week)
• Employers began to look at how employees spent their time differently. As per the COMPS Order #39, taking effect Jan 1, 2024, and being carried forward into 2025, now 'time worked' includes cleaning up, security checks, or waiting for tasks before and after regular shifts.
• Agricultural employees are entitled to overtime pay after 48 hours in a week (or 56 hours at highly seasonal worksites)
• Hours worked over 12 in a single workday by a nonexempt employee must be paid at 1.5 times the usual hourly rate, as required by the COMPS Order, in addition to the federal requirement for working more than 40 hours in a week.
• It is required for all work done over at least 12 straight hours, even if the period goes across several calendar days.
• If an employee meets both daily and weekly overtime thresholds, the higher amount must be paid.
• A larger penalty for workers who are paid unfairly for overtime work. In particular, Colorado has increased enforcement on worker misclassification.

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Who Must Be Paid Overtime in Colorado

Covered Employees: The Non-Exempt Rule

In Colorado, employers must determine whether employees qualify as exempt or non-exempt based on their job duties, salary, and other factors, with non-exempt employees being eligible for overtime pay

Unless they are legally excluded, most private sector employees are included in the COMPS Order.

All hours worked over the basic 40 hours a week require 1.5 times the employee's regular salary.

Colorado has multiple overtime thresholds:

• Over 40 hours in a workweek
• Over 12 hours in a workday
• Over 12 consecutive hours, regardless of when the workday begins/ends.

Working hours under Colorado law cannot be averaged over several weeks by employers, and additional time off cannot be used instead of paid overtime.

Common Roles That Qualify: Beyond the Hourly Wage

If you just think overtime is meant for hourly workers, you might be missing out.

Most roles are not exempt from overtime and qualify for this, such as the following:

• Members of the administrative staff who generally take on office tasks, update records, or manage phone and mail communications.
• Customer service representatives, help desk staff, and assistants in support Teams.
• Hourly workers are made up of many trades and services.
• Technicians and delivery drivers (examples of field-based jobs) are generally not considered exempt, unless they are given outside sales exemptions.

Independent Contractors: A High-Stakes Distinction

Overtime pay is not provided to independent contractors. But making the wrong classification can be very risky for employers and is frequently the cause of wage disputes.

Colorado law expects that someone employed is an employee unless they fit the requirements to be considered an independent contractor.

What influences the decision are:

• Control: Can the employer dictate the methods, timing, and location of work? Employee relationships typically feature high levels of control.
• Core Business Function: Is the work essential to the main services the business provides?
• Profit/Loss Opportunity: Does the worker have the opportunity to earn profits or incur losses based on their own business decisions?
• Equipment and Materials: Does the worker provide their own tools, materials, and equipment for the job?

⚠️ Critical Tip: Salary Doesn't Automatically Disqualify
The most common misunderstanding is that a salaried employee does not have to work overtime. Even though most people think that having a salary is proof of exemption, it is only one factor. An employee will only be properly exempt if all the following are true:

• Holders of this position are afforded a stable annual income of at least $56,485 (the figure rises over time)
• Earn the qualifications needed for executive, administrative, professional, or other recognized exemptions
• Many employees earning mid-level salaries are overtime eligible because their duties don’t pass the test.

It means that employers must regularly check job descriptions and employee tasks to ensure everyone is classified correctly.

Overtime Rules in Colorado: When Does It Apply?

Overtime pay (which is 1.5 times their regular wage) is a requirement in Colorado whenever an employee works:

• More than 40 hours worked every week
• In excess of twelve hours worked each day
• Working more than 12 hours in a row, even if that crosses the boundaries of two workdays.

The “consecutive hours” rule may take employers by surprise since it exists only in Colorado.

It means workers could be entitled to overtime if they work for more than 12 hours over two workdays.

Real-World Example:

Susan is scheduled from 2:00 PM on Monday to 11:00 PM (9 hours) and must be at work again at 7:00 AM on Tuesday. Since she started the day before and worked straight through 12 hours by Tuesday afternoon, her job requires her to get paid overtime for the next few hours she works, as soon as she clocks back in after 5:00 PM.

Learning How to Determine Overtime Pay in Colorado

Employers in Colorado need to follow the process of overtime payments for their staff.

1. Regular Weekly Overtime
   Time worked more than 40 hours in a week x 1.5 x of regular hours
2. Daily Overtime
   Time worked from 12 onward in one day × 1.5 × regular rate
3. Working hours that follow each other beyond regular operation
   Working over 12 consecutive hours multiplied by 1.5 and the regular rate
   Each hour of overtime should be counted only once. If an hour is overtime according to several methods, it is only paid out as overtime once.

Figuring out the Regular Rate

All compensation made in a week is divided by the total number of hours worked to get the regular rate.

Total Compensation is divided by Total Hours Worked to get the Regular Rate

Among this total compensation are:

Hourly wages
Salaries for employees who aren’t exempt
Piece-rate earnings
Commissions
Non-discretionary bonuses
Shift differentials.

Calculation Examples

Example 1: Weekly and Daily Overtime
James worked the following schedule with a regular hourly rate of $20:

Monday: 10 hours
Tuesday: 14 hours
Wednesday: 8 hours
Thursday: 12 hours
Friday: 8 hours
Total weekly hours: 52

Weekly Overtime Calculation:

Hours over 40: 52 - 40 = 12 hours
Overtime pay: 12 hours × $20 × 1.5 = $360

Daily Overtime Calculation:

Tuesday: 14 - 12 = 2 hours over daily limit
Overtime pay: 2 hours × $20 × 1.5 = $60

Total Overtime Pay:

Since the weekly overtime calculation yields $360 and the daily overtime yields $60, the employer must pay the higher amount: $360 in overtime.

Example 2: Including Non-Discretionary Bonus
Sarah works 45 hours in a week at $18/hour and receives a $90 production bonus:

Base earnings: 45 hours × $18 = $810
Bonus: $90
Total compensation: $900

Regular Rate Calculation:

Regular rate: $900 ÷ 45 hours = $20/hour

Overtime Premium:

Overtime hours: 5 hours
Overtime premium: 5 hours × $20 × 0.5 = $50

Total Pay:

Base pay + bonus + overtime premium = $810 + $90 + $50 = $950

Things You Should Avoid

• Employers usually do not give enough attention to the consecutive hours rule, especially when an employee works across two workdays.
• Omitting bonuses or other compensation during regular rate calculation might result in receiving less than you are owed.
• Employers have to give the most overtime pay to employees using the proper method.

Who Is Exempt from Overtime Pay?

Exempt Roles: Executives, professionals, outside sales, and some tech workers.

Must meet both the salary threshold and the job duty test

✅ Use this as a quick check: Is the employee making under $55K/year AND doing non-managerial work? Then they’re likely non-exempt.

Required Breaks and Rest Periods

🍴Starting in 2025, non-exempt workers in Colorado are entitled by law to paid breaks.

After every four hours worked (or down to a two-hour increment), employees have the right to a paid 10-minute break. Employees should try to take their breaks within work time, not at the start or end of the day.

For shifts that go beyond five hours, employees are allowed a 30-minute break without being paid.

These meal breaks should be breaks from work with no chance for employers to intrude.

Therefore, employees should have no work tasks and can do their own activities during their breaks. Interruptions are forbidden, and if employees are tasked, the employer must reimburse the worker for that period as work time.

No Comp Time in Colorado (for Private Sector)

⚠️Comp time is allowed only in the public sector.

For Colorado’s private businesses, one main thing for wage and hour compliance is the ban on substituting comp time for overtime premiums.

Private sector employers are not allowed to offer additional days off; rather, they pay non-exempt employees 1.5 times their regular wages for all extra hours worked.

As a result, private organizations are not allowed to give employees a choice between working flexible hours and taking cash pay for their overtime, even if the employee wants "flex time."

Any bargain for lower wages violates the federal Fair Labor Standards Act (FLSA) and the Colorado Overtime and Minimum Wage Standards Order.

Failure to comply can cause the company to owe back wages, liquidated damages that add up to twice the owed wages, and cover the other party’s attorney costs.

Keep in mind: Don’t allow your employees in 2025 to receive paid time off instead of overtime wages. Set up strong time-tracking tools like TMetric for all non-exempt employees to check the hours they work and pay overtime on time. Not being aware of this requirement or choosing comp time over overtime pay does not excuse any violation.

Record-Keeping and Documentation Requirements

📝It is important for Colorado employers to keep good records to meet the state’s overtime rules and prevent expensive fines.

In 2025, Colorado expects documentation to meet strict and clear guidelines.

List of Important Time Records to Keep

All Colorado companies are expected to keep a log of and record essential labor information.

• An accurate schedule for each employee’s start and end times
• Hours worked every workday and every workweek
• Both paid and unpaid meal, snack, and rest breaks
• Hours worked that are higher than the standard 40 weekly/12 daily hours
• Pay for each shift you work per week, and any overtime hours.

Retention Requirements

• Colorado requires companies to keep all employment time records for a minimum of three years.
• The CDLE should be permitted to inspect the records immediately if they request to do so.
• There is a choice between digital and manual tracking methods.

Digital tools like TMetric for keeping track of work hours have many benefits for Colorado employers. Trackers offer:

• Automated overtime calculations using daily and weekly thresholds
• Meeting the requirements of the calculations of meal/rest breaks that Colorado has set
• A complete folder that meets the three-year storage norm
• Records of when and how data is changed
• A report section to complete CDLE checks.

Risks come with systems that are operated by hand.

🚨It has to be maintained regularly and frequently checked.
🚨Make it more likely for mistakes in calculation to happen
🚨Sometimes it has minimal or no security features in place.
🚨Usually misses the important task of tracking rest time.

Nota Bene: Because the law in Colorado defines overtime after 12 hours daily, TMetric's dedicated features can ensure compliance better than standard spreadsheets can.

Penalties and Legal Consequences for Non-Compliance

📛Any Colorado company found not to comply with the overtime law in 2025 will face serious financial and image issues.

There are other damages employees can get, in addition to being paid for all overtime hours lost.

If someone breaks Colorado employment laws intentionally, the fine could be treble the amount they did not pay.

Additionally, you can expect to pay for the attorney’s fees and costs related to going to court.

People in the workplace have a three-year window to raise willful violation claims, making an error now a future liability.

Not following Colorado's guidelines for overtime can result in large fees and hurt the trust between your staff and the company.

It's important to note that the federal law, known as the Fair Labor Standards Act (FLSA) applies to most employers with annual sales or revenue over $500,000, and both small and large employers can be required to comply with Colorado state law and regulations for overtime.

How Employees File Complaints

⚖️Employees in Colorado who notice their employer pays them differently than the hours they’ve worked can file a claim with CDLE and its DLSS.

Anonymous reporting is permitted and protected by law
Complaints can be filed online, by mail, or by phone
The CDLE will investigate all credible complaints, including anonymous ones

How Employees Can File a Complaint:

• Going face to face or communicating directly, if possible, is a practical first approach.
• They need to bring together pay stubs, timesheets, a contract, and letters or emails received from an employer about work hours or wages. This is very important when there are differences between the hours employees log and the hours they get paid for.
• The CDLE has a form available to use. If employees issue this letter and the employer does not pay within 14 days, extra charges may apply to them.
• Filling out a Labor Standards Complaint Form is the main way of making an official complaint to the CDLE. It can be submitted through the website or by sending it in print by mail or fax. The form includes writing a detailed description of the violation and estimating wages.

Common Complaint Triggers

Hours discrepancies: Differences between hours worked and hours paid
Overtime violations: Failure to pay required overtime
Meal/break violations: Requiring work during unpaid breaks
Misclassification: Incorrectly classifying employees to avoid overtime requirements

Employer Responsibilities During Investigations

Respond promptly to CDLE information requests
Provide accurate time and pay records when requested
Cooperate with investigators
Do not retaliate against complainants (prohibited by law)

Potential Penalties for Violations

Back pay for all unpaid wages and overtime
Penalties up to $100 per day per violation (COMPS Order 39)
12% annual interest on unpaid wages
Additional fines for violations or retaliation

Best Practices to Avoid Complaints

Maintain accurate time records for all employees
Ensure payroll systems correctly calculate overtime
Implement clear break policies
Train managers on overtime requirements
Regularly audit time and pay records
Establish a process for employees to report discrepancies internally.

Stay Compliant with Smart Time Tracking

⌛Using manual tracking to record time creates a major legal hazard as labor rules change.

Starting January 1, 2025, the minimum wage in Colorado will be $14.81, and non-exempt workers will earn 1.5 multiples of their standard rate for any time beyond 12 hours in a day or 40 hours each workweek.

All the time spent cleaning, setting everything up, doing security checks, and even on-duty meal times are counted.

Payroll errors, employee issues, and substantial penalties during audits often come from using manual methods, which make it easy to miss out on clock-ins, make mistakes, or not take breaks.

Failing to keep track of employees’ hours can result in problems and serious penalties.

💡Handling these complexities becomes much easier with TMetric as your support.

• It offers an accurate timekeeping system for regular and overtime work.
• It handles recording all employee hours so that you don’t go over the Colorado regulations for daily and weekly overtime.
• TMetric automatically lets managers know before anyone logs more than 12 hours in one day or more than 40 hours in one week. Thanks to this early flagging, there are no unexpected overtime hours and needed adjustments can be made promptly.
• In addition, TMetric generates complete, ready-to-use payroll reports showing all worked and overtime hours, ensuring you remain compliant with COMPS and make payroll easier in 2025 and going forward.