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How to Hire Employees In Colorado

Hiring in Colorado for the first time can be challenging, especially with the state's complex employment laws. Whether you're hiring independent contractors, setting up a legal entity, partnering with a PEO, or using an Employer of Record (EOR), it's essential to understand the local employment landscape. Playroll's comprehensive guide is here to help, whether you're onboarding local talent or relocating team members.

Here are four primary ways companies can hire employees in Colorado:

Establishing a local entity: Creating a legal entity in Colorado allows for direct hiring, but it can be costly and time-consuming. However, it gives you full control over employment and reduces risk exposure.
Partnering with an Employer of Record (EOR): An EOR, like Playroll, takes on the legal responsibilities of employment, acting as the employer on your behalf. This option streamlines hiring, payroll, and compliance with Colorado’s labor laws, helping you hire in Colorado without navigating the complex legal landscape yourself.
Working with a Professional Employer Organization (PEO): A PEO, such as Playroll, co-employs your team, managing essential HR functions like payroll, benefits, and compliance. Partnering with a PEO ensures you meet Colorado’s labor regulations while offering competitive employee benefits.
Hiring independent contractors: Hiring independent contractors can be more cost-effective, but Colorado has strict contractor classification rules. Proper classification is essential to avoid penalties for misclassification when hiring in Colorado.

Complying with Colorado specific employment regulations and federal laws is critical to avoiding legal risks and costly fines. Our guide focuses on hiring in Colorado, employment compliance, and how Playroll’s services can support your business as you navigate the complexities of hiring in the state.

Good To Know

Colorado has a skilled and diverse workforce, especially strong in technology, healthcare, and finance.

The state’s central time zone allows easy collaboration with teams across the U.S.

Colorado offers a lower cost of living than major coastal cities, making it attractive for top talent.

Key Things to Know About Hiring in Colorado

Do I need an EIN or Payroll Tax Number to Employ in Colorado?

Yes, to employ in Colorado, you need both a Federal Employer Identification Number (EIN) and a Colorado Payroll Tax Account Number.

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Working Hours in Colorado

40-hour work week. 8 hours per day for 5 days.

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What is considered full-time employment in Colorado?

In Colorado, full-time employment is generally considered to be working 30 to 40 hours per week, though there is no specific state law defining full-time hours.

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Probation Period in Colorado

There is no state-mandated probation period for new employees, but many employers implement one as a company policy.

Labour Laws in Colorado

Minimum wage in Colorado

State minimum wage is set at $14.42 per hour.

Certain local jurisdictions in Colorado have established higher minimum wage rates:

Denver: The citywide minimum wage is $18.29 per hour
Boulder County: The minimum wage is $15.69 per hour
Edgewater: The minimum wage is $15.02 per hour

Employers are required to pay the highest applicable minimum wage rate based on the employee's work location.

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Colorado Anti-Discrimination Laws

Colorado has comprehensive anti-discrimination laws that protect employees from discrimination in the workplace. The Colorado Anti-Discrimination Act (CADA), along with federal laws, provides strong protections for employees based on various protected characteristics.

Employees are protected from discrimination based on race, color, national origin, ancestry, sex, age (40 and older), disability, religion, sexual orientation, gender identity, marital status, and pregnancy.

Onboarding New Hires in Colorado

We can help you get your new employee started in Colorado fast, with a minimum onboarding time from just 1-2 working days. Note that the timeline is dependent upon registration with the local authorities, and begins after the employee has submitted all the required information on the Playroll platform.

For non-citizens of the US, a work eligibility assessment may be required, and can add three extra days to the onboarding time. If a follow-up is needed, there may be additional delays.

Please note that payroll cut-off dates can impact the actual first day of employment. Playroll’s payroll cut-off date is the 10th of the month, unless otherwise specified.

Payroll Taxes For Colorado

Most employers opt for biweekly (every two weeks) or semimonthly (twice a month) pay cycles.

Looking to grow your team in Colorado?

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Colorado Employment Taxes

Employer Tax Contributions

New employers in Colorado start at 3,05% towards the state unemployment insurance fund. The rates for established employers usually ranges between 0.81% to 12.34%.

Employment Tax Type	Tax Rate
Social Security	As per federal legislation
Medicare	As per federal legislation
Unemployment tax	As per federal legislation
State unemployment insurance	0.0305
Family and Medical Leave Insurance (FAMLI)	0.0045
Workers compensation insurance	% varies

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Employee Payroll Tax Contributions

Additional Medicare Tax: Employees earning over $200,000 annually pay an extra 0.9% in Medicare taxes; employers are not required to match this additional amount.

Employee Payroll Tax Contribution	Tax Rate
Social Security	As per federal legislation
Medicare	As per federal legislation
Family and Medical Leave Insurance	0.0045

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Tax Due Dates in Colorado

In Colorado, the state income tax filing deadline aligns with the federal deadline, which is typically April 15.

Pension in Colorado

Private-sector employers with five or more employees, who have been in business for at least two years, and do not offer a qualified retirement plan are required to participate in the Colorado SecureSavings Program.
This state-facilitated program mandates that eligible employers automatically enroll their employees in a Roth Individual Retirement Account (IRA), with contributions made through payroll deductions. Employees have the option to opt out.
Employers must register with the program, facilitate payroll deductions, and remit contributions. They are not required to match employee contributions.

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Colorado tailored to your needs.

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Paid and Unpaid Leave Policies in Colorado

Is vacation leave mandatory in Colorado?

No, Colorado does not require employers to provide paid or unpaid vacation leave.

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What are Mandatory Leave Entitlements in Colorado?

Type of Leave	Time Period	Mandatory	Pay Status	Eligibility Criteria
Sick Leave	1 hour of paid sick leave for every 30 hours worked	Yes	Paid (Full)	All Colorado employees including part-time and seasonal workers
Family and Medical Leave Insurance	As stipulated by federal FMLA legislation	Yes	Paid	The birth or adoption of a child, personal illness, or care for a family member with a serious health condition
Jury Duty leave	The expected duration of the jury service.	Yes	Paid	This obligation applies to all employees, including full-time, part-time, temporary, and casual workers, provided they have been employed for at least three months prior to the summon
Voting leave	2 hours	Yes	Paid	Employee must provide employer with proof that he/she voted
Crime victim leave	3 days	Yes	Unpaid	Employees who have been victims of a crime are eligible to this leave to attend court proceedings

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Paid Time Off in Colorado

In Colorado, employers aren't required to offer PTO, but if provided, all earned PTO must be paid out upon separation. "Use-it-or-lose-it" policies are not allowed, though caps on accrual are permitted.

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Maternity Leave In Colorado

Colorado Family and Medical Leave Insurance (FAMLI) Program:
Provides up to 12 weeks of paid leave for childbirth and bonding with a new child. An additional 4 weeks are available for pregnancy or childbirth complications.

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Paternity Leave In Colorado

In Colorado, paternity leave is supported through both federal and state programs, providing fathers with the opportunity to bond with their newborn or newly adopted children.
Colorado Family and Medical Leave Insurance:
Provides up to 12 weeks of paid leave for bonding with a new child through birth, adoption, or foster care. An additional 4 weeks are available for pregnancy or childbirth complications.

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Sick Leave In Colorado

In Colorado, paid sick leave is required under the Healthy Families and Workplaces Act (HFWA).
All Colorado employees, including part-time and seasonal workers, are eligible for paid sick leave. Employees earn one hour of paid sick leave for every 30 hours worked, up to a maximum of 48 hours per year.
Unused sick leave can be carried over to the following year, capped at 48 hours per year.

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Military Leave in Colorado

Employees are entitled to take leave for the entire period of their military service, whether it's for training or active duty. Private-sector employees who are members of the Colorado National Guard or the reserve forces of the United States are entitled to a leave of absence from employment in order to receive military training with the United States armed forces for the equivalent of three weeks of work on the employee's regular work schedule each year.
Employers must allow employees on military leave to continue accruing benefits, such as seniority and pension rights, as if they had remained continuously employed.

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Jury Duty in Colorado

In Colorado, employers are required to provide leave for employees summoned for jury duty.
This obligation applies to all employees, including full-time, part-time, temporary, and casual workers, provided they have been employed for at least three months prior to the summons.
During the first three days of jury service, employers must pay regular wages, up to $50 per day, unless a higher amount has been mutually agreed upon.
After the third day, the state compensates jurors at a rate of $50 per day. Employers are prohibited from penalizing employees for fulfilling their jury duty obligations.

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Parental Leave In Colorado

The Colorado Family and Medical Leave Insurance (FAMLI) program offers up to 12 weeks of paid leave for bonding with a new child through birth, adoption, or foster care. An additional 4 weeks are available for pregnancy or childbirth complications.

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Benefit Requirements for Employers in Colorado

In Colorado, employers are required to provide certain benefits to employees to comply with state and federal laws.

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Are employers required to provide health insurance in Colorado?

Employers with 50 or more full-time employees are required to offer health insurance that meets ACA (Affordable Care Act) standards. Colorado does not mandate health insurance for employers with fewer than 50 employees.

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Do part-time employees get benefits in Colorado?

Paid Sick Leave: Part-time employees are eligible for paid sick leave under Colorado’s HFWA.
Family and Medical Leave Insurance: Part-time employees contribute to the FAMLI program and are eligible for paid family and medical leave based on their earnings.
Workers' Compensation Insurance: All employees, including part-time workers, are covered by workers' compensation insurance to protect them in case of work-related injuries or illnesses.
Unemployment Insurance: Part-time employees may be eligible for unemployment benefits in Colorado if they meet the state’s requirements for wages earned and work history.
Retirement Savings: Part-time employees at eligible employers (those without existing retirement plans and five or more employees) can participate in the Colorado SecureSavings Program

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Are employers required to offer 401k in Colorado?

Colorado employers are not required to offer a 401(k) plan, but many are required to provide retirement savings access through the Colorado SecureSavings Program if they don’t already offer a retirement plan like a 401(k).

Employment Termination Protocols in Colorado

Termination Process in Colorado

In Colorado, the termination of employment is primarily governed by the at-will employment doctrine, meaning that either the employer or the employee can terminate the employment relationship at any time, with or without cause or notice

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Notice Period in Colorado

In Colorado, no specific notice period is legally required before terminating an employee.

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Severance in Colorado

Colorado law does not mandate severance pay. If an employer terminates an employee, all earned wages and compensation are due immediately. If an employee resigns, the final wages are due on the next regular payday.

Hiring Employees in Colorado with an employer of record

Discuss how an EOR handles onboarding, including setting up compliant employment contracts, registering for taxes, and managing benefits like Colorado's superannuation system (if applicable).

The employer of record is responsible for:

Employment Compliance: Ensure all employment contracts comply with Colorado's labor laws and regulations, including proper classification of employees.
Payroll Management: Calculate, process, and distribute employee salaries in accordance with Colorado's payroll laws, including deductions for taxes and social security contributions.
Tax Filing and Contributions: Handle the registration, filing, and payment of employer taxes and social security contributions to the relevant authorities.
Employment Contracts: Draft and maintain compliant employment agreements, detailing salary, benefits, working hours, and termination terms in line with Colorado's legal requirements.
Benefits Administration: Provide mandatory employee benefits as required by [State]'s labor laws, such as health insurance, pension contributions, and statutory leave.

Employer of Record for Colorado

Guide to Hiring Employees in Colorado