When it comes to paying your employees overtime in Colorado, there are some important things to know. So, let’s take a closer look into overtime laws and how they apply in the state of CO.


What is the Definition of Overtime in Colorado?

Employees in Colorado are eligible to earn overtime pay of 1.5 times their regular hourly pay  if:


  • They work more than 12 hours in a day.
  • They work more than 40 hours in a week.
  • They work 12 consecutive hours, regardless of the starting or ending time of the workday.


If you are unsure whether to calculate by hours in a day or hours in a week – the over time pay should be paid according to whichever calculation results in the greater payment of wages.


Overtime must be paid as income and cannot be paid as “comp time.” For example, the law states that an employer may not require an employee to work 50 hours one week in exchange for additional time off on the following week. Each workweek stands alone and employers cannot “average” the hours over two or more weeks.


It is important to note that overtime pay is due after an employee works more than 12 hours per day – regardless of whether they work in excess of 40 hours per week. So, even if an employee works 14 hours on Monday but doesn’t work for the rest of the week, they are still eligible for overtime pay of 2 hours for that week.


Also, don’t forget that Colorado law requires an employer to give employees an unpaid, uninterrupted 30 minute break for every 5 hours worked. If an uninterrupted break is impractical, employees may eat an “on duty” meal while working and be fully compensated for this time. Also, each employee is entitled to a paid 10 minute break for every four hours worked.


Who is Eligible for Overtime?

Only employees who are covered by the Colorado Minimum Wage Order Number 33 are eligible for CO overtime pay.


There are some types of workers who are exempt from Colorado wage and hour laws. For example, the following professions are exempt from the minimum wage and overtime pay requirements:


  • Computer professionals who earn more than $27.63 per hour.
  • Executives.
  • Administrative employees.
  • Professional employees.
  • Outside sales people who spend at least 80% of the workweek on tasks directly related to their own outside sales.
  • Salespersons employed by boat, aircraft and trailer retail dealers.
  • Commission salespeople receiving at least 75% of their income from commission.
  • Independent contractors (as long as the employee has a significant amount of control over how and when they perform their job).


Also, employees in the ski industry are exempt from the 40 hour workweek overtime requirement.


It can be complicated to determine who is employed in an “administrative” or “professional” capacity. Generally, the exemption applies to those who manage two or more employees, run a business unit or are lawyers, doctors or teachers.


However, there are many “white collar” workers in Colorado with high salaries who believe that they are not entitled to overtime when in fact they may be. One of the most common violations of Colorado overtime law is when employees assume that salaried employees are not entitled to overtime pay. To clarify this law on overtime, read this helpful article about exempt vs. nonexempt employees.


“Working Off the Clock” Laws

It is important for employers to take into consideration all hours worked by an employee – to avoid issues with “working off the clock.” An employer can sometimes overlook certain kinds of work when calculating employee hours, such as meal times, time spent cleaning or preparing equipment or non-commuting travel time such as driving between jobs.


Also, automatic time clocks that round the time or automatically deduct break time whether or not it was actually taken can result in employees working “off the clock” which is in violation of Federal and Colorado wage laws.


How Is Overtime Pay Calculated?

Generally, regularly hourly rate is calculated by dividing all of the pay for the week, including shift pay and bonuses, by 40 hours. Then, over time pay of one and a half times the regular hourly rate is paid on the overtime hours.


Here is how Colorado overtime is calculated according to various working arrangements:


A Salaried Employee on a Fluctuating Workweek

The weekly salary is divided by the number of hours worked in the workweek to determine the regular hourly rate. For any hours worked over 40, the rate of 1.5 times the regular hourly rate is applied.


Salary Paid Monthly

The monthly salary is multiplied by 12 to determine the yearly salary, then divided by 52 to get the weekly salary. Divide the weekly amount by hours worked to determine the regular rate. The overtime rate equals 1.5 times the number of hours over 40 in the workweek.


Piece Rate Payment

When an employee is paid on a piece rate basis according to each service completed or piece produced, the regular rate of pay is calculated by adding together the total earnings from the workweek. Then, that sum is divided by the total number of hours worked in a week.


Tipped Employees

Employees who receive tips, such as those in the hospitality and foodservice industry, can be paid less than minimum wage on the theory that their tips make up the difference. For example, a restaurant server minimum wage may be $3.02 less per hour than the full minimum wage. However, if a tipped employee works overtime, the employer must calculate the overtime pay on the full minimum wage.


It is important to consider both federal and state law when determining overtime pay for employees. If both Colorado and Federal Law applies, the employer should follow the law that provides the greatest protection to the employee.