The Colorado Department of Labor and Employment (CDLE) has proposed new rules to Colorado’s ever-changing laws on overtime, minimum wage, and vacation requirements. As with other changes to Colorado employment law in recent years, this year’s proposed changes will be significant if implemented. The proposed rules and more information on the comment period can be found here.
The most consequential proposed change is to Colorado’s Wage Protection Rules following the Colorado Supreme Court’s significant decision earlier this year: Nieto v. Clark’s Market, Inc. In Nieto, the Court held that “use-it-or-lose-it” vacation policies were prohibited and that all “earned” and “determinable” vacation pay must be paid at the end of an employment relationship regardless of any purported forfeiture agreement. Even before Nieto, the Colorado Wage Protection Act made it clear that employers must pay out unused and accrued vacation time at the end of employment. But the CDLE had informally advised that because paid time off (PTO) was a combination of vacation, sick leave, holidays, and personal days, PTO was not required to be paid out upon separation. Following Nieto, however, employers knew that the applicability of that informal advice was likely short lived.
The proposed Wage Protection Rules will define vacation pay as “pay for leave, regardless of its label, that is usable at the employee’s discretion (other than procedural requirements such as notice and approval of particular...
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