Minimum Wage Increase
Beginning January 1, the state increased the hourly minimum wage by $1.09 to $13.65 for regular hourly employees, and to $10.63 for tipped employees. (Currently, federal minimum wage is set at $7.25.) An exception is Denver, the only city to set its own minimum wage, which will increase to $17.29 an hour for the regular rate.
Minimum wage in Colorado is determined at the start of each year based on the previous year’s inflation rate, so this year’s increase is roughly equal to 9 percent. While minimum wage workers will likely be pleased with a small income boost, employers will need to decide on whether to absorb the cost or to pass it along to customers and clients. Find out more about the increase here.
Paid Family Leave Deductions Begin
Also starting this year, the state will begin collecting fees from private employees to fund Colorado’s new Family & Medical Leave Insurance program approved by voters during the 2020 election.
Up to $4.50 for every $1,000 of earned wages will be withheld from qualifying workers’ paychecks and every private employer will be required to start making payments to the program. Employers do have the option of covering the cost themselves rather than deducting it from paychecks.
All private employers will have through mid-year to register their businesses in the My FAMLI+ portal for making payments. The program will become available for use beginning in 2024. Companies can also offer their own alternative programs in lieu of the state program but those alternative options must meet specified state guidelines.
Unemployment Insurance Takes a Small Hike
Colorado’s unemployment trust fund was wiped out when so many workers lost their jobs during the pandemic, forcing the state to borrow $1 billion from the federal government to keep unemployment benefits flowing. Though the state was able to pay off the loan, a law (SB20-207) was passed in 2020 to replenish the fund more quickly by raising the base wage used to calculate unemployment insurance payments each year.
In 2022, employers were required to pay insurance on an employee’s first $17,000 in pay. In 2023, that minimum jumps up to $20,400. The wage base will increase at set amounts through 2026, after which the increase will be based on the change in annual wages.
Important Changes to Non-Compete Law
In August 2022, Colorado’s non-compete law (HB22-1317) was amended to impose more strict limits on employers, as well as the potential for higher penalties in an effort to prohibit non-compete agreements for workers under a specified salary threshold. Penalties were increased to $5,000 to prohibit non-compete agreements for any employee not considered “highly compensated” (currently identified as $101,250 annually) and to prohibit customer non-solicitation agreements for all employees making less than $60,750 annually.
Don’t let changing employment laws catch you by surprise.
At Hackstaff Snow Atkinson & Griess, we know how to ensure your business is protected and compliant. Give our office a call today to schedule a consultation.
