Colorado employers may want to consider tracking paid vacation and paid sick leave separately for easier compliance with HFWA.

Although several states have specific paid leave laws, for the purpose of this article, we are highlighting regulations in the State of Colorado.

While a paid time-off policy isn’t required by law under the FLSA (Fair Labor Standards Act), sick leave is now becoming a requirement across many states.

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Paid Vacation

When it comes to vacation leave, Colorado Employers are not required to provide paid vacation. However, if you do offer paid vacation, we recommend using a simple calculation of time accrued or earned over a period of time to determine the amount of leave an employee can take.

Keep the following tips in mind when crafting your paid vacation policy:

  • Treat hours as vested wages once they are earned. Although not clearly forbidden by law, the statements of the Colorado Division of Labor & Employment (CDLE) indicate that “use-it or lose-it policies,” or policies that cause vacation to be forfeit at termination, are not acceptable.
  • Consider creating a limit on vacation accrual, so that once that limit is reached, employees will no longer accrue additional time off until they use some of the hours currently available.
  • Consider giving an extra allotment based on milestones with the company, for example, increases based on number of years with your organization.
  • Base the amount of leave on accrual instead of lump sum bank, which is simpler to implement and limits Employer liability in terms of payout.
  • Determine how leave accrual is based — calendar year or anniversary date of employment.

Paid Sick Leave

The Colorado Healthy Families and Workplaces Act (HFWA) requires Employers to provide paid leave to their employees in certain situations. When it comes to sick time, this is where legislation clearly defines your sick leave policy for you.

With such detailed requirements for the Employer, we highly recommend tracking Sick Leave separately from Vacation or any other type of leave or paid time-off.

For example, the following outlines some* requirements that are necessary for Sick Leave under Colorado’s HFWA:

  • Employees must be allowed to use their paid sick leave in hourly increments unless Employer allows in smaller increments.
  • Employers may not require that an employee try to cover their shift as a condition of using paid sick leave.
  • Employers are not required to pay out an employee’s unused sick leave when an employee separates from employment (whereas vacation is looked at as vested wages earned and thus required to be paid out upon separation).
  • Employers must provide an accounting of an employee’s accrued, used, and available sick leave upon request, but not more than once per month (this can get complicated if sick leave is lumped in with an overall PTO policy).
  • Employees may request to use their paid sick leave orally or in writing, including electronically (this could be different from your standard expectations for requesting vacation or other types of leave).
  • If an employee is rehired within six months the Employer shall reinstate any sick leave the employee accrued by had not used during previous employment.