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CO Interpretive Notice INFO #3 July 11, 2023 Active
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Summary: "Wages" and "Compensation" under Colorado Wage Law

Summary: This short Division notice is a roadmap to the "INFO #3 series" on Colorado wage law: what counts as protected "wages or compensation" (hourly pay, salaries, piece-rate, bonuses, commissions, vacation pay, and paid sick leave, but not severance or deferred-comp plans), when and how wages must be paid, and what non-cash items (like lodging, meals, or tips) an employer may credit toward wages owed. Each topic is detailed further in a companion INFO (#3A-#3E). It matters to any Colorado employer or employee sorting out what pay is legally protected and how it must be delivered.
About this page: The full text below is the official document from Colorado Division of Labor Standards and Statistics (CDLE). Ezel adds the plain-English summary and tracks the document's status. The official source linked on this page is authoritative for any reliance.
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Division of Labor Standards and Statistics
707 17th Street, Denver, CO 80202 | (303) 318-8441
www.ColoradoLaborLaw.gov | www.LeyesLaboralesDeColorado.gov

Interpretive Notice & Formal Opinion ("INFO") #3:
Summary: "Wages" and "Compensation" under Colorado Wage Law

Overview: This INFO series explains how employers must pay employees all "wages or compensation" they earn, and keep certain records related to their wages and hours. This INFO #3 summarizes INFOs:

  • #3A: Timing of Wage Payments, & Required Record-Keeping
  • #3B: Permissible and Impermissible Methods of Payment
  • #3C: Tips (Gratuities) and Tipped Employees Under Colorado Wage Law
  • #3D: Commissions and Bonuses
  • #3E: Payment of Earned Vacation upon Separation of Employment

Payment Timing and Record-Keeping Obligations (more detail in INFO #3A): an employer must:

  • Timely pay wages owed to employees.
  • Pay all wages owed upon an employee's separation.
  • Provide pay statements to employees (and to the Division, upon request) and keep at least three years of wage records.

Definition of Protected "Wages" or "Compensation" (more detail in INFO #3B): Any earned, vested, and determinable amount owed to an employee for labor or service (C.R.S. § 8-4-101(14)(a)(I)), which includes:

  • Hourly rates (for example, $20.00 per hour)
  • Salaries (for example, $1,500.00 per week)
  • Per-task or per-piece payments (for example, $20.00 for each oil change completed)
  • Bonuses or commissions earned under employer/employee agreements (C.R.S. § 8-4-101(14)(a)(II)) (more detail in INFO #3D)
  • Vacation pay remaining when the employment relationship ends (C.R.S. § 8-4-101(14)(a)(III)) (more detail in INFO #3E)
  • Paid sick leave under the Healthy Families and Workplaces Act (C.R.S. § 8-4-101(14)(a)(IV) and §§ 8-13.3-401 to -418) (more detail in the INFO #6 series)
  • But not — severance pay (C.R.S. § 8-4-101(14)(b)), or a "profit-sharing plan, a pension plan, or other similar deferred compensation programs" (C.R.S. § 8-4-103(3)).

Payment Methods (more detail in INFO #3B):

  • An employer may pay wages with checks, cash, direct deposit, money orders, or similarly secure means — as long as employees have free and on-demand access to their entire net pay.

Credits toward Wages Due (more detail in INFO #3C (tips), and INFOs #1 (credits) & 16 (deductions)):

  • The value of certain non-money benefits (lodging and meals) can count (or be "credited") towards minimum wages owed, with limits and conditions.
  • Employers may credit tips paid by customers toward minimum wages owed — with conditions and limits, mainly to assure tips aren't taken from tipped employees, and don't undercut minimum wages.

For More Information: Visit the Division website, call 303-318-8441, or email [email protected].

INFOs are not binding law, but are the officially approved Division opinions and notices on how it applies and interprets various statutes and rules. The Division continues to update and post new INFOs; email [email protected] with any suggestions. To be sure to reference up-to-date INFOs, rules, or other material, visit ColoradoLaborLaw.gov. Last updated Jul. 11, 2023.

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