Hiring New Employees in Colorado: Legal Guidelines for Employers

Create a clear job description that complies with Colorado's Equal Pay for Equal Work Act, which requires employers to disclose compensation and benefits in job postings. Include salary or hourly wage range and a general description of benefits offered.

Develop an application form that complies with Colorado law. Avoid questions about criminal history (Colorado has 'ban the box' legislation), salary history (prohibited under the Equal Pay for Equal Work Act), and ensure it includes an at-will employment disclaimer.

When interviewing, avoid questions about protected characteristics (race, religion, age, etc.). Document your hiring decision process to demonstrate non-discriminatory practices. Colorado law prohibits discrimination based on sexual orientation and gender identity in addition to federally protected classes.

Draft an offer letter that includes position details, compensation, start date, at-will employment status, and any contingencies (background check, drug testing, etc.). Colorado requires transparency in compensation and employment terms.

If using a formal employment contract beyond an offer letter, ensure it complies with Colorado law. Include details about employment terms, compensation, benefits, termination conditions, and at-will status (if applicable).

Create an NDA that protects your business information while complying with Colorado law. Note that Colorado restricts the use of non-disclosure agreements that would prevent an employee from disclosing workplace sexual harassment or discrimination.

Draft a non-compete agreement if necessary, but be aware of Colorado's strict limitations. As of August 2022, Colorado significantly restricted non-compete agreements. They are only enforceable for highly compensated employees (threshold updated annually), executive/management personnel, or for trade secret protection. Non-competes must be reasonable in geographic scope and duration.

Create a form that complies with the Fair Credit Reporting Act and Colorado law. Obtain written consent before conducting background checks. Remember that Colorado has 'ban the box' legislation limiting when you can ask about criminal history.

If your offer is contingent on a background check, conduct it after making a conditional offer. Follow FCRA requirements for adverse action procedures if you decide not to hire based on background check results.

If you're a new employer in Colorado, register with the Colorado Department of Labor and Employment for unemployment insurance purposes. You'll need to register within 24 days of hiring your first employee.

Obtain workers' compensation insurance as required by Colorado law. Almost all employers in Colorado must carry workers' compensation insurance, with very few exceptions.

Have the employee complete Section 1 on or before their first day of work. You must complete Section 2 within 3 business days of the employee's start date. Verify identity and employment authorization documents in person.

Have the employee complete the federal W-4 form to determine federal income tax withholding. Keep this form in the employee's file.

Have the employee complete Colorado's state tax withholding form (DR 0004) to determine state income tax withholding.

Create a form for employees to authorize direct deposit of their paychecks. While not required by Colorado law, this is a common practice. Include banking information fields and authorization language.

Create an employee handbook that includes policies on paid sick leave (required in Colorado), anti-discrimination, anti-harassment, marijuana use (Colorado has specific protections for off-duty marijuana use), and other relevant policies. Include acknowledgment page for the employee to sign.

Create forms for employees to enroll in any benefits you offer (health insurance, retirement plans, etc.). Colorado requires certain employers to facilitate access to retirement savings through the Colorado SecureSavings Program if they don't offer a qualified retirement plan.

Create a form to collect emergency contact information from the new employee. While not specifically required by law, this is a best practice for workplace safety.

Report your new hire to the Colorado State Directory of New Hires within 20 days of hire. This is required by federal and state law for child support enforcement purposes.

Display all required federal and Colorado-specific workplace posters in a conspicuous location. Colorado requires specific posters including Paid Sick Leave, Equal Pay for Equal Work Act, Healthy Families and Workplaces Act, and others.

Under Colorado's Healthy Families and Workplaces Act, employers must provide paid sick leave to all employees. Inform new employees about their sick leave rights and how the policy works.

Ensure your payroll system is set up to comply with Colorado's minimum wage requirements, overtime rules, and paid sick leave tracking. Colorado has a higher minimum wage than the federal minimum and specific overtime rules.

Provide orientation for the new employee, covering workplace policies, safety procedures, and company culture. Document that the employee received all required information and forms.