Employment Agreement Laws in Colorado: What You Need to Know

As an employer or an employee in Colorado, it’s essential to understand the state’s employment agreement laws. These laws govern the relationship between employers and employees, ensuring both parties’ rights are protected. In this blog post, we’ll discuss some key aspects of Colorado’s employment laws, including at-will employment, wage and hour laws, and non-compete agreements.

At-Will Employment in Colorado

Colorado is an at-will employment state, which means that both employers and employees can terminate the employment relationship at any time, for any reason, or for no reason at all, as long as the termination is not in violation of federal or state laws.

However, there are certain exceptions to the at-will employment doctrine:

Contractual agreements: If an employer and employee have a written or implied contract that includes specific terms of employment, such as duration or termination requirements, the at-will doctrine may not apply.

Public policy exception: An employer cannot terminate an employee for reasons that would violate public policy. For example, an employer cannot fire an employee for filing a workers’ compensation claim, reporting illegal activities, or refusing to commit an unlawful act.

Implied covenant of good faith and fair dealing: Although not all Colorado courts have recognized it, some courts have ruled that there is an implied covenant of good faith and fair dealing in every employment relationship. This means that employers must treat their employees fairly and not terminate them in bad faith.

Wage and Hour Laws in Colorado

Colorado’s wage and hour laws dictate minimum wage, overtime pay, and other wage-related issues. As of January 1, 2022, the minimum wage in Colorado is $12.56 per hour for non-tipped employees and $9.54 per hour for tipped employees. The minimum wage will continue to increase annually based on the Consumer Price Index for the state.

Overtime pay is required for non-exempt employees who work more than 40 hours in a workweek or more than 12 hours in a workday. Overtime pay must be at least one-and-a-half times the employee’s regular rate of pay. Some employees may be exempt from overtime requirements, such as executive, administrative, and professional employees who meet specific salary and duties tests.

Employers are also required to provide meal and rest breaks for employees. Employees who work at least five consecutive hours are entitled to a 30-minute unpaid meal break. Additionally, employees are entitled to a paid 10-minute rest break for every four hours worked.

Non-Compete Agreements in Colorado

Non-compete agreements, also known as restrictive covenants, are contracts that restrict an employee from working for competitors or starting a competing business after their employment ends. 

In Colorado, non-compete agreements are generally disfavored and are only enforceable under certain circumstances:

  • The non-compete agreement is part of the sale of a business.
  • The non-compete agreement is intended to protect trade secrets.
  • The non-compete agreement involves executives or management personnel and their professional staff.

To be enforceable, the non-compete agreement must be reasonable in scope, duration, and geographic area. Typically, courts will consider factors such as the nature of the employer’s business, the employee’s role, and the potential harm to the employer’s legitimate interests.


Understanding Colorado’s employment agreement laws is crucial for both employers and employees to ensure a fair and lawful working relationship. By being aware of at-will employment, wage and hour laws, and non-compete agreements, you can better protect your rights and avoid potential legal disputes. Always consult with an experienced Denver employment attorney if you have questions or concerns about your specific situation.

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