Coming August 2022: Colorado Substantially Limits Noncompete Agreements

Beginning August 10, 2022, Colorado will drastically narrow the circumstances in which Colorado employers can seek to enforce noncompete and other restrictive employment agreements. Despite Colorado law already having a general restriction against the use of noncompete agreements, the Colorado General Assembly recently passed, and Gov. Jared Polis has now signed, HB 22-1317. With this bill, Colorado joins the growing number of states enacting increased employee protections against restrictive covenant agreements, including banning such agreements with workers earning below a certain threshold.

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Colorado Issues New Guidance on Prohibition Against Forfeiture of Earned Vacation or PTO

A series of recent developments in Colorado law have made it clear that employers are prohibited from causing employees to forfeit earned vacation time. A compilation of recent developments and the Colorado Department of Labor and Employment’s current position are contained in Interpretive Notice & Formal Opinion (INFO) #14, which explains that:

  1. Employees must be paid all earned vacation pay when their job ends.
  2. No employment policy or agreement can waive or forfeit earned vacation at any time.
  3. All paid leave which can be used at the discretion of the employee is considered “vacation pay” subject to the non-forfeiture rules.

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Colorado Increases Its Criminal Penalty for Violations of Its Noncompete Law

On July 6, 2021, the Colorado legislature passed S.B. 21-271 in an effort to reform the sentencing provisions related to a number of petty offenses and misdemeanors. As a result, several Colorado laws related to labor and employment are affected, including Colorado’s statute addressing restrictive covenant and noncompete agreements, C.R.S. § 8-2-113. Under C.R.S. § 8-2-113, it is unlawful to intimidate workers in order to limit their ability to engage in lawful work; and covenants that restrict trade, such as noncompete and nonsolicitation agreements, are void unless the covenants fit within limited exceptions provided under the statute. Effective March 1, 2022, the penalty for violating the noncompete statute will be increased to a class 2 misdemeanor punishable by up to 120 days in jail, or a fine of up to $750, or both.

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Summary of Cal/OSHA’s Revised COVID-19 ETS Adopted on December 16, 2021

On December 16, 2021, the California Occupational Safety & Health Standards (Cal/OSHA) Board voted to re-adopt its COVID-19 prevention emergency temporary standards (ETS) incorporating changes Cal/OSHA posted in preparation of its business meeting on December 16, 2021. If approved by the Office of Administrative Law (which is expected), the revised ETS will take effect on January 14, 2022 and will expire on April 14, 2022.

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New Wage and Hour Rules in Colorado

The Colorado Department of Labor and Employment (CDLE) has adopted the Colorado Overtime and Minimum Pay Standards (COMPS) Order #38 and new Wage Protection Rules as well as the 2022 Publication and Yearly Calculation of Adjusted Labor Compensation (PAY CALC) Order, which became effective January 1, 2022. Below is a summary of notable changes in the new rules.

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Summary of Cal/OSHA’s Revised COVID-19 ETS Adopted on June 17, 2021

On June 17, 2021, the California Occupational Safety & Health Standards (Cal/OSHA) Board voted to re-adopt its COVID-19 prevention emergency temporary standards (ETS) incorporating changes Cal/OSHA noticed on June 11, 2021 (revised ETS).

The revised ETS (which will make changes to California Labor Code Sections 3205 through 3205.4) are aligned with the latest guidance by the Centers for Disease Control and Prevention (CDC) and the California Department of Public Health (CDPH). The revised ETS are also aligned with Governor Newsom’s guidelines to reopen California as of June 15, 2021. Following Cal/OSHA’s vote, Governor Newsom signed an Executive Order on June 17, 2021, enabling the revised ETS to take effect without the normal 10-day review period by the Office of Administrative Law.

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