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What Do Businesses Need to Know about the New Year?

New Year Brings New Regulations for Business Community

2020 was hard in so many ways. The pandemic challenged us in ways we couldn’t have anticipated: many of us went remote, started to provide services and goods online, navigated lower revenues and grappled with how to keep our employees and customers safe during a global pandemic. On top of the vast health and economic challenges we experienced this year, it was also a year with a lot of policy changes for employers and the business community. As we usher in 2021, we want to highlight a few key changes going into effect on the first of the year.

Equal Pay for Equal Work Act. The Equal Pay for Equal Work Act goes into effect on Jan. 1, 2021. This is critical for you to know because it impacts how you post jobs and pay employees. The law prohibits employers from paying different wages to employees who perform substantially similar work on the basis of sex — a policy long supported by our employers. What that means to you is that you may need to audit pay for your employees. In addition, you may not ask the salary history of a prospective employee or rely on their wage history for determining their pay. How you post jobs may need to change, too. You must include compensation scales and general descriptions of benefits in your Colorado job postings. You can view our webinar and read more about the rulemaking for this law here. Our investor and partner, Employers Council, has a guide to assist employers in complying with these new requirements as well.

Paid Sick Leave. While the federal requirements for paid sick leave expire Dec. 31, 2020, a new state law regarding paid sick leaves takes effect starting Jan. 1, 2021. Companies with 16 or more workers need to provide at least one hour of paid sick leave for every 30 hours worked, up to a maximum of 48 hours per year. In 2022, this will extend to employers of any size. An employee begins accruing paid sick leave when the employee’s employment begins, may use paid sick leave as it is accrued, and may carry forward and use in subsequent calendar years up to 48 hours of paid sick leave that is not used in the year in which it was accrued. The law also requires additional paid sick leave for companies of any size during public health emergencies like the pandemic. 

Unemployment Insurance. Starting Jan. 1, 2021, the premium rate structure for unemployment insurance will be shifting from the third lowest rate to the second highest rate based on a reserve ratio between 0.000 to 0.0004. The specific rate an employer will pay is based on their experience rating, which varies among employers. The solvency surcharge has been suspended for 2021 and 2022 but will likely return in 2023, however your rates are still likely to change due to the rate changes. For more information and to reach out directly with questions, visit the Colorado Department of Labor and Employment website.

Minimum Wage. The statewide minimum wage is set to increase on Jan. 1, 2021, with an additional increase for the City and County of Denver. The state will increase to $12.32 per hour while businesses that operate in Denver will increase to $14.77 per hour. Tip credits of up to $3.02 per hour are allowed for both the state and the city minimum wages.

Paid Family Leave will begin collecting premiums in January 2023. While the collection of this employment tax is a few years out, we want you to know that we are already working with the state on how this ballot issue will be implemented. Colorado voters approved Proposition 118 this past November, requiring that employers provide 12 weeks of paid time off for childbirth and family emergencies. While premium collection doesn’t begin until 2023 and the program will launch in 2024, it’s important for employers and employees to start preparing for this change. We are  working with state lawmakers and officials to provide input on setting up the billion-dollar-a-year program, hoping to ensure the program is fiscally secure, it has a clear and efficient opt-out process, and the system is in place for private insurers to enter the market to increase the likelihood that employees and employers can have more competitive rates and benefits.

We know what a challenging year this has been. We are so grateful for how hard our employers have worked to keep employees on payroll and companies viable.  We are looking to a future where we can see each other again and get more employees back to work following broad distribution of a vaccine. We are also hopeful of the potential for added relief for the many who are struggling right now.

We will continue to devote our efforts to supporting you and your employees and we wish you all a New Year that brings health, success and happiness.

Thank you for investing in us and making this work possible.

Kelly Brough is the president and CEO of the Denver Metro Chamber.