Key Points:
- Colorado HFWA leave must be paid at the same pay rate, with the same benefits, the employee would have been afforded had they worked during the leave period.
- Employees will not earn additional compensation during HFWA leave if the use of leave does not reduce their pay.
- For employees paid wages plus commissions, the calculation of the HFWA pay rate does not include commissions.
- For employees who work at multiple rates, HFWA leave will be paid at the rate the employee would have earned during the leave period had they worked.
- The “lookback period” for calculating the HFWA pay rate applies only when the pay rate for the leave period is unknown.
New wage rules explain how employers must calculate pay for HFWA leave.
The Colorado Department of Labor and Employment’s Division of Labor Standards and Statistics recently adopted new Wage Protection Rules (Rules) that clarify how employers must calculate the rate of pay for employees taking leave under Colorado’s Healthy Families and Workplaces Act (HFWA). The Rules take effect on February 1, 2026.
Employees on HFWA leave must be paid their same pay rate with the same benefits, including health benefits, as they normally earn during hours worked, but excluding overtime premiums, bonuses, and holiday leave pay, that apply when they are not on leave. Despite this seemingly clear instruction, there has been ongoing confusion about how to determine the rate of pay for certain employees, including those who are paid commissions and/or have varying rates of pay.
The Rules clarify that: “Employees shall be paid for leave the same wages that the employee would have earned if the employee had worked, excluding bonuses and overtime premiums.” In other words, if the rate the employee would have been paid had they worked is known, the employee must be paid that same rate for the HFWA leave period.
With this principle in mind, the Rules provide direction on specific scenarios:
- “If use of leave does not reduce an employee’s pay (e.g., if the employee is paid solely on a salary, commission, or piece rate basis, and the leave does not impact total salary, commissions, or piece pay), then the employee does not earn additional compensation solely for using leave.
- If an employee receives a wage in addition to commissions, commissions are not included in the pay rate for sick leave.
- If an employee works at multiple rates, including shift differentials and separate jobs for the same employer, the employee shall be paid the rate they would have earned during the period of leave.”
The Rules also clarify that the 30-day lookback period calculation applies only when the pay rate for the leave period is unknown. When the pay rate for the HFWA leave period is unknown, the rate is calculated based upon the employee’s pay over a “lookback” period of the 30 calendar days before the leave or, if the employer prefers, the most recent full pay period or workweeks totaling 28 to 31 days.
For new hires who have not worked a full “lookback” period, the calculation will be based on all days worked. The pay rate must include hourly or salary rates, shift differentials, tip credits, and commissions (if applicable refer to (2) above), but will not include overtime premiums, bonuses, or holiday leave pay.
The requirements that HFWA leave must be paid on the same schedule as regular wages, and the pay rate must be at least the applicable minimum wage remain unchanged.
[View source.]
