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Colorado wage law does not require that vacation time be given. Colorado wage law does not require paid vacation and does not require that an employer establish a vacation policy.
An employer may establish a vacation policy in writing or by custom and practice. Employees must be made aware of the employer's policy. Employers and employees must follow established policy unless and until that policy is changed. The Division recommends that employers develop their vacation policy in consultation with legal counsel.
Vacation as Wages or Compensation
Colorado wage law provides that vacation pay, earned in accordance with the terms of any agreement, is classified as wages or compensation. If an employer provides paid vacation for an employee, the employer shall pay upon separation from employment all vacation pay earned and determinable in accordance with the terms of any agreement between the employer and the employee.
A "furlough" does not qualify as employment “separation” triggering the requirement to pay out earned vacation pay if it is a bona fide furlough. A "bona fide furlough" is:
- caused by a full or partial shutdown of employer operations, and
- planned and genuinely expected to be not longer than 30 days OR any longer duration of a state of emergency declared by the state or federal government that required the shutdown.
A situation that does not meet the requirements of both (1) and (2) qualifies as employment “separation” triggering the requirement to pay out all earned vacation pay. If a furlough starts as a bona fide furlough, but then ceases to qualify, including when any plans change such that any requirement of part (1) or (2) is no longer satisfied, the requirement to pay out vacation pay is triggered Example: When an employer’s plans change and employees will no longer be brought back within the timeframe of (2) above.
Granting of Vacation Leave
In general, the granting of vacation leave by an employer for a current employee is made pursuant to the employer's policy. The Division of Labor Standards and Statistics does not intervene in disputes involving the scheduling of vacation leave or the denial of use of vacation leave for current employees.
- Colorado Revised Statutes 8-4-101(14)(a)(III) (Vacation Pay)
- Wage Protection Act Rules 7 CCR 1103-7, Rule 2.15 (Vacation Pay)
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