Colorado Department of Labor and Employment: 

Is The Key You become a household employer when you hire an individual to perform duties and provide services under your direction in your private home. Generally, these workers are your employees, not independent contractors. Failure to properly classify the worker and make the appropriate employment tax filings and payments is considered tax fraud by the IRS.

 Payroll Tax Responsibilities: 

You are responsible for federal employment taxes when you pay household workers as little as $1,000 in a calendar quarter or when you pay any individual employee age 18 or over $3,000 in a calendar year.

  You have both Federal and State tax filing responsibilities. Federal employment taxes are reconciled with the household employer’s annual Federal Income tax return. Your state may require quarterly unemployment tax filings, as well as reports and remittance of state income taxes withheld, if applicable. Employee wages are reported to the Social Security Administration. Your employee is due a W-2 form in January. 

Social Security and Medicare Taxes 

The household employer is responsible for the payment of all Social Security and Medicare taxes to the IRS. You may choose to either collect your employee’s taxes via payroll deductions or fund these taxes yourself. 

Unemployment Taxes 

You will make contributions to the IRS and Colorado to fund unemployment and worker re-training programs. 

 Federal and state income taxes are ultimately the responsibility of the household employee; however, best practice is to deduct these taxes from your full time employee’s wages to help them avoid owing large sums when they file their annual income tax returns. 

Other Legal Responsibilities:

 Fair Labor Standards Act (FLSA) Compliance Maintain accurate and contemporaneous records including time tracking, gross pay calculations, and detailed records of all deductions from the employee paycheck. 

Pay no less than minimum wage on an hourly rate basis.

 Health Insurance 

You are not required to provide employee health insurance, however there are financial and retention advantages to contributing some or all of your employee’s health insurance premium. HWS is happy to discuss this with you.

 Colorado Labor Laws Colorado 

minimum wage is $15.16/hr. 

Denver minimum wage is $19.29/hr. 

Boulder County minimum wage is $16.82/hr 

Boulder City minimum wage is $16.82/hr

 Edgewater minimum wage is $18.18/hr 

All employees are to be paid an overtime differential of 1.5 times the hourly wage for hours over 40 in a work week, working more than 12 hours in a workday, or working more than 12 consecutive hours. Overtime or premium pay is not required for hours worked in excess of 8 per day or on weekends or holidays.

 Paid Time Off 

Employees in Colorado must be provided with up to 48 hours of paid sick leave each year. Sick Leave accrues at a rate of 1 hour for every 30 hours worked. While accrued but unused sick time can roll over to the next year, employees are only entitled to use 48 hours per year. More information can be found at https://cdle.colorado.gov/dlss/labor-laws-by-topic/wage-and-hour-laws-including-paid-sick-leave 

Employers and Employees contribute to the FAMLI leave insurance program, each at a rate of 0.44% of gross pay (0.88% combined). Employers with fewer than 10 employees are not required to contribute, but they are still required to collect and remit the employee’s share. Employees can file claims for benefits under FAMLI that can provide income for as much as twelve (12) weeks of family and medical leave. More information about FAMLI can be found at https://famli.colorado.gov/.

You must provide employees with up to 2 hours of paid leave to vote, unless:

 an employee has not requested the leave at least one day prior to the vote date, or the employee has 3 or more hours after the opening or before the closing of the polls where they are not supposed to be at work.

 Mileage Reimbursement 

The federal government establishes and updates a maximum rate for non-taxable mileage reimbursement each year. The current rate is $0.725 per mile. 

Payroll Frequency 

Colorado requires that all household workers be paid daily, weekly, bi-weekly, semi-monthly or monthly. Pay upon involuntary separation is due immediately, upon resignation on the next scheduled pay date. 

 Workers’ Compensation Insurance 

Colorado requires household employers to obtain Workers’ Compensation Insurance if the employee works 5 days a week or 40 hours in a week. However, HWS ALWAYS recommends obtaining a Workers Compensation Insurance policy for the protection it provides in the event of a work-related injury sustained by your employee. A policy can usually be obtained easily and cost effectively by contacting your Homeowner’s or Renter’s Insurance provider. HWS can help you obtain this insurance through THEIR insurance PARTNER State 

Unemployment Insurance 

Colorado requires a new employer state unemployment insurance tax of 3.05% for the first $30,600 of wages paid to each employee. This rate may vary if you have previous employees.

 Colorado requires weekly, monthly or quarterly tax filing for income withholding and quarterly tax filing for unemployment insurance. HWS recommends filing quarterly for both.

•  PHONE 303.725.5440

•  JENNIFER@SUPERIOR-NANNIES.COM