Colorado Law Updates

2023 Colorado Law Updates for Restaurants

 

• Colorado Department of Revenue Retail Delivery Fee 2023 Update 

On July 1, 2022, Colorado restaurants (and other businesses that sell taxable items via delivery) were required to begin charging, collecting, and remitting a new Retail Delivery Fee (RDF) to the Colorado Department of Revenue (CDOR). The rule applies to all retail sales delivered by a motor vehicle to a location in Colorado, including those sales completed by a third-party delivery service. Businesses are required to submit the collected RDF following sales-tax filing frequencies and due dates, filed on a separate return (form DR 1786).

Beginning July 1, 2023, three important changes to the RDF rules will be implemented:

1. The RDF will increase from $0.27 to $0.28 for every delivery sale.
2. Businesses with $500,000 or less in total gross retail sales for the prior year will be exempt from the requirement to collect and remit the RDF.
3. Businesses will now have the option to pay the RDF on behalf of their customers, if they choose to do so.

For more information on the fee changes, including FAQs, click here (English). (Español)

• Statewide bag fee starting in 2023 

In 2021, the Colorado Legislature passed House Bill 21-1162, concerning the regulation of plastics and establishing a carryout plastic bag fee, which took effect on January 1, 2023. Restaurants are exempt from this statewide carryout bag fee. 

The Colorado Restaurant Association worked with the sponsors of this bill to secure an exemption for your businesses, which reads:

The carryout bag fee, which is required in CRS 25-17-505, applies only to stores and not to retail food establishments (see subsections (1)(a) and (2)(a) that each describe “… a store may provide a customer with one or more… carryout bags at the point of sale only if the customer pay a carryout bag fee …”). Therefore, the bag fee does not apply to retail food establishments, including restaurants. 

Additionally, restaurants are exempt from the prohibition against using plastic bags, which starts on January 1, 2024.

If a local jurisdiction has an ordinance creating a local bag fee or plastic bag ban, the local municipality can choose to include restaurants in their local ordinance. For example, the City of Louisville has a local ordinance requiring a $.25 bag fee be collected from customers for every bag used, which does include restaurants. In Louisville, restaurants have to collect the bag fee created by the City, but they will not have to collect the bag fee created by the State. Louisville is the only city the CRA is aware of that is requiring restaurants to charge a bag fee at this time. (March 2023

We have created a one-pager (en Español) to further illustrate your exemption from these new laws. You may refer to this in any instance of doubt regarding whether this fee applies to your customers. 

If you have any questions, please reach out to us at info@corestaurant.org. 

 

• 2023 Minimum Wage Rates

Effective January 1, 2023, the State minimum wage is $13.65 per hour, with a tipped wage of $10.65 per hour. (Note: Denver minimum wage is $17.29 per hour, with a tipped minimum wage of $14.27 per hour.)

Overtime Exemption Threshold

Beginning January 1, 2023, employees must be paid a salary of AT LEAST $961.54 per week (which equates to $50,000 annually) to be EXEMPT from overtime. Importantly, tips DO NOT count towards this total salary and hourly workers are never exempt from overtime. They must also meet the duties test for exempt employees to be exempt from overtime, which is not changing. 

Find the duties test here, and required exempt salary increases below:

• January 1, 2022: $865.38/week ($45,000 per year)
• January 1, 2023: $961.54/week ($50,000 per year)
• January 1, 2024: $1,057.69/week ($55,000 per year)
• January 1, 2025: The 2024 salary adjusted by CPI

Reach out to us at info@corestaurant.org with any questions.

 

• Paid Family and Medical Leave Insurance (FAMLI) Payments Began January 1

As many of you know, payments into the state’s paid Family and Medical Leave Insurance (FAMLI) Program, which will come from employers and employees, began with the start of the new year. It is important that your Colorado employees know that these payments will now be deducted from their paychecks as of January 1, 2023, and that FAMLI benefits will be available to them a full year later, as of January 1, 2024. 

Our Legal Resource Center partners at Fisher Phillips have created a helpful FAMLI FAQ to help you navigate these new requirements. 

 

• Colorado Secure Savings Program (CSSP) Update

As of January 1, 2023, employers have to provide information to their employees about the Colorado Secure Savings Program (CSSP).  The CSSP was established as a state-run retirement saving program. Employers with five or more employees who have been in business for two or more years and currently do not offer a retirement savings program will need to sign up with the CSSP. You will receive an email from CSSP with an access code when you are able to register. 

Once the program takes effect, it will be free to employers. You will only be required to be registered, provide an employee roster, and conduct payroll deductions; there will be no other employer obligations. Employees will be automatically enrolled (with the ability to opt out), and their contributions will come from payroll deductions. Unlike employer-sponsored retirement plans, employers will not have to pay to facilitate the plans and have no legal liability beyond facilitating employee enrollment. 

For more information about the program and how to get registered, click here.

 

• Wine in Grocery and Convenience Stores

As of March 1, 2023, Colorado’s convenience and grocery stores that are currently selling full-strength beer can also sell wine. This change only impacts “fermented Malt Beverage Off-Premises Retailers.” There are no changes for restaurants and other on-premises licensees in Colorado. 

This change is a result of the passage of Proposition 125 on the 2022 ballot. 

Here is a bulletin from the Colorado Department of Revenue, Liquor Enforcement Division with more information. 

2022 Colorado Law Updates

What Local Restaurant Operators Need to Know

• Retail Delivery Fee

Effective July 1, 2022, the State of Colorado began imposing a fee on all retail deliveries of tangible personal property subject to state sales or use tax. The fee is $.27 per delivery, regardless of the number of items in the delivery, and applies to when the delivery is mailed, shipped, or otherwise delivered by motor vehicle to a purchaser.

The fee is to be collected by the retailer or marketplace facilitator who collects the sales tax for the transaction; this includes restaurants who deliver food and beverages by motor vehicle.

The fee is to be reported and remitted on the new DR 1786 form. Retailers that make retail deliveries must show the total of the fee on the receipt or invoice and label it “retail delivery fee.”

If all items in a retail sale are exempt from sales tax, the delivery is also exempt from the retail delivery fee. However, if even one item in the sale is subject to sales tax, then the fee must be collected.

If a restaurant or bar is using a third-party delivery company to make their deliveries, the third-party company should be the company that collects and remits the fee back to the Colorado Department of Revenue.

For more information about the retail delivery fee, click here.

 

• Restaurant Sales Tax Relief

In 2022, the Colorado Legislature passed a second round of legislation that allows restaurants to keep some of the state sales tax they collect. For the months of July, August, and September 2022, restaurants are allowed to deduct up to $70,000 from their taxable sales on their sales tax returns to the State of Colorado.

If a restaurant didn’t have $70,000 in taxable sales in one of the months where the deduction is allowed, then the restaurant is allowed to deduct their total taxable sales, as long as that amount doesn’t exceed $70,000.

Because most businesses in Colorado remit sales tax to the state on a monthly basis, these deductions will be taken on the return following each applicable month (ie, August, September, and October 2022).

For more information on how to file or how to amend a completed filing, click here.

 

• Termination Notifications

On May 25, 2022, Governor Polis signed Senate Bill 22-234 into effect, which made changes to the notification requirements employers must provide to employees when an employee leaves their position of employment.

Prior to the new law taking effect, Colorado employers needed to provide employees with a notice containing the following:

• That unemployment insurance benefits are available to unemployed workers who meet the eligibility requirements under Colorado law;
• Contact information to file a claim;
• Information the worker will need to file a claim; and
• Contact information to inquire about the status of their claim after it is filed

Under the new law, at the time of separation from employment, the employer must now also provide written information that includes:

• Employer’s name and address;
• Employee’s name and address;
• Employee’s ID number or the last four digits of their SSN;
• Employee’s first and last dates worked, year-to-date earnings, and wages for the last week worked; and
• Reason for separation

These new notification requirements apply regardless of wether the separation is voluntary or involuntary. You can read more about these new requirements thanks to our partners at Fisher Phillips.

 

• Credit Card Processing Fees

Starting July 1, 2022, businesses in the State of Colorado are allowed to add credit card processing fees onto a customer’s check if the customer pays with a credit card. The new law allows a business to charge the actual amount of credit card processing fees, up to 2% of the amount of the transaction. Businesses can only charge this on credit cards; if a customer uses a debit card, check, gift card, or cash, the business is not allowed to charge the customer processing fees.

In order for a business to charge the customer the cost of credit card processing fees, the business must post a sign in their business where it is visible to the customer that says the following:

“To cover the cost of processing a credit or charge card transaction, and pursuant to section 5-2-212, Colorado Revised Statutes, a seller or lessor may impose a processing surcharge in an amount not to exceed 2% of the total payment made for goods or services purchased or leased by use of a credit or charge card. A seller or lessor shall not impose a processing surcharge on payments made by use of cash, a check, or a debit card or redemption of a gift card.”

If you have questions about the credit card processing surcharge allowance, please email us at info@corestaurant.org.

 

What’s Coming in 2023….

• Family and Medical Leave Insurance

In 2020, voters in Colorado approved the establishment of a Family and Medical Leave Insurance (FAMLI) program for the state. This state-run program will provide partial wage replacement to employees who must take time off from work for a qualifying event, like the birth of a child, to bond with an adopted child, for medical treatment, and more.

The program is funded by both employees and employers. Starting on January 1, 2023, .9% of an employee’s annual salary must be remitted to the state to fund this program, with employees contributing .45% and employers contributing .45% (for a total of .9%).

While the payments begin on January 1, 2023, employees will not be able to take leave for a qualifying event until January 1, 2024.

The Colorado Department of Labor and Employment is still working through rulemaking on many of the parts of this program. We hope to have more details for businesses in the coming months, leading up to the January 1 start date for premium payments.

 

• Colorado Secure Savings Program

Also starting on January 1, 2023, employers will have to provide information to their employees about the Colorado Secure Savings Program. The Colorado Secure Savings Program was established as a state-run retirement savings program. Employers with five (5) or more employees who have been in business for two (2) or more years and currently do not offer a retirement savings program will have to register with the Colorado Secure Savings Program starting on January 1, 2023.

For more information about the program and how to get registered, click here.

SB22-234 Unemployment Compensation

What does it mean for restaurants? SB22-234 makes a one-time, $600-million appropriation using federal ARPA dollars to backfill the state unemployment insurance trust fund, which became completely insolvent due to pandemic-related lay-offs in the summer of 2020. This backfill was necessary to stabilize employer premiums and save small businesses, like restaurants, from the increase in costs associated with bringing the fund back to solvency.

The bill also:

• continues the COVID-19 allowance for undocumented workers to receive unemployment benefits after being separated from employment;
• repeals the requirement that an individual must wait at least one week before becoming eligible for unemployment compensation as long as the balance of the unemployment compensation fund is at least $1 billion;
• requires the division to study how to implement a dependent allowance for individuals receiving unemployment compensation;
• requires an employer to provide an employee with information about unemployment compensation at the time of separation from the employer (learn more);
• extends the suspension of the solvency surcharge through the calendar year 2023;
•  and requires the division to consider certain factors in determining whether repayment of overpaid unemployment compensation benefits would be inequitable.

We have been lobbying this issue and seeking a backfill to the state fund since fall 2021, when we testified before the interim committee expressing the dire need for this policy. We are thrilled that it has come to fruition.

Sponsors: Senators Chris Hansen (D) and Bob Rankin (R) and Representatives David Ortiz (D) and Marc Snyder (D)

SB22-097 Whistleblower Protection Health and Safety

What does it mean for restaurants? During the height of COVID-19, the legislature passed a bill that prohibits an employer from taking adverse action against an employee who, in good faith, raises a reasonable concern about workplace safety violation or other significant workplace health and safety threats. SB22-097 continues those protections in perpetuity. We monitored this bill closely to ensure that it would not be expanded to unduly burden employers and are comfortable that it will not.

Sponsors: Senators Brittany Pettersen (D) and Robert Rodriguez (D) and Representatives Leslie Herod (D) and Tom Sullivan (D)

SB22-230 Collective Bargaining For Counties

What does it mean for restaurants? SB22-230 is the long-awaited collective bargaining bill, which was introduced to include all public employees, including those in higher education and those employed by quasi-governmental entities. The proponents faced staunch opposition to the proposal from the very beginning, and ultimately the bill was pared back to include just county employees. County associations lobbied the bill hard and it was only able to pass in the final hours of session with serious amendments limiting it to just the largest counties.

We kept a very close eye on this bill because although it was not related to the private sector, any proposal that streamlines collective bargaining activity is of great interest and we have seen proponents pass this type of legislation for the public sector before moving on to the private sector.

Sponsors: Senators Stephen Fenberg (D) and Dominick Moreno (D) and Representative Daneya Esgar (D)

SB22-161 Wage Theft Employee Misclassification Enforcement

What does it mean for restaurants? SB22-161, led by the subcontractor construction industry, was introduced in response to several wage theft victims working on multi-million-dollar construction projects. Advocates for the policy claimed that undocumented workers on these projects had been exploited and worked without being paid, and that there was no way for them to seek damages as the projects had gone completely bankrupt. The bill ultimately changes the way that wage-theft claims and enforcement are handled within the Colorado Department of Labor and Employment and creates a new enforcement unit within the Attorney General’s office.

We feel strongly that wage theft is an abhorrent practice and that bad actors must be held accountable, but the bill as introduced stretched too far and impacted ethical businesses along with the bad actors. We worked to adopt the following amendments to the proposal to make it more business-friendly:

As Introduced	After Amendments
The bill repealed the employer’s ability to recover reasonable costs and attorney fees incurred in actions.	The amendments made attorney fees available for employers who prevail in wage theft complaints.
The bill made investigations of class claims by the Colorado Department of Labor and Employment mandatory.	The amendments made those investigations discretionary, and the bill offers no additional appropriation of funds for these investigations.
The bill made per day damages for unpaid wages $100/day.	The amendments made per day damages for unpaid wages $50/day.
The bill mandated triple damages for retaliation.	The amendments softened to double damages for retaliation.
The bill as introduced included an entire section mandating new health and safety guidelines for workplaces.	An amendment removed this section from the bill entirely.

In addition to the amendments above, we fought to keep the existing 14-day safe harbor that exists for employers, which allows an employer to make an employee whole with any lost wages within 14 days before being served with a notice or action based on those lost wages.

Sponsors: Senators Jessie Danielson (D) and Sonya Jaquez Lewis (D) and Representatives Monic Duran (D) and Meg Froelich (D)

SB22-193 Air Quality Improvement Investments

What does it mean for restaurants? SB22-193 provides significant one-time funding ($120 million) for the purpose of reducing air pollution. The bill creates an industrial and manufacturing operations clean-air grant program for private entities and would award funds to local governments, tribal governments, and public-private partnerships to invest in voluntary projects to reduce air pollutants from industrial and manufacturing operations.

The CRA supported this bill, specifically because of the ability to voluntarily invest in projects to reduce air pollutants, as we are always in favor of incentives rather than mandates for businesses.

Sponsors: Senators Stephen Fenberg (D) and Julie Gonzales (D) and Representatives Alex Valdez (D) and Meg Froelich (D)

HB22-1355 Producer Responsibility Program for Recycling

What does it mean for restaurants? This bill establishes a Producer Responsibility Organization, housed in the Colorado Department of Public Health and Environment, which is responsible for developing and managing a statewide recycling program. This program would be paid for by fees assessed to the producers of recyclable packaging materials, which translates to the company who first sells the product in Colorado.

The CRA worked to amend this legislation to match what other states have done by exempting restaurants from the definition of “producer” and therefore exempting restaurants from the requirements in the bill. Once that amendment made it onto the bill, the CRA was neutral on this legislation.

Sponsors: Representative Lisa Cutter (D) and Senators Kevin Priola (R) and Julie Gonzales (D)

What do the following bills mean for restaurants? In 2021, following an influx of federal ARPA dollars, the General Assembly appropriated $400 million to address the affordable housing crisis throughout the state and created an associated task force to recommend policy solutions. The following bills are the result of the task force recommendations and ARPA funding.

The CRA lobbied in support of all the below bills, as we have heard from restaurateurs across the state that the affordable housing crisis has created significant workforce challenges.

Affordable Housing Solutions | Total Allocated: $399,800,000

• HB22-1282: The Innovative Housing Incentive Program will invest funds to encourage and support the construction of innovative forms of affordable housing in Colorado, including modular, prefabricated, and manufactured homes.
• SB22-146: Middle Income Access Program Expansion will support the Colorado Housing and Finance Authority’s middle-income access program, which is designed to provide financing to developers seeking to build affordable rental housing to Coloradans with an 80% area median income and above, which fills a support gap within the marketplace.
• SB22-159: Revolving Loan Fund Invest Affordable Housing will create a revolving loan program to help finance affordable housing projects as well as energy improvements. One of the aims is to improve non-traditional housing in areas where COVID-19 hindered housing affordability and availability.
• SB22-160: Loan Program Resident-owned Communities puts funds toward grants to local governments and nonprofits around the state to buy land and develop affordable housing.
• HB22-1304: State Grants Investments Local Affordable Housing creates two grant programs: 1) the local investments in transformational affordable housing grant program, and 2) the infrastructure and strong communities grant program.

HB22-1350 Regional Talent Development Initiative Grant Program

What does it mean for restaurants? HB22-1350 establishes a regional talent development grant program to fund talent development initiatives across the state to meet regional labor market needs, including workforce development needs as regions recover from the negative impacts of COVID-19.

We lobbied in support of this bill in the hopes that regional programs like this could increase access to a pipeline of restaurant workers and address the ongoing labor shortage.

Sponsors: Representatives Julie McCluskie (D) and Janice Rich (R) and Senators Jeff Bridges (D) and Paul Lundeen (R)

SB22-140 Expansion of Experiential Learning Opportunities

What does it mean for restaurants? This bill requires the Colorado Department of Labor and Employment to provide incentives to eligible employers to create high-quality, work-based learning opportunities for adults and youth.

The CRA supported the bill in the hopes that restaurants could qualify as eligible employers under the program and offer work-based learning opportunities as a workforce solution.

Sponsors: Senators James Coleman (D) and Bob Gardner (R) and Representatives Barbara McLachlan (D) and Judy Amabile

HB22-1406 Qualified Retailer Retain Sales Tax

What does it mean for restaurants? HB22-1406 provided another temporary sales tax deduction for the foodservice industry for the months of July, August, and September 2022. Just like the previous two rounds of pandemic-related sales tax relief, restaurants and other businesses in the foodservice industry will be able to deduct from their state taxable sales $70,000 for each of these months. For businesses with multiple locations, the deduction will be usable on up to five locations.

The CRA supported this legislation and actively worked to draft and pass this bill as the lead proponent.

Sponsors: Representatives Leslie Herod (D) and Dylan Roberts (D) and Senators James Coleman (D) and Nick Hinrichsen (D)

HB22-1415 Repeal Registered Manager Requirement Liquor Licensees

What does it mean for restaurants? HB22-1415 made changes to the registered manager requirements that exist for Hotel and Restaurants, Tavern, and Lodging & Entertainment liquor licenses. When this bill is signed into law, these three types of liquor license holders will no longer have to put their manager through a background check and fingerprint process and there will no longer be a requirement in state law to have any kind of hearing for a registered manager. Instead, these three liquor licenses will have the same requirements as all other on-premises liquor licenses, which means that if their manager changes, they will simply have to notify the state and local licensing authorities of who the new manager is and pay a $30 fee to the state and $30 to the local authority (instead of the current $75 fee).

The CRA supported this legislation and worked hard to get the bill drafted, introduced, and passed with no votes in opposition.

Sponsors: Representatives Shannon Bird (D) and Hugh McKean (R) and Senators Rachel Zenzinger (D) and Paul Lundeen (R)

SB22-115 Clarify Terms Related to Landowner Liability

What does this mean for restaurants? SB22-115 changed the liability for businesses and declares that the Colorado Supreme Court decision in the Rocky Mountain Planned Parenthood, Inc. vs. Wagner case should not be relied upon to a certain extent. In this case, the court determined that Rocky Mountain Planned Parenthood should have known they could have been a target for a shooting and therefore, they should have had more protection. The concern with this precedent is that it would have applied to all businesses, meaning that if a restaurant should have known they could be a target of a shooting, they would have to put in safety protocols to prevent it, even if there was never a direct threat against the establishment.

The CRA supported this legislation because it takes the precedent back to what it was meant to be prior to the Supreme Court case.

Sponsors: Senators Sonya Jaquez Lewis (D) and Bob Gardner (R) and Representatives Matt Soper (R) and Kerry Tipper (D)

The changes affecting restaurants from the 2021 State Legislative Session

The changes affecting restaurants from the 2020 State Legislative Session

The changes affecting restaurants from the 2019 State Legislative Session

The changes affecting restaurants from the 2018 State Legislative Session

The changes affecting restaurants from the 2017 State Legislative Session