Under 7 CCR 1103-7 Rule 2.17.1, the Colorado Department of Labor and Employment (CDLE) is defining “vacation pay” as pay for leave, regardless of its label, that is usable at the employee’s discretion (other than procedural requirements such as notice and approval of particular dates), rather than leave usable only upon occurrence of a qualifying event (for example, a medical need, caretaking requirement, bereavement, or holiday).
Employers wishing to avoid the risk of leave being interpreted as vacation pay, the leave would need to be based on the occurrence of a particular qualifying event like time off for an event such as picking up a child or an appointment that cannot be made outside business hours.
Personal time that is broadly able to be used at an employee’s discretion runs under the current rules of the CDLE would most likely be interpreted as vacation pay, and employers may be surprised to learn that it must paid out on termination. A way to avoid this would be to define the reasons personal time off may be taken.
Employers Council members have access to the sample personal leave of absence policy and a personal time off policy that does not allow broad employee discretion. Employers with an Employers Council Consulting or Enterprise membership and members who have not renewed under the new member model may contact an Employers Council staff to discuss their policy language.
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