Colorado Non-Compete Salary Threshold 2024

Colorado Non-Compete Salary Threshold 2024

Colorado Non-Compete Salary Threshold 2024

In 2021, Colorado passed a significant legislation regarding non-compete agreements that has continued to impact the state’s employment landscape. The law established a salary threshold for employees who are subject to non-compete agreements, aiming to protect workers in lower-wage positions. As we delve into 2024, it’s essential for both employers and employees to understand the implications of this law.

Understanding the Salary Threshold

Under the law, employees earning less than a defined salary threshold are exempt from non-compete agreements. In 2021, this threshold was set at $75,000 annually. However, as of 2024, this threshold has been adjusted to keep pace with inflation and cost of living changes. It’s crucial for businesses and workers alike to stay informed about this threshold to ensure compliance with the law.

Colorado Non-Compete Law 2023 Overview

The Colorado non-compete covenant statute underwent significant changes in 2024, fundamentally altering the legal landscape for non-compete agreements in the state. These amendments carry extensive implications for both employers and employees, fundamentally reshaping the dynamics of post-employment restrictions. The updates to the Colorado non-compete law have brought about a notable shift in the legal framework, thereby influencing how businesses and their workforce engage with employment contracts and navigate post-employment obligations and restrictions. These changes necessitate a thorough understanding of the updated legal landscape and strategic adaptations to ensure compliance and fair treatment of all parties involved.

Changes in Colorado Non-Compete Law 2024

Legal Updates

The recent changes in the Colorado non-compete law bring significant adjustments to the legal landscape governing non-compete agreements. These updates clarify the permissible scope and duration of non-compete agreements, as well as the conditions for enforcing them. Employers and employees now have explicit guidelines, emphasizing the importance of understanding and adhering to the revised provisions.

Furthermore, the modifications address the criteria for what constitutes a valid non-compete agreement, ensuring alignment with the new provisions of the law. Employers must proactively review and potentially revise existing agreements to comply with the updated legal requirements. This underscores the need for staying informed about the evolving landscape of non-compete agreements in Colorado and ensuring proactive compliance with the revised framework.

Overall, these adjustments necessitate careful analysis by employers and legal professionals to ensure adherence to the updated regulations, mitigate potential legal issues, and uphold fairness in employment practices.

Employer Obligations

Employers in Colorado are now subject to new obligations arising from the updated non-compete law. It’s crucial for businesses to comprehend and adhere to these fresh requirements, which may include providing additional disclosures or notifications to employees regarding non-compete agreements. Moreover, there are implications for businesses in terms of drafting and enforcing non-compete agreements, necessitating a thorough review of existing practices to ensure compliance with the reformed statutory framework.

Incorporating these changes into their operational policies is imperative for employers in Colorado to avoid potential legal ramifications and safeguard their interests. The proactive integration of these updated obligations into business practices can help mitigate legal risks and promote a fair and compliant working environment for both employers and employees. It’s essential for employers to stay informed about these obligations and take the necessary steps to align their practices with the revised legal requirements.

Implications for Employees and Employers

Employee Rights

The revised Colorado non-compete law significantly impacts the rights of employees in the state. With the new legal framework, employees are afforded greater protections and limitations concerning non-compete agreements. These changes aim to ensure that employees have the freedom to pursue employment opportunities without being unduly restricted by overly broad or unfair non-compete agreements. The law specifies that a non-compete agreement can only be enforced against a worker who earns at least $101,250 annually.

This salary threshold is an important factor that determines the applicability of non-compete agreements to employees in Colorado. Additionally, the new law removes nearly every exception to the general rule and voids most non-compete agreements, emphasizing the intent to protect the rights and mobility of employees. It’s essential for employees to understand their rights under the updated law, empowering them to make informed decisions about their career paths and job transitions.

Impact on Businesses

The updated Colorado non-compete law has far-reaching effects on businesses operating within the state. Employers must carefully assess and adapt their practices to align with the reformed statutory framework. The new law, signed by Governor Jared Polis, significantly limits the enforceability of non-compete agreements and introduces specific criteria for their application. Additionally, customer non-solicitation covenants are now only enforceable against workers who earn 60% of the “highly compensated” threshold.

This adjustment emphasizes the need for businesses to reconsider and potentially revise their existing non-compete agreements to comply with the updated legal requirements. Furthermore, under the Act, Colorado is the only state in the country that requires non-compete agreements to be provided as separate documents. This requirement adds an additional layer of responsibility for businesses to ensure compliance with the law while drafting and enforcing non-compete agreements.

Alternatives to Non-Compete Agreements

Understanding Alternatives

In light of the updated Colorado non-compete law 2024, it’s crucial for employers and employees to explore alternative methods for safeguarding business interests and employee rights. One effective alternative to traditional non-compete agreements is the utilization of non-solicitation agreements, which specifically prohibit employees from soliciting a company’s clients or employees after their departure.

This can be a more targeted approach that still protects the business without overly restricting employee mobility. Non-solicitation agreements can help maintain client relationships and prevent unfair competition while allowing employees to pursue new opportunities in their field.

Another viable alternative is the use of confidentiality agreements, which focus on protecting sensitive company information rather than limiting where an employee can work post-departure. These agreements can be an essential tool for protecting trade secrets, proprietary information, and intellectual property. By implementing these alternatives, businesses can still safeguard their proprietary information and client relationships while allowing employees more freedom in their career pursuits. This approach aligns with the intent of the reformed statutory framework to balance the protection of legitimate business interests with the rights and mobility of employees.

Best Practices

Employers navigating the reformed Colorado non-compete law should adhere to best practices when crafting equitable and efficient agreements. This entails crafting agreements that are reasonable in their extent and duration, designed to safeguard legitimate business concerns without excessively restricting employees. Furthermore, transparent communication with employees regarding these agreements is crucial to ensure comprehension and adherence.

Maintaining a delicate balance between the rights of employers and employees through these alternative arrangements is essential. Employers should aim to foster a workplace environment where business interests are safeguarded while also providing avenues for employees to advance professionally beyond their current positions.


The Colorado non-compete salary threshold for 2024 continues to shape the dynamics of employment and business practices within the state. As the legal framework evolves, it’s imperative for both employers and employees to remain informed and adapt their practices accordingly. Staying abreast of these developments ensures compliance with the law and fosters a fair and transparent working environment for all parties involved.

Read More: How to Effectively Manage Talent During a Merger and Acquisition

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Jennifer Tierney

Jennifer comes from a discipline of Operations, including Finance and Technology. Having worked in operational and financial management for more than fifteen years, Jen has a distinct set of skills and is known for complex analysis of operations, finance, and technology to improve core business strategies.

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