Navigating Colorado’s Evolving Employment Landscape: Key Updates for Employers (2020-2025)

by | Jul 11, 2025

Colorado’s employment law landscape has undergone significant transformations in the past five years, presenting new challenges for employers operating within the state. Staying abreast of these changes is crucial for compliance and more difficult to manage than ever.

As outside general counsel to startups and small businesses, Principle Law is frequently asked to intervene in employment disputes or review employment handbooks, policies and practices. Unfortunately, we frequently find that employers have difficulty keeping abreast of the rapidly changing employment requirements and implementing changes in their organizations to become or remain compliant to minimize the risk of employment liability.

Therefore, this article summarizes the most impactful updates since 2020, focusing on wage and hour regulations, paid leave, anti-discrimination provisions, and employer benefits requirements.

Please reach out to Principle Law for a free consultation should you find that your employment practices are not currently compliant or if you have questions about your employment obligations following your review of this article.

 

I. Wage and Hour Laws: Dynamic Adjustments and Stricter Enforcement

The last half-decade has seen continuous adjustments to Colorado’s minimum wage and heightened scrutiny on wage and hour compliance.

  • Minimum Wage Increases and COMPS Orders: Colorado’s minimum wage has steadily increased, with local jurisdictions often setting higher rates. The Colorado Overtime and Minimum Pay Standards (COMPS) Orders have been regularly updated (e.g., COMPS Order #39, effective January 1, 2024), impacting minimum wage, overtime calculations, and defining “time worked” as:

(the) time during which an employee is performing labor or services for the benefit of an employer, including all time s/he is suffered or permitted to work, whether or not required to do so.”

This is effectively a memorialization of existing common law principles effective in Colorado (see, for example, HCA-HealthONE LLC v. Colorado Department of Labor and Employment, Division of Labor Standards and Statistics, 474 P.3d 162 (2020), holding that employees should have been compensated for work performed by employees during a meal period). However, inclusion of this principle in the COMPS Order shows an increase in emphasis by the Colorado Department of Labor and Employment on ensuring that all time worked on behalf of an employer is compensated.

  • Expanded Employer Liability and Penalties for Wage Violations: Ensuring accurate and complete pay is more important than ever. Recent legislation, such as House Bill 25-1001 (effective August 6, 2025), significantly strengthens enforcement mechanisms and expands employer liability under the Colorado Wage Act. Penalties for misclassification of employees as independent contractors have escalated, ranging from $5,000 to $50,000 per affected employee, depending on the severity and recurrence of the violation. The maximum award for administrative wage claims before the CDLE has also been substantially increased. Furthermore, the definition of “employer” has been broadened to include individuals owning or controlling at least 25% of a business, unless they can demonstrate full delegation of day-to-day operations. Public disclosure of violations and reporting to licensing authorities are now also possibilities for non-compliant employers. See:
  • Overtime Exemptions and Regular Rate of Pay: The salary threshold for executive, administrative, and professional employees to qualify for overtime exemption under Colorado law continues to be higher than the federal standard. Employers should also note the Colorado Supreme Court’s ruling in Hamilton v. Amazon.com Services LLC, 2024 CO 29 (Colo. 2024), which mandates the inclusion of holiday incentive pay in the regular rate for overtime calculations, a departure from federal law.

 

II. Paid Leave: Comprehensive and Expanding Programs

Colorado has established robust paid leave programs, most notably the Family and Medical Leave Insurance (FAMLI) Act and updates to the Healthy Families and Workplaces Act (HFWA).

  • Family and Medical Leave Insurance (FAMLI) Act: Approved by voters in 2020 and fully implemented in 2024, the FAMLI program provides eligible employees with up to 12 weeks of paid leave for family or medical reasons, with an additional four weeks for pregnancy or childbirth complications. Employers began premium deductions in 2023. Recent amendments (Senate Bill 25-144, effective August 7, 2025, for certain provisions) have expanded FAMLI, granting an additional 12 weeks of paid leave for a parent whose child is receiving inpatient care in a neonatal intensive care unit (NICU), for claims arising on or after January 1, 2026. The premium rate also saw adjustments for future years. FAMLI leave generally runs concurrently with FMLA leave where applicable, but FAMLI covers a broader range of workers and reasons for leave.
  • Healthy Families and Workplaces Act (HFWA): Beginning January 1, 2021, the HFWA mandates paid sick leave for all employees in Colorado, at the rate of one hour per every 30 hours worked, up to a maximum of 48 hours per year. The Act specifies the permissible uses for this leave, including illness, care for family members, and public health emergencies. Amendments to HFWA have expanded the permissible uses for leave, including addressing immediate safety needs related to domestic violence and/or sexual assault.

 

III. Anti-Discrimination and Transparency: Broadening Protections and Disclosures

Colorado has continued to expand its anti-discrimination laws and enhance transparency requirements in employment.

  • Equal Pay for Equal Work Act (EPEWA): Updates to this Act intended to ensure equal pay and pay transparency include stricter requirements for pay transparency, mandating that employers disclose salary ranges in all job postings and provide written justifications for any pay disparities. The Act also extends the statute of limitations for claims from three to six years. Furthermore, it now requires employers to notify existing employees of all “job opportunities” (not just promotional opportunities) and disclose the application window’s anticipated closing date. See:
  • Colorado Anti-Discrimination Act (CADA) Updates: CADA has seen several expansions. The “Kelly Loving Act” (House Bill 25-1312, effective May 16, 2025) clarifies that discrimination based on gender expression includes an employee’s “Chosen Name” and “How the Individual Chooses to be Addressed.” While it stopped short of explicitly making “misgendering” a per se violation, such actions could serve as evidence of discrimination. Additionally, House Bill 25-1239 (effective May 22, 2025) expanded remedies for public accommodation claims, particularly for individuals with disabilities, allowing for attorney’s fees, costs, and damages. The definition of “employee” under CADA has also been expanded to include individuals in domestic service. The statute of limitations for filing a discrimination charge with the Colorado Civil Rights Division (CCRD) was extended from 180 to 300 days. See:

 

IV. Employer Benefits and Miscellaneous Updates

Beyond traditional employment laws, Colorado has also implemented initiatives and regulations impacting employer benefits and other aspects of the workplace.

  • Colorado SecureSavings Program: Launched in 2023, the Colorado SecureSavings Program is a state-run retirement savings program. It generally requires eligible employers (registered in CO, in business for at least two years, and with at least five employees who have worked at least 180 days) that do not already offer a qualified retirement plan to either offer one or enroll their employees in the state-sponsored Roth IRA program. The program is designed to simplify retirement savings for employees through automatic payroll deductions. Employers do not contribute to the program and have no administrative burden beyond facilitating payroll deductions. See:
  • Non-Compete and Restrictive Covenant Amendments: Colorado has significantly limited the enforceability of non-compete agreements since August 10, 2022, primarily restricting them to “highly compensated employees” who meet a specific annual earnings threshold (e.g., $127,091 annually in 2025). House Bill 24-1324 further enhanced the Attorney General’s enforcement authority over restrictive employment agreements and set guidelines regarding the recovery of employee education and training expenses. See:
  • Artificial Intelligence (AI) in Employment Decisions: While facing ongoing debate and potential federal preemption, the Colorado AI Act (Senate Bill 24-205) is set to apply to businesses using AI for certain employment purposes (e.g., hiring, retention, promotion). It will require notification to individuals when AI is used in decisions affecting them and provide rights to correct data and appeal adverse AI decisions.

 

The past five years have undeniably reshaped the employer-employee relationship in Colorado, with a clear trend toward expanded worker protections, increased transparency, and stricter enforcement. We find that, when our clients or prospects approach us for review of their employment handbooks, policies, and practices, more often than not, they are not compliant with current legal requirements in Colorado. Employers are well-advised to regularly review their policies and practices to ensure full compliance with these dynamic and evolving requirements.

Contact Principle Law today to discuss an employment practices audit to ensure that your business practices are consistent with Colorado’s ever-changing legal employment landscape.