Colorado’s New Labor & Employment Laws: What Employers Need to Know

Atlas Team
Aug 14
3 min read

This past week, Colorado enacted several bills that introduce new requirements and labor standards for employers. These changes will require businesses to adapt quickly.

Here’s a breakdown of the most notable bills signed by the Governor this legislative session.

1. Changes to the Paid Family and Medical Leave Insurance Act (FAMLI) — SB 25-144

Starting January 1, 2026, FAMLI will change in two ways:

Additional leave for NICU care: An extra 12 weeks of paid family medical leave for parents of children receiving inpatient care in a neonatal intensive care unit (NICU).
Premium adjustments: FAMLI premiums will decrease from 0.9% to 0.88% of wages per employee in 2026. Future premiums will be set annually, not to exceed 1.2%.

2. Enforcement of Wage and Hour Laws — HB 25-1001

Effective August 6, 2025, with additional changes in 2026 and beyond.

Key updates include:

Expanded employer definition: Wage law penalties now apply to individuals with at least 25% ownership in an employer entity (except minority owners with no operational control).
Higher claim limits: Administrative claim caps rise from $7,500 to $13,000 (July 1, 2026–Dec 31, 2027), with further increases every two years for inflation.
Cost recovery in disputes: Employers who pay in good faith within 14 days may recover costs and attorneys’ fees if a court finds the claim “lacking substantial justification.”
Transparency: The CDLE will publish wage violation records online and notify licensing agencies if violations remain unresolved after 60 days.
Local enforcement: Cities and counties can enact and enforce stricter wage laws.
Expanded retaliation protections: Now applies to contractors, covers “good faith” compliance concerns, presumes retaliation if adverse action occurs within 90 days, and allows compensatory damages.
Worker misclassification penalties: $5,000 per offense; $10,000 if not remedied in 60 days; $25,000–$50,000 for repeat violations within five years.
Penalty waivers: CDLE may waive penalties if payment is made within 14 days of an administrative claim—unless the employer has a prior violation in the past five years.

3. Limitations on Restrictive Employment Agreements — SB 25-083

Effective August 6, 2025:

Physicians, dentists, and advanced practice registered nurses are exempt from noncompete and nonsolicitation agreements (regardless of pay level).
Healthcare providers can inform patients of their departure, provide new contact info, and advise them of their right to choose their provider.

4. Legal Protections for Transgender Individuals — HB 25-1312

Effective May 16, 2025:

The “Kelly Loving Act” confirms that a chosen name reflecting gender expression is protected under the Colorado Anti-Discrimination Act.

5. Local Governments & Tip Offsets — HB 25-1208

Effective July 1, 2025:

Local governments setting a minimum wage above the state level must apply a $3.02 tip offset.
Starting July 1, 2026, local governments may set their own tip offset amounts, provided tipped workers earn no less than the state minimum wage minus $3.02.

6. Agricultural Worker Access — SB 25-128

Effective May 29, 2025:

Repeals prior law allowing certain service providers access to agricultural workers on private employer property.
Employers still cannot block worker access to service providers offsite or prevent use of remote services (e.g., telehealth) onsite.

7. Future Workers’ Compensation Changes — HB 25-1300

Effective January 1, 2028:

Physician choice: Injured workers may choose any physician accredited by the Division of Workers’ Compensation (DWC), within certain distance limits.
Notification requirement: Employers must inform injured workers of their rights within 7 days of injury.
Medical request standards: Employers and insurers must follow DWC guidelines for approving treatment requests; failure to do so may result in mandatory approval.

Bottom Line

These legislative changes affect wages, benefits, employment agreements, worker protections, and compliance obligations for Colorado employers.

If you have questions about how these laws impact your business or need help ensuring compliance, Atlas’s team of accountants and CFOs can guide you through the changes.