Colorado has recently implemented several employment laws that may have a major impact on your organization. Here’s what Colorado employers need to know about state compliance in 2025.
How Has Colorado’s Minimum Wage Changed in 2025?
Colorado’s minimum wage increases annually based on inflation. Additionally, cities within Colorado can set their own local standards, so long as they’re no less than the statewide minimum.
It’s important for Colorado employers with multiple offices or locations throughout the state to make sure their starting wages are locally compliant.
Here are the top examples:
- Colorado Statewide Minimum Wage: $14.81/hour
- Colorado Tipped Minimum Wage: $11.79/hour
- Boulder Minimum Wage: $15.57/hour or $12.55/hour for tipped employees
- Denver Minimum Wage: $18.81/hour or $15.79/hour for tipped employees
- Edgewater Minimum Wage: $16.52/hour or $13.50/hour for tipped employees
For tipped workers, employers must ensure that wages plus tips meet or exceed the full minimum wage. If they do not, you’re required to make up the difference.
If you find that tipped employees frequently do not meet minimum wage requirements, consider revisiting your compensation system.
What Are Colorado’s Overtime and Break Requirements?
Colorado’s overtime laws mandate time-and-a-half pay for non-exempt employees working more than 40 hours in a workweek or over 12 hours in a single day.
Employees are entitled to a 30-minute unpaid meal break after 5 hours of work. If the nature of their job prevents a duty-free break, this meal break must be paid. Employees are also entitled to a paid 10-minute rest break for every 4 hours worked, ideally in the middle of the working period.
The Pregnant Workers Fairness Act (PWFA) can impact break requirements for pregnant employees or those who have recently given birth. Under the act, eligible workers may be entitled to longer or more frequent breaks for trips to the bathroom, getting food or water, or resting.
Download our free HR compliance guide
Learn how to measure HR success, develop compliance strategies, and grow your career.
What Is Family and Medical Leave Insurance (FAMLI)?
One of the most significant updates for Colorado employers is the Family and Medical Leave Insurance (FAMLI) program. Established by the Colorado Family Leave Act, FAMLI allows employees to take up to 12 weeks of state-paid leave for qualifying reasons such as medical issues, childbirth, or caregiving responsibilities.
- Eligibility: Unlike the federal Family and Medical Leave Act (FMLA), there is no waiting period. Employees are eligible from day one of employment.
- Employer Coverage: The program applies to all employers with at least one qualifying employee.
- Interactions With Employer Benefits: Employers offering paid parental or medical leave must carefully coordinate these benefits with FAMLI to ensure compliance and clarity.
Educate your workforce about their rights under FAMLI and ensure proper payroll contributions to the program. FAMLI is still new, so changes and clarifications may arise.
What Is HFWA Paid Sick Leave?
In addition to Colorado’s comprehensive and generous FAMLI leave law, the state’s Healthy Families and Workplaces Act (HFWA) requires employers to provide workers with one hour of paid leave for every 30 hours worked, up to a maximum of 48 hours per year.
HFWA covers bereavement time, caring for children or family members due to school or care home closures, and evacuations due to inclement weather. Unlike FAMLI’s partial percentage, HFWA requires employers to provide full wage replacement.
Employers need to be mindful of how these policies interact and clarify which type of leave an employee intends to use. Keep in mind that both policies are separate from federal, unpaid FMLA time, which employees can also use.
It’s also a good idea to train your HR management team on tracking leave requests and usage. When employees have access to so many options, managing different types of leave can become a challenge. Make sure your current system accommodates all required types.
Does Colorado Have Specific Hiring and Firing Guidelines?
Colorado’s labor laws emphasize fairness and transparency in hiring and firing. Although Colorado is an at-will employment state, employers are still required to demonstrate sound judgment in termination decisions to avoid wrongful termination claims.
Terminations based on discrimination or retaliation are considered wrongful terminations. Employers can be penalized for engaging in wrongful termination, which is why it’s so important to keep detailed records of past disciplinary actions and policy violations.
Additionally, Colorado drug testing laws can be confusing due to the state’s legalization of recreational cannabis. Although adults in Colorado can lawfully purchase, possess, and use cannabis, employers don’t have to allow their employees to use cannabis. You can still provide drug testing at your own discretion and implement drug-free workplace policies.
Does Colorado Have a Biometric Data Privacy Law?
Colorado’s biometric data law imposes new obligations on employers who collect or process biometric information. Biometric identifiers include anything derived from physical, behavioral, or biological characteristics, such as fingerprints, voice recognition, and facial recognition.
Employers must obtain written consent from employees before collecting biometric identifiers. They must also develop and maintain a biometric data policy outlining how the data is collected, stored, used, and destroyed.
Things like fingerprint reading (the kind you can use instead of a password on a smartphone) are much more common than they used to be. If you currently use security measures like fingerprint reading or intend to upgrade to technology that uses other kinds of biometric data, make sure you have a compliance plan in place.
What Are Colorado’s Noncompete and Nondisclosure Agreements?
Recent legislation has tightened restrictions on noncompete and nondisclosure agreements in Colorado.
Colorado considers a “restrictive employment agreement” to be anything an employer might ask an employee to sign that inhibits their ability to work elsewhere if they are terminated from or voluntarily leave the company.
Noncompete agreements are only enforceable for high-wage employees who earn at least $127,091 a year. Noncompete agreements cannot be broader than necessary and can only be used to protect trade secrets. Any document an employee signs must have a very narrow and legitimate focus.
Additionally, you must ensure all agreements comply with Colorado’s Protecting Opportunities and Workers’ Rights (POWR) Act, which governs nondisclosure clauses related to discrimination or unfair employment practices. Agreements must include information that demonstrates their compliance with this law.
Is Colorado a Right-To-Work State?
Colorado operates under a modified right-to-work framework, which can require employees to join a union or pay dues as a condition of employment. However, a two-step election process is mandated to implement such an agreement. Without a supermajority, union membership and dues cannot be compulsory.
When a union seeks to establish an all-union agreement, employers should be prepared to facilitate the required election process and honor the outcome.
What Can Colorado Employers Do To Stay Compliant?
With increased compliance requirements around the corner, make sure your whole team is on the same page. Your HR department plays an important role in managing compliance — here’s what they can do to help you stay compliant.
Update Employee Handbooks for 2025
When laws change or new policies are adopted, it’s important to refresh your Colorado employee handbook to reflect these updates.
As an employer, it’s your responsibility to make employees aware of their rights and responsibilities. You’ll also want to clarify how workplace policies have changed or been updated to accommodate any new laws.
For help building and maintaining a compliant handbook, look no further than Employee Handbooks from Mosey. This tool can automatically detect state and local legislative changes, allowing you to update your policies with just a click. Create a fully compliant handbook in all 50 states, including Colorado.
Not 100% sure about Colorado labor laws?
Get a free consultation with our team of experts and learn how Mosey can manage it for you with automated handbooks.
Perform Compliance Audits
Conduct regular compliance audits, especially for wage, hour, and leave policies. Compliance audits can help you spot gaps in your system before they become an issue. If you feel like your current strategy isn’t working as it should, an internal audit can give you the data you need to make tailored adjustments.
If you find that you have to make a lot of changes, consider quarterly compliance audits rather than annual ones. Think about the needs of your organization and your long-term growth plans when planning your schedule.
Schedule a Training Session
Ensure supervisors and your HR team understand changes to FAMLI, biometric data laws, and any other new policies that impact your workplace. Consider adopting new tools or systems to keep track of changing compliance requirements, like Mosey.
Master Compliance With Mosey
Mosey helps Colorado employers track state and local requirements across HR, payroll, tax, and entity compliance while never missing a deadline. Manage Colorado state and local labor laws with ease so you can focus on growing your business.
Schedule a demo with Mosey today to learn how we can streamline compliance in Colorado and beyond.
