Colorado Implements Changes to Wage and Hour Rules for 2026

Quick Hits

• On January 1, 2026, Colorado’s state minimum wage increased from $14.81 to $15.16 per hour.
• Employers will be required to keep records for each employee’s amount of vacation hours and paid sick leave accrued and used.
• Local governments are now allowed to set a tip credit that is higher than the state’s tip credit.

These legal changes may impact Colorado employers in 2026:

• Colorado’s minimum wage for nontipped workers is $15.16 per hour for most employers, as of January 1, 2026. Counties and cities may have a higher minimum wage than the state.
• Colorado’s minimum salary basis for exempt positions is $1,111.23 per week ($57,784 rounded annual equivalent).
• House Bill (HB) 25-1001 updated the definition of “employer” to include “each individual who owns or controls at least 25 percent of the ownership interests in an employer” unless that minority owner “demonstrates full delegation of its authority to control day-to-day operations of the employer.” This law took effect on August 6, 2025.
• HB 25-1001 also permits the director of the Division of Labor Standards and Statistics (DLSS) to adjudicate wage-claim cases for up to $13,000 of unpaid wages for cases filed from July 1, 2026, through December 31, 2027, and in an amount specified by the director of the division to adjust for inflation beginning January 1, 2028. (Previously, the maximum was $7,500.) The DLSS will publish on the division’s website the names of all employers found to be in violation (with unpaid wages) and whether the violation was willful.
• State regulations were amended to require employers to maintain accurate records, for each employee, with the number of vacation hours accrued, used, and available for use during the current benefit year; and the number of paid sick leave hours accrued, used, and available for use during the current benefit year under the Colorado Healthy Families and Workplaces Act. This took effect on February 1, 2026.
• HB 25-1208 allows (but does not require) local governments to set a tip credit higher than the state tip credit of $3.02, as long as the local tipped minimum wage is at least the state tipped minimum wage. This law took effect on January 1, 2026.

Next Steps

Employers in Colorado may wish to review their payroll policies and practices to ensure they adhere to recent changes to wage-and-hour rules in the state. They may wish to coordinate with their third-party payroll administrator to confirm compliance with state and local laws regarding minimum wage, paid leave, and tip credits.

In Colorado, it is illegal to retaliate against an employee for reporting a complaint about unpaid wages or a violation of the state paid sick leave law.

Ogletree Deakins’ Denver office will continue to monitor developments and will provide updates on the Colorado, Leaves of Absence, and Wage and Hour blogs as new information becomes available.

David L. Zwisler is a shareholder in Ogletree Deakins’ Denver office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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