In 2025, Colorado enacted a series of employment law changes affecting wage and hour, leave entitlements, restrictive covenants, anti-discrimination protections, and AI. Some of these changes have already taken effect, and some will take effect in 2026. These legislative developments introduce new compliance obligations and heightened risks for employers, so Colorado businesses should stay informed and may wish to proactively review workplace policies and procedures.

Colorado Wage Act Amendments

Effective Aug. 6, 2025, HB 25-1001 amended the Colorado Wage Act (CWA) in several key respects, summarized below.

• Individuals owning or controlling at least 25% of a business are now liable under the CWA—unless they can prove full delegation of their authority to control day-to-day operations—broadening the definition of “employer” under the CWA.
  
• Colorado employers are now subject to automatic fines for misclassifying workers as non-employees (e.g., independent contractors) where the misclassification affects wage and hour or reporting obligations under the applicable laws, ranging from $5,000 for a first willful violation up to $50,000 for repeat, unremedied violations (to be increased on Jan. 1, 2028, and every two years thereafter to adjust for inflation), in addition to any other relief ordered; previously, no such automatic fines applied.
  
• The jurisdiction of the Colorado Department of Labor and Employment (CDLE) to investigate wage complaints claiming up to $7,500...

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