Avoiding a Red Card in Colorado: Recent Colorado Employment Law Changes to Watch This Summer

Although Denver wasn't a host city for the World Cup this summer, Colorado is host to a number of new employment laws coming into effect soon after Spain's victory over Argentina in the final match.

The Colorado General Assembly's 2026 legislative session scored a number of new laws impacting employers with Colorado workforces, including artificial intelligence (AI) in hiring, wage-and-hour requirements, workforce reporting and other key changes coming into effect in August 2026. These changes take effect on varying timelines, with some already in force. Notably, several additional employment-related bills failed to advance to the next round this session. Below are some key developments employers should track to avoid being offsides on these new laws.

Flags for Key New Laws

A number of new laws impact the way Colorado employers will play the game in 2026 and beyond. Some of these laws are already in effect and require immediate attention, with others taking effect in August 2026 or during 2027. Even for laws with later effective dates, employers should begin proactively planning now to address updates to policies, procedures, technology or other workplace practices.

• Senate Bill (SB) 26-189 (Automated Decision-Making Technology): Going into effect January 1, 2027, SB 26-189 imposes new compliance requirements on employers using AI technologies in employment decisions. Colorado's bill leads the nation in its requirements at a time when additional regulations are being implemented in Connecticut, New York City and other states and municipalities are grappling with the use of AI in hiring. Employers should be aware of several key components of the new Colorado law.
  • This law applies when automated decision-making technology (ADMT) has a material influence on a consequential decision, such as screening applicant resumes or scoring candidate interviews.
  • Employers must provide applicants with clear and conspicuous notice that ADMT will be used in the application and decision-making process.
  • When ADMT materially influences an adverse outcome, employers must send a follow-up notice within 30 days explaining the decision made, the ADMT's role, how to request more information and the individual's rights.
  • Where there has been an adverse outcome, individuals may request correction of inaccurate personal data, as well as meaningful human review and reconsideration of the decision to the extent commercially reasonable.
  • Employers must also maintain compliance records for a minimum of three years after a consequential decision is made, including ADMT version identifiers, changelogs and documentation of material mitigation changes.
  • Employers also should ensure the developers of the ADMT are providing information about the ADMT's intended use, training-data categories, known limitations and risks, appropriate use, human review and any other information needed for notices.
  • Importantly, employers will be responsible for any violations of antidiscrimination laws that result from the use of ADMT and should conduct regular bias audits and monitor ADMT output for potentially discriminatory results.
• House Bill (HB) 26-1207 (Disclosure of Demographic Workforce Data): Starting July 1, 2027, HB 26-1207 will amend 7-90-501, C.R.S., et seq., to require employers with more than 100 employees to report EEO-1 demographic workforce information to the Secretary of State on an annual basis.
  • The information collected will be in the same form as the U.S. Equal Employment Opportunity Commission's (EEO) "Employer Information Report," Federal Form EEO-1 as it existed on March 1, 2026.
  • The EEO-1 report will categorize employees by race, ethnicity, gender and job category.
  • This law is a continuing requirement, even if the federal government repeals or discontinues federal EEO-1 reporting requirements.
• HB 26-1045 (Antidiscrimination and Service Animals): Going into effect August 12, 2026, HB 26-1045 provides further guidance on reasonable accommodations for individuals with disabilities as it pertains to assistance animals.
  • The new law broadly defines "assistance animals" to include both service animals and emotional support animals (ESAs), expanding the scope of protection in housing.
  • The law also creates a presumption that allowing an assistance animal is a reasonable housing accommodation, but housing providers may still request reasonable documentation demonstrating the disability-related need for the animal.
  • Additionally, blanket bans on assistance animals are now presumed discriminatory. Housing providers may not presume an assistance animal poses a direct threat or risk of property damage and must instead base any determination on specific, individualized conduct.
  • Employers that provide housing to employees, as well as those providing residential housing, should ensure that any requests for assistance animals are evaluated through an individualized, interactive process rather than using categorical policies.
• Adopted 2026 Colorado Overtime and Minimum Pay Standards Order (COMPS Order) #40: The most significant update to Colorado wage and hour requirements, COMPS Order #40, went into effect February 1, 2026. Crucial components of the order include the following:
  • Employers must display the 2026 COMPS poster in areas frequented by employees. Employers must also include a copy of the Order or poster with employee handbooks or written policies, and if those handbooks or policies require a signed acknowledgement, employees must also sign an acknowledgement confirming receipt of the poster or Order.
  • Personal liability for wage violations has been expanded; any individual who owns or controls at least 25 percent of an employer's ownership interest is now considered an employer under the Colorado Wage Act.
  • Employers must maintain records documenting vacation pay hours and Colorado Healthy Families and Workplaces Act (HFWA) sick leave hours accrued, used and available. Upon employee request (up to once per month), employers must provide information on leave balance in writing or electronically.
  • For employees with variable compensation, HFWA sick leave pay is calculated at the rate the employee would have earned if the schedule is known – or using a 30-day lookback period if unknown. The lookback includes hourly rates, shift differentials, tip credits and commissions but excludes overtime, bonuses and holiday pay.
  • New rules under the Colorado Youth Employment Opportunity Act (CYEOA) require employers to obtain and retain additional documentation for minors (e.g., age certificates, work permits, exemption records) for three years after the minor turns 18 or employment ends. The rules also expand prohibitions on hazardous occupations for minors.

Family and Medical Leave Insurance Updates

There were two new updates to Colorado's Family and Medical Leave Insurance Program (FAMLI), both of which took effect on July 1, 2026.

• 7 Code of Colorado Regulations (CCR) 1107-9.7 (Regulations Concerning Appeals): The appeals process for challenging administrative decisions under the FAMLI Act have been amended with the changes to 7 CCR 1107-9.7. Hearing officers may now review and change decisions within five business days of issuance if there is a clear error or if leaving a decision unchanged would lead to an obvious unfair result.
• 7 CCR 1107-3.4 (Clarifications Regarding Use of Paid Family and Medical Leave Insurance Benefits): 7 CCR 1107-3 has also been amended. The newest update to 7 CCR 1107-3.4 now specifies that FAMLI benefits are restricted to absences that are caused by the qualifying conditions.
  • The bill clarifies that an absence is considered to be caused by a qualifying condition only when the absence would not have occurred but for that condition.
  • This change narrows the circumstances under which employees may qualify for FAMLI leave, requiring a direct causal connection between the qualifying condition and the requested leave.

Additional Notable Bills

Finally, some employers may be impacted by a few of the other bills passed during the most recent session focusing on specific sectors.

• SB 26-193 (Local Ordinances and State Employees): SB 26-193 was effective upon signing and clarifies that local minimum wage and related employment ordinances apply to private employers but generally do not apply to the state of Colorado where the wages are covered by a collective bargaining agreement. Additionally, the bill exempts the state from certain local occupational privilege taxes starting January 1, 2028.
• SB 26-160 (Personal Protective Equipment and Meatpackers): Adding to 8-4-101, Colorado Revised Statutes (C.R.S.), et seq., SB 26-160 became effective upon signing and prohibits employers from deducting expenses related to personal protective equipment from employee compensation or wages. SB 26-160 also requires employers with 500 or more employees engaged in the slaughter of livestock or rendering or packing of meat to provide employees with reasonable access to restrooms.
• SB 26-121 (Overtime Threshold for Agricultural Employees): Effective January 1, 2027, SB 26-121 reenacts and amends Section 8-6-120, C.R.S. to change overtime requirements for agricultural employees. Under the revised statute, agricultural employers must pay agricultural employees overtime pay for work in excess of 56 hours per workweek. Though this raises the threshold for number of hours needed to reach overtime pay, the changes also increase penalties for employers who violate overtime pay laws.
• HB 26-1113 (Modifications to Colorado's Voting Leave): HB 26-1113, which was effective on signing, changes the window in which employees who are registered voters may take paid leave to vote. Now, employers of all sizes must allow employees who are registered voters to take up to two hours of paid leave, one time, on any day that voter service and polling centers are open during an election. Previously, voting leave was required only on the day of the election. However, the provision that lets employers deny leave if an applicable employee has at least three consecutive hours during nonworking time while the polls are open remains unchanged. Employers should revise their voting leave policies accordingly.

Proposed Laws That Didn't Reach the Goal

Equally notable are several proposed bills were either vetoed or postponed indefinitely during the most recent General Assembly session. Four notable bills that employers may have been tracking did not become law this session:

• HB 26-1210 (Prohibit Surveillance Price and Wage Setting). HB 26-1210 was also vetoed by Gov. Jared Polis during the 2026 General Assembly session. HB 26-1210 sought to ban companies and employers from using AI and data-driven surveillance pricing and wage setting, meaning companies and employers would be unable to use personal data gathered through these surveillance methods to set prices or salaries. Gov. Polis vetoed HB 26-1210 over concerns that the broad language could create unintended consequences. According to his veto statement, the bill as proposed could punish businesses for lower prices resulting from the use of price setting surveillance algorithms and could discourage acceptable uses of advancing technology.
• HB 26-1319 (Right to Be Out at Work). HB 26-1319 was postponed indefinitely in April 2026. This bill would have expanded protections for individuals based on sexual orientation, gender identity, gender expression and gender status while also increasing training requirements for employers around inclusive workplaces, supporting the LGBTQ+ community and supporting transitioning coworkers when applicable. Even though this bill did not become law, employers are still bound by existing state and federal laws protecting sexual orientation, gender identity and gender expression.
• HB 26-1005 (Worker Protection Collective Bargaining). Polis vetoed the proposed HB 26-1005, a similar amendment to the Colorado Labor Peace Act as SB 25-005, which was vetoed during the 2025 session. This amendment sought to eliminate the requirement for a second election to negotiate a union security agreement clause in the collective bargaining process, shifting to a single collective bargaining process governed by an express duty to bargain in good faith.
• HB 26-1236 (Arbitration Reform). Polis also vetoed HB 26-1236, which intended to increase arbitration limits.
  • The bill would have made certain arbitration clauses unenforceable, including clauses requiring employees to pay arbitration fees significantly higher than court filing costs. It also would have imposed double damages on employers that failed to satisfy an arbitration award within 120 days and restricted arbitrators with policies or practices perceived as unfairly disadvantaging certain parties or attorneys.
  • Polis cited concerns that it would make arbitration less accessible and effective. In his veto statement, he emphasized his support for arbitration and expressed concern that the bill could discourage parties from utilizing arbitration.

What's Next

Colorado's employment law landscape continues to evolve, and the state is among the leaders in employment and related legislative changes. These changes present both new compliance obligations and potential cost-saving opportunities for employers operating in the state. Employers should review their practices to ensure compliance with laws already in effect and to prepare for those taking effect in August 2026 and further down the line in 2027.

For more information or questions on compliance with new Colorado labor and employment laws or a specific labor and employment matter, contact the authors.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.