Colorado’s Department of Labor and Employment 2026 Update

John Agbonika, Associate

On February 1, 2026, two key rules from the Colorado Department of Labor and Employment (“CDLE”) took effect: The Colorado Overtime and Minimum Pay Standards (“COMPS”) Order #40 and the 2026 Publication and Yearly Calculation of Adjusted Labor Compensation (“PAY CALC”) Order.[1] Together, these rules set Colorado’s minimum wage and pay standards for the year.

What Are the COMPS and PAY CALC Orders?

            The COMPS Order outlines core wage and pay standards for covered employees. The PAY CALC Order is published annually and provides the statewide minimum wage, tipped employee wage rates, and the minimum salary thresholds for certain overtime exemptions.

What’s New in 2026?

            While many elements of the COMPS Order remain consistent from year to year, the 2026 version adds some employer requirements and adjusts the applicable minimum wage. The COMPS Order now requires employers to track and maintain records of vacation pay hours, and paid sick leave (including Healthy Families and Workplaces Act (HFWA) leave),[2] because those hours constitute earned wages.[3] These record keeping requirements do not significantly impact Colorado employers because the Colorado Wage Act and the HFWA already required employers to keep records of employees’ wages.[4] It is important to maintain these records because the law allows employees to request for the wage records, and employers must provide same upon request.[5]

            Employers must post the current COMPS Order poster in a conspicuous location where employees can easily access during the workday, or provide the poster/order directly to employees if physical posting is impracticable (such as for remote workers).[6] Employers must also distribute the poster/order to employees when issuing handbooks or written policies, including providing translated versions where required.[7]

            The 2026 PAY CALC Order incorporates the latest Consumer Price Index (“CPI”) adjustments[8] and increases the statewide minimum wage to $15.16 an hour unless a higher federal or local minimum wage applies.[9] Likewise, minimum salary basis for executive, administrative, and professional (“EAP”) employees increased to $1,111.23 per week ($57,784.00 annually), and for employees to qualify as highly compensated, they must now make at least $130,014.00 annually.[10] Employers subject to the federal salary basis must pay EAP employees no less than $684.00 per week ($35,568.00 annually) and highly compensated employees must be paid $107,432.00 annually.[11] Thus, an employer complies with Colorado and federal law by meeting the minimum salary thresholds under Colorado law.

            In practical terms, employers must ensure that all non-exempt employees are paid at least the new minimum hourly rate, and that exempt employees (such as EAP staff) meet the updated salary thresholds to continue qualifying as exempt under the COMPS Order.

Key Takeaways for Employers

With the COMPS and PAY CALC Orders now in effect, employers should take time to update payroll systems to account for new wage levels and maintain ample records of employee wages including vacation pay hours and other associated employee rights

[1] Available at https://cdle.colorado.gov/dlss/labor-laws-rules-resources/labor-rules-proposed-and-adopted.

[2] The HFWA sets the baseline for paid sick leave, and an employer does not need to provide additional HFWA paid sick leave if it already offers a paid sick leave policy that meets HWFA accrual and minimum leave requirements and the policy allows employees to use paid sick leave for the same purposes and under the same conditions as HFWA leave. See C.R.S. § 8-13.3-403(4).

[3] See 7 CCR 1103-1:7.1(F)-(G); see also Statement of Basis and Purpose (“SPB”) for COMPS Order #40 at p. 3. These requirements apply to an employer’s existing Paid Time Off (“PTO”) policies to the extent that they include accrued and available vacation pay hours.

[4] See C.R.S. § 8-4-101(14)(III) (wages include earned vacation pay); C.R.S. § 8-4-103(4.5) (requiring employers to retain records of information contained in an employee’s itemized pay statement); C.R.S. § 8-13.3-409(1) (requiring employers to retain information regarding hours worked and paid sick leave).

[5] See 7 CCR 1103-1:7.2.2.-7.2.3

[6] See 7 CCR 1103-1:7.4.1

[7] Id. at § 7.4.2

[8] The Colorado Constitution requires that the minimum wage be “adjusted annually for cost of living increases, as measured by the Consumer Price Index used for Colorado.” Colo. Const. art. XVIII, § 15. 

[9] See https://www.rockymountainemployersblog.com/blog/2025/12/11/colorados-2026-labor-and-employment-law-changes-what-employers-should-know-regarding-payroll-and-benefits-in-the-new-year. See 2026 PAY CALC Order, §§ 1.3, 2.2.

[10] Id. at § 1.2.1. The PAY CALC Order also provides that employers may pay tipped employees $12.14 per hour (to the extent that adding tips raises the total pay to minimum wage) and that non-emancipated minors must be paid $12.89 per hour. Id.

[11] U.S. Dep’t of Lab., Wage & Hour Div., Earnings thresholds for the Executive, Administrative, and Professional exemption from minimum wage and overtime protections under the FLSA, https://www.dol.gov/agencies/whd/overtime/salary-levels (last visited Feb. 5, 2026)