Effective February 1, 2026, the Colorado Department of Labor and Employment (CDLE) adopted COMPS Order #40 and related regulatory amendments affecting employer obligations under the CO Wage Act, Healthy Families and Workplaces Act (HFWA), and CO Youth Employment Opportunity Act (CYEOA). Employers operating in CO should review their compliance programs in light of the following changes.

 Expanded Definition of “Employer”

COMPS Order #40 broadens the definition of “employer” to include individuals who own or control at least 25 percent of an employer’s ownership interests. A minority owner may be excluded only if the employer demonstrates the owner has fully delegated authority over day-to-day operations. This change departs from the prior approach, which aligned the definition with the federal Fair Labor Standards Act.

 Local Tip Credit Adjustments

The amended regulations now permit local governments that have adopted a minimum wage higher than the state minimum to authorize a higher tip credit, consistent with 2025 statutory amendments. Employers must still ensure that employees’ direct wages plus tips equal at least the applicable minimum wage and must make up any shortfall.

 Vacation and Sick Leave Recordkeeping

Employers must now maintain records of vacation pay hours accrued, used, and available during the current benefit year, as well as HFWA or sick leave hours accrued, used, and available (if tracked separately from vacation time). Employers must also provide leave balance information in writing or electronically upon employee request, no more than once per month unless employer policy permits more frequent requests.

 HFWA Pay Rate Calculations

The amended Wage Protection Rules clarify how to calculate sick leave pay rates depending on compensation structure. Salaried employees whose pay is unaffected by leave usage do not earn additional compensation for using leave. Commission pay is excluded from the pay rate for employees earning salary plus commission. For employees working at multiple rates or earning shift differentials, the applicable rate is determined by the employee’s schedule at the time leave is requested. If the schedule is unknown, employers must use a lookback period of 30 calendar days or a full pay period totaling 28 to 31 days—excluding overtime, bonuses, or holiday pay—to calculate the rate.

 Youth Employment Compliance

Final rules implementing the CYEOA impose new obligations on employers hiring minors. Employers must obtain and retain records—including exemption documentation, age certificates, proof of educational completion, and school release permits—until three years after the minor turns 18 or employment ends, whichever is sooner. The rules also detail prohibited employment for minors, including hazardous occupations and work in liquor stores, marijuana dispensaries, casinos, and adult entertainment venues. Non-emancipated minors may be paid 15 percent below minimum wage only if eligibility is documented; any minor employed in violation of the CYEOA must be paid the full minimum wage. The Division may investigate complaints, assess penalties, and order corrective action or damages.