The Session Is Over. The Clock Just Started.

What Colorado Employers Need to Do Now After the 2026 Legislative Session

By Kevin Welch, CEO & Founder, Journey Payroll & HR | JourneyPayrollHR.com

Kevin Welch, CEO and Founder of Journey Payroll & HR, has spent almost 20 years helping Colorado employers navigate payroll compliance, HR policy, and the employment law changes that arrive every legislative session whether businesses are ready or not. This article reflects his perspective on what the 2026 session means for Colorado employers right now.

The Call Nobody Expects

Maria runs a 40-person landscaping company in the Front Range. She has good people, low turnover for her industry, and a payroll system she trusts. She doesn’t spend a lot of time thinking about the Colorado legislature. She’s too busy running her business.

In late spring 2026, her HR contact mentioned in passing that the legislative session had wrapped up. Maria nodded and moved on to the next thing on her list.

A few weeks later, a former employee filed a wage complaint with the CDLE. Nothing unusual in Maria’s mind, a minor payroll dispute she expected would be resolved quickly. What she didn’t know was that the cap on what the CDLE could handle had just gone up to $13,000. The claim, once too large for the agency, was now squarely within its jurisdiction. And Maria’s name, if the violation were found willful, could end up published on the CDLE website for every client and competitor to see.

Maria is not unusual. Most Colorado employers don’t track legislation in real time, and most legislative summaries are written for attorneys, not business owners. That’s part of why I write these articles. My job isn’t to report the news. It’s to translate what the legislature did into something you can actually act on.

The 2026 Colorado legislative session ended May 13, 2026. A handful of the bills that passed, and some that were signed into law even earlier, will land directly on your desk. Here’s what you need to know.

1. How Did Colorado Rewrite Its AI Hiring Law? (SB 26-189)

What happened

This one has been moving fast, and the timeline is confusing, so let me lay it out clearly.

Back in 2024, Colorado passed SB 24-205, the Colorado Artificial Intelligence Act, the first comprehensive state AI law in the country. It was ambitious, sweeping, and frankly a compliance nightmare for most employers. It required risk management programs, annual impact assessments, AG notifications, and a broad duty of care around algorithmic discrimination. The effective date was pushed from February 2026 to June 30, 2026, buying employers more time, but the compliance burden remained enormous.

On May 14, 2026, Governor Polis signed SB 26-189, the Colorado Automated Decision-Making Technology Act, on the Colorado General Assembly portal, which repeals and replaces the original Colorado AI Act. The new law takes effect January 1, 2027. It is narrower, more workable, and far less burdensome than its predecessor, but it still creates real obligations for Colorado employers who use technology to make or influence employment decisions.

What Changed: SB 24-205 vs. SB 26-189

What it actually requires

The new law focuses on what it calls ‘automated decision-making technology’ (ADMT): any technology that processes personal data and uses computation to generate outputs, such as rankings, scores, or classifications, that materially influence a consequential employment decision. That includes hiring, compensation, promotion, and similar decisions.

If your business uses covered ADMT, the law requires three things:

• Pre-use notice. Before using covered technology, you must provide employees or applicants a clear notice that ADMT will be applied to their situation.
• Adverse action process. If a covered tool materially influences a negative employment outcome, you must disclose that fact, give the individual an opportunity to request human review, and in some cases reconsider the decision.
• Recordkeeping. Records related to covered ADMT use must be retained for at least three years.

The Colorado Attorney General has exclusive enforcement authority under this law. There is no private right of action.

One additional context worth noting: a federal court temporarily paused enforcement of the original AI law in April 2026 following a legal challenge, and the Colorado AG has indicated enforcement will not begin until rulemaking under the new law is complete. The implementing rules are not yet final. The underlying law, however, is on the books, and the compliance work it requires does not disappear because the enforcement date is uncertain.

What you should do now

Start by taking an honest inventory of your HR technology. If any tool your business uses, including applicant tracking systems, recruiting software, performance management platforms, or scheduling tools, generates outputs that influence who gets hired, promoted, compensated, or disciplined, that tool may qualify as covered ADMT.

The operational changes this law requires, notice workflows, record retention systems, adverse action procedures, take time to build. January 1, 2027, will arrive faster than it feels like right now. Don’t wait for the final rules to start the inventory.

If your situation involves specific tools and decisions that may fall under this law, a Colorado employment attorney can give you concrete guidance on your specific exposure. At Journey, we’re happy to make a warm introduction to trusted Colorado employment attorneys we work with regularly if that would be helpful.

Primary source: Official SB 26-189 statutory text on the Colorado General Assembly portal

2. What Is the Status of Colorado’s Labor Peace Act and HB 26-1005?

What happened

For the second year in a row, the Colorado legislature passed a bill that would have significantly changed how unions form and collect dues in this state, and for the second year in a row, Governor Polis vetoed it.

House Bill 26-1005, the Worker Protection Act, would have eliminated the second election requirement under Colorado’s Colorado Labor Peace Act statutory text on the Colorado General Assembly portal, an 83-year-old law unique to Colorado. Under current law, workers must hold two separate elections to fully organize. The first requires a simple majority to form a union. The second requires 75 percent approval before the union can negotiate mandatory dues payments. HB 26-1005 would have eliminated that second election entirely, meaning a simple majority vote could result in mandatory dues for all workers at a company.

The bill passed the Democrat-controlled legislature on a strict party-line vote. Governor Polis vetoed it, as he had in 2025, on the grounds that labor and business had not reached a durable compromise.

Why employers shouldn’t treat this as a win

Here’s what stood out to me in the governor’s veto. He didn’t say the idea was wrong. He said it will keep coming back until it gets resolved. His exact words: this issue will likely come up again next year and every subsequent year until it is addressed, which creates uncertainty for both workers and businesses.

Governor Polis is in the final months of his second term, with his administration drawing to a close in January 2027. The next governor has not yet been elected. The legislative majority that passed this bill twice is not going anywhere. The employers who are going to be caught off guard by this issue are the ones who read the veto news, exhaled, and moved on.

I’m not here to take a political position on whether unions are good or bad for Colorado businesses. What I will tell you, as someone who has built a team culture I’m genuinely proud of, is that the employers who are least vulnerable to unionization drives are the ones whose employees already feel heard, fairly compensated, and treated with respect. That’s not a political observation. It’s a practical one.

What you should do now

Use this period of stability to look honestly at your workplace culture. Are your compensation practices competitive and transparent? Do employees feel like their concerns are taken seriously? Are your managers building trust or eroding it? These aren’t just nice-to-have questions. They are your best long-term defense against a workforce that starts looking for outside representation.

Journey Payroll & HR works with Colorado employers on the kind of foundational practices that make for workplaces people want to stay at. If you want to have that conversation, we’re here.

Primary source: Official HB 26-1005 statutory text on the Colorado General Assembly portal

3. What Are the New Colorado Wage Act Penalties Effective July 1, 2026?

What happened

This one didn’t come out of the 2026 session, but it belongs in this article because one of its most consequential provisions takes effect July 1, 2026, weeks from now, and most Colorado employers have no idea it’s coming.

HB 25-1001, signed into law in 2025 and effective August 6, 2025, made sweeping changes to the Colorado Wage Act under HB 25-1001 on the Colorado General Assembly portal. The changes that took effect at signing were significant. But the provision landing this month may be the one with the broadest day-to-day impact: starting July 1, 2026, the Colorado Department of Labor and Employment (CDLE) can adjudicate wage claims of up to $13,000 per employee, nearly double the prior threshold of $7,500.

Why this matters more than it sounds

Here’s what that threshold change actually means in practice. Before July 1, many wage disputes fell outside the CDLE’s jurisdiction and required employees to file in civil court, a more expensive and time-consuming process that deterred a significant number of claims. Starting July 1, more claims will fall squarely within the CDLE’s reach, which means faster adjudication, lower barriers for employees to pursue disputes, and more cases landing on Colorado employers’ doorsteps.

Pair that with the other changes that already took effect under this law, and the picture gets more serious:

• Personal liability for owners. Any individual who owns or controls at least 25 percent of a business is now personally liable for Colorado Wage Act violations, unless they can prove they fully delegated day-to-day operational control. For small business owners, this is not a corporate liability issue. It is a personal one.
• Automatic fines for worker misclassification. If the CDLE finds that an employer misclassified a worker as an independent contractor in a way that affected wage or hour obligations, automatic penalties apply: $5,000 for a first willful violation, up to $50,000 for repeat, unremedied violations.
• Public naming of willful violators. For every willful violation the CDLE determines was not remedied within 60 days, the CDLE director must publish the employer’s name on the CDLE website and notify licensing bodies with authority to restrict or revoke the employer’s license to operate. This is not a fine. It is a public record.

What you should do now

Start with your independent contractor relationships. If you have workers classified as 1099 contractors who function like employees, meaning they work set hours, use your equipment, work exclusively for you, and are directed by your management, that classification deserves a hard look before July 1.

Also review your payroll processes for accuracy. Wage claims often start small, a missed overtime calculation, a paycheck deduction that shouldn’t have happened, an employee who wasn’t paid for all hours worked. Under the expanded CDLE threshold, those small errors are now easier for employees to pursue and more consequential for employers who don’t catch them first.

This is exactly what a payroll partner like Journey Payroll & HR exists to prevent. Accurate payroll, clean records, and consistent processes are your first line of defense against wage claims. If you want an outside set of eyes on your current practices before July 1, reach out to us at www.JourneyPayrollHR.com.

Primary source: Official HB 25-1001 statutory text on the Colorado General Assembly portal

4. FAMLI Changes Are Already in Effect

What happened

This one is already done. Two important FAMLI changes took effect January 1, 2026, and some Colorado employers are still catching up to both of them.

The premium rate changed

Colorado’s FAMLI premium rate decreased from 0.9 percent to 0.88 percent of employee wages starting January 1, 2026. The change came through SB 25-144, which also restructured how future premiums will be set: annually by the FAMLI Division director, capped at a maximum of 1.2 percent.

If you are running payroll and you have not confirmed that your system reflects 0.88 percent, check that now. Journey Payroll & HR manages FAMLI premium calculations as part of standard payroll processing for Colorado clients, so our clients don’t have to track those updates manually. But not every payroll provider updates automatically, and the difference, while small per employee, adds up across a year.

NICU leave expanded significantly

Also effective January 1, 2026: parents of newborns receiving inpatient care in a neonatal intensive care unit (NICU) are now eligible for up to 12 additional weeks of paid FAMLI leave, on top of the standard 12-week bonding leave available to all new parents. In a qualifying NICU situation, an employee may be eligible for up to 24 weeks of paid FAMLI leave.

This is a meaningful expansion that most employers’ HR teams are not yet well-versed in. If you have employees who have had or are having a baby requiring NICU care, make sure your HR team understands this entitlement and that your leave tracking system can handle it.

Primary source: Official Colorado FAMLI Division website and program guidance

The Session Ends. The Work Doesn’t.

Every year, I watch Colorado employers get caught flat-footed by changes that were passed months earlier and simply hadn’t filtered into their day-to-day operations yet. The legislature adjourned on May 13. For most business owners, that’s barely a footnote. But the effective dates on these obligations don’t care whether you were paying attention.

July 1, 2026, is weeks away, and with it comes a doubling of the CDLE’s wage claim jurisdiction and a public naming process for willful violators. January 1, 2027, brings the new AI hiring law. The Labor Peace Act fight is coming back next session. The FAMLI changes are already in effect, and some payroll systems still haven’t caught up.

My recommendation is the same one I give every Colorado employer who asks: don’t try to track all of this alone. Your payroll and HR partner should be absorbing this complexity so you don’t have to. That’s exactly what we do at Journey Payroll & HR. We stay on top of what’s changing in Colorado employment law, we update our systems when the rules change, and we flag the things that require action before they become problems.

If you have questions about any of these changes and how they apply to your specific business, visit us at www.JourneyPayrollHR.com or connect with me directly on LinkedIn. And if something you’re facing has moved into potential legal exposure territory, the right call is a Colorado employment attorney, not a payroll company. We’re happy to make that introduction.

The session is over. The clock just started. Let’s make sure you’re ready.

Frequently Asked Questions: Colorado Employer Compliance After the 2026 Legislative Session

Chamber Colorado Monthly Articles | Kevin Welch, Journey Payroll & HR | JourneyPayrollHR.com