Colorado has specific payroll requirements that every employer needs to know. From the FAMLI program to wage theft prevention laws, staying compliant can feel overwhelming. Here's a practical guide to help you navigate Colorado's payroll landscape.
FAMLI (Family and Medical Leave Insurance)
Colorado's FAMLI program provides paid family and medical leave for employees. As an employer, you need to understand your obligations:
- Employers with 1+ employees must participate in the program
- Premiums are split between employer and employee (0.45% each of wages)
- Employers with fewer than 10 employees only pay the employee portion
- Employees can take up to 12 weeks of paid leave (16 weeks for pregnancy complications)
- Benefits began January 1, 2024
Colorado Wage Theft Prevention Act
Colorado takes wage theft seriously. The Wage Theft Prevention Act requires employers to:
- Provide written notice of pay rates, pay dates, and employer information at hire
- Notify employees of any changes to pay rates before the change takes effect
- Pay employees on regular, established paydays (at least monthly for most employees)
- Provide itemized pay statements with each payment
- Keep accurate payroll records for at least 3 years
Colorado Minimum Wage & Overtime
Colorado's minimum wage is adjusted annually for inflation. For 2025, the state minimum wage is $14.81 per hour (Denver's local minimum is higher). Overtime rules require:
- Time-and-a-half for hours worked over 40 in a workweek
- Time-and-a-half for hours worked over 12 in a single workday
- Proper classification of exempt vs. non-exempt employees
- Colorado's salary threshold for exempt employees may differ from federal
💡 Pro Tip: Colorado has a daily overtime rule in addition to the weekly rule. This is different from federal law, which only requires overtime after 40 hours in a week. Make sure your payroll system accounts for both.
New Hire Reporting
Colorado employers must report all new hires and rehires to the Colorado State Directory of New Hires within 20 days of the employee's start date. This is a federal requirement administered at the state level and is used primarily for child support enforcement.
Payroll Tax Obligations
As a Colorado employer, you're responsible for:
- Withholding Colorado state income tax from employee wages
- Paying Colorado unemployment insurance (SUTA) taxes
- Filing quarterly wage reports with the Colorado Department of Labor
- Withholding and remitting federal income tax, Social Security, and Medicare
- Filing Form 941 quarterly and W-2s annually
Staying Compliant
Payroll compliance in Colorado isn't optional — penalties for violations can be significant. The best approach is to work with a payroll professional who understands Colorado's specific requirements and can ensure your business stays on the right side of the law.
At Mountain Bookkeeping & Tax Solutions, we handle full-service payroll processing with built-in Colorado compliance. We stay on top of regulatory changes so you don't have to.