Colorado Wage and Hour Laws and the COMPS Order, Explained

If you run a business in Colorado, you've probably wondered whether you're paying overtime the right way, whether your team gets the breaks the law requires, what has to be on a pay stub and how fast a final paycheck needs to go out. The answers mostly live in two laws, the Colorado Wage Act and the COMPS Order.

The Wage Act covers how and when you pay people, including the last paycheck. The COMPS Order covers what you pay and how work time is handled: the minimum wage, overtime, meal and rest breaks, pay records and a poster you're required to display. Below, I walk through both in plain English with the 2026 figures from the Colorado Department of Labor and Employment (CDLE), so you know what applies to you and what to do about it. If you'd like the bigger picture first, my guide to Colorado employment law covers the other rules small employers run into.

Federal wage law, the Fair Labor Standards Act, applies in Colorado too. Where Colorado, federal and local rules overlap, CDLE's rule is that the law giving more protection, or setting the higher standard, is the one you follow.

The Colorado Wage Act

The Colorado Wage Act is the state law about paying wages: how often, how, what you can deduct, and what happens when someone leaves. Once a team member earns wages, the Wage Act protects their right to be paid, whether the amount was set by law, by an agreement or by your usual practice.

Paydays and the payday notice

Every employer needs regular pay periods no longer than one calendar month or 30 days, whichever is longer, with payday no more than 10 days after each pay period ends. You also need to post a notice of your regular paydays and the time and place of payment, at the workplace or somewhere else team members can easily see it. An electronic posting works too, as long as it's easy for your team to get to.

Deductions and pay changes

Deductions are limited to the ones the law allows. CDLE's poster gives examples of what isn't allowed, such as deductions for poor work, breakage or quitting without notice. You can pay different rates for different work if you and the team member agree on each rate before the work is done, although you can't lower a rate after the fact for work that's already been performed.

When a deduction feels fair to you (a broken tool, for example), it's worth checking CDLE's guidance before it goes on a paycheck. CDLE explains these rules in short interpretive notices called INFOs, all posted on its INFOs page.

The COMPS Order

COMPS stands for the Colorado Overtime and Minimum Pay Standards Order. CDLE's Division of Labor Standards and Statistics issues it, and the current version is COMPS Order #40, effective February 1, 2026. The yearly dollar figures, like the minimum wage and the exempt salary level, come from a companion order called the PAY CALC Order, and the 2026 figures have applied since January 1, 2026.

The COMPS Order covers all private-sector work except the jobs and employers it exempts. It covers employees, not independent contractors, and whether someone is a contractor depends on the actual facts of the work, not just on what a contract or a 1099 says.

The 2026 Colorado minimum wage

For 2026, the Colorado minimum wage is $15.16 per hour. It applies to everyone the COMPS Order covers, including team members paid by salary, commission or piece rate, whose pay has to work out to at least the minimum wage for all time worked.

Tipped team members are the ones who regularly receive more than $1.64 per hour in tips. For 2026, you can pay them $12.14 per hour by taking a tip credit of up to $3.02, but only to the extent their tips bring total pay up to the full $15.16. If tips fall short, you pay the difference.

Some Colorado cities and counties set a higher local minimum wage for work done there, and you pay the highest minimum that applies. Denver's is $19.29 per hour for 2026, for example. CDLE's local minimum wage guidance (INFO #19 on the INFOs page) lists each one.

The required COMPS poster

Every employer covered by the COMPS Order has to display the current year's COMPS poster where team members can easily read it during the workday. If a physical poster doesn't work, for example with remote team members, you give each person a copy within their first month. CDLE releases a new version by each December, and you'll find it on the CDLE posters page in English and 16 other languages.

Two poster rules are easy to miss. If you hand out a handbook or written policies, a copy of the COMPS Order or poster has to go with it, and if team members sign for the handbook, they sign an acknowledgment for the poster too. If you don't post as required, you lose the right to use the COMPS Order's employee-specific credits, deductions and exemptions.

What changes for 2027

CDLE has proposed a new COMPS Order and a 2027 PAY CALC Order, with a public hearing set for November 2, 2026 and a planned effective date of January 1, 2027. Nothing is final yet, so I'd wait for the adopted version and the new poster before changing anything. My post on new Colorado employment laws covers what has already changed this year.

Overtime

Colorado overtime is one and a half times a team member's regular rate of pay for hours over 40 in a workweek, over 12 in a workday, or over 12 consecutive hours, whichever gives the team member more pay. The daily and consecutive-hour rules matter for anyone running long shifts: a team member who works past 12 hours in a single day is owed overtime for those extra hours, even in a week that stays under 40 hours.

Three more overtime rules apply:

• No averaging: each workweek stands on its own, so a 50-hour week includes 10 hours of overtime even if the next week is only 30 hours.
• No comp time in place of overtime pay: you can't give time off instead of time-and-a-half.
• The regular rate is more than base pay: shift differentials, commissions and nondiscretionary bonuses count toward it, while tips themselves, expense reimbursements, paid time off and discretionary bonuses don't.

Salaried isn't the same as exempt

Paying someone a salary doesn't, on its own, make them exempt from overtime. For the executive or supervisor, administrative and professional exemptions, the job has to meet the duties tests in the COMPS Order and pay a salary of at least $57,784 a year for 2026 ($1,111.23 a week). A team member who misses either test is non-exempt, and you can still pay them a salary, with overtime pay added for any overtime hours.

The exempt salary level is adjusted for inflation every year, so it's worth reviewing your exempt roles each January, along with your minimum wage rates. If a role sits close to the line, your options are generally to pay the exempt salary, pay hourly with overtime, or arrange schedules to keep overtime down.

Meal and rest breaks

Colorado requires both meal periods and rest periods, and they work differently. Meal periods can be unpaid when the rules are met, while rest periods are always paid and count as time worked.

Meal periods

When a shift runs over 5 hours, the team member is entitled to an uninterrupted 30-minute meal period with no work duties. It can be unpaid only if they're completely relieved of all duties, allowed to leave the work site and allowed to do personal activities. As far as practical, the meal period should fall at least an hour after the shift starts and at least an hour before it ends.

If the work truly makes an uninterrupted meal period impractical, the team member must be allowed to eat while working, and that time is paid. CDLE is clear that being busy isn't enough: a store that can stagger its cashiers' meal periods can't call every meal period impractical. A single overnight clerk who has to stay on duty for the whole shift is the kind of case where a paid, on-duty meal is allowed.

Rest periods

Rest periods are a paid 10 minutes for every 4 hours worked, or major fraction of 4 hours. By shift length, that works out to:

• 2 hours or fewer: no rest period
• Over 2 and up to 6 hours: one rest period
• Over 6 and up to 10 hours: two rest periods
• Over 10 and up to 14 hours: three rest periods

Rest periods should fall in the middle of each 4-hour stretch where practical, and team members don't have to leave the premises, although they can't be working. If a required rest period isn't authorized and permitted, you owe extra pay for that time, and that applies to team members who aren't paid hourly as well. The simplest fix is usually the schedule itself: put breaks on it rather than leaving them to whoever has a quiet minute.

Pay stub requirements

Colorado calls a pay stub an itemized earnings statement, and you owe one to each team member every pay period. The Colorado Wage Act and CDLE's pay rule each list what it has to show, and the list below combines them:

• your business's name and address, and the team member's name
• the dates the pay period covers
• total hours worked in the pay period
• any credits claimed, and tips
• regular rates of pay, gross wages, all amounts withheld or deducted, and net pay

If a payroll provider produces your stubs, it's worth comparing a real one against that list. I don't process payroll, but I do help with wage and hour compliance and with choosing a payroll provider, and that day-to-day help is part of HR Operations Support.

The records behind the pay stub

Behind each stub, the COMPS Order expects you to keep records for every team member: name, address, job, hire date (and date of birth if they're under 18), a daily record of hours worked, credits and tips, and pay details for each pay period. Keep them for at least 3 years after the wages were due, and for as long as any wage claim is pending. My HR & Payroll Record Retention Toolkit covers how long to keep each type of record, with the general federal and Colorado requirement and my recommendation.

New this year, COMPS Order #40 also has you keep records of vacation or PTO hours accrued, used and available in the current benefit year, plus paid sick leave hours if you track those separately. When a team member asks, you provide their vacation balance in writing or electronically, and they can ask once a month, or more often if your policy allows. Listing balances on each pay stub or in an online portal are both reasonable ways to handle it.

Final paychecks

Final pay timing depends on who ended the job. When you fire or lay off a team member, all wages owed are due immediately. If your payroll unit isn't regularly scheduled to be working at that moment, the pay has to be available within six hours of the start of its next regular workday, or, if payroll is handled off-site, delivered within 24 hours of the start of its next regular workday to the worksite, your local office or the team member's last known mailing address.

When a team member quits, final pay is due by the next regular payday. If you send a final check to the worksite or your local office and the person still hasn't received it 60 days after it was due, you mail it instead.

Unused vacation

If you offer paid vacation, earned and unused vacation is part of final pay, whether the person was fired, laid off or resigned, with or without notice. A policy that says earned vacation is forfeited when someone leaves can't be enforced, although you can still set a cap on how much vacation people can build up. What counts is how the leave works, not what it's called: PTO or personal days that can be used for any purpose count as vacation, while leave that can only be used for set reasons, like sick leave or bereavement, doesn't have to be paid out.

Deductions and disputes at the end

The deduction limits still apply to a final paycheck, so you can't deduct for quitting without notice. If you need to confirm that company property or money was returned, you may take up to 10 days to audit, with written notice and other conditions for any deduction that follows. If a former team member sends a written demand for wages, or CDLE sends a notice of complaint, pay everything owed within 14 days after it's sent to avoid penalties.

Before a termination meeting, it helps to have the final check calculated, earned vacation included, so you can hand it over the same day. If your payroll provider needs lead time, build that into when you schedule the conversation.

A quick wage and hour check for your business

If you'd like a place to start, these questions cover most of what's above:

• Is everyone paid at least $15.16 per hour for 2026, or more where a local minimum wage applies?
• Are overtime hours counted by the day and by 12 consecutive hours, not only by the week?
• Do your exempt roles meet the duties tests and the $57,784 salary level for 2026?
• Are meal and rest periods on the schedule, and paid when they should be?
• Do your pay stubs show every required item, and are vacation balances tracked?
• Is the 2026 COMPS poster up, and is a copy in your handbook?
• Could you get a final paycheck out the same day you let someone go?

If a few of those gave you pause, you're not behind for asking. Wage and hour rules are part of what I help owners sort out through HR Foundations & Compliance. I start by learning a bit about your business, then give you a short, practical ranked list of what to fix first.