The last few weeks of the year are busy for every business owner. Between closing out the books, holiday schedules, and planning for next year, HR housekeeping is easy to push to January.
The problem is that several Colorado employment rules change on Jan. 1. If you wait until the new year to catch up, you may already be behind. Here are eight things I recommend every small employer review before the calendar turns.
Four numbers Colorado employers should update before Jan. 1, 2027. The state and Denver minimum wages and the salary threshold for exempt employees all go up, while the FAMLI premium goes down slightly. The 2027 exempt salary threshold is an estimate until the state publishes the official figure.
Sources: Colorado Department of Labor and Employment, Denver Labor.
1. Update pay rates for the new minimum wage
Colorado adjusts its state minimum wage every Jan. 1, and some cities, including Denver, set their own higher rates. Check every hourly employee's pay against the rate that applies where they actually work. Don't forget tipped employees, whose minimum cash wage changes too.
2. Recheck your exempt employees' salaries
To be classified as exempt from overtime in Colorado, an employee must meet a duties test and earn at least the state's salary threshold. That threshold also changes each year. If a salaried employee will fall below it on Jan. 1, you'll need to either raise their salary or begin tracking their hours and paying overtime.
3. Replace your workplace posters
Colorado updates several required notices annually, including the COMPS Order poster that covers minimum wage, overtime, and break rules. Post the new versions where employees can see them, and share them electronically with remote staff.
4. Review paid sick leave balances and carryover
Under Colorado's Healthy Families and Workplaces Act, employees earn paid sick leave throughout the year, and unused hours generally carry over. Make sure your payroll system and your written policy handle year-end carryover correctly, and that employees can see their balances.
5. Confirm your FAMLI setup for 2027
Colorado's paid family and medical leave program, FAMLI, is funded through payroll premiums. Confirm next year's premium rate with your payroll provider, and make sure deductions and employer contributions are set up correctly for the new year.
6. Take a hard look at your employee handbook
If your handbook hasn't been updated in the past year, something in it is likely out of date. Look for policies that no longer match how you actually operate, and for gaps where state law has changed. A handbook that contradicts your practices can hurt you more than having no handbook at all.
7. Audit worker classifications
Year-end is a good time to confirm that everyone is classified correctly, both as exempt or non-exempt and as an employee or independent contractor. Misclassification is one of the most common and most expensive mistakes small businesses make, and it's much easier to fix proactively than after a complaint.
8. Get your files in order
Make sure every current employee has a completed Form I-9 on file, that personnel files are complete and stored securely, and that any performance conversations from this year are documented. If you're planning to address a performance issue in the new year, good documentation now will make that conversation much easier.
Start the new year ahead
None of these tasks take long on their own, but together they can feel like a lot at the end of a busy year. If you'd like a second set of eyes on your handbook, classifications, or compliance setup, I'm happy to help.
Book a free 30-minute consultation to talk through where your business stands and what to prioritize before Jan. 1.
This post is for general informational purposes and isn't legal advice. Employment laws change, so confirm current requirements or consult an attorney for your specific situation.