Legislative Changes Affecting Colorado Employers in 2026

Posted by: Karen Booher on January 24th, 2026

Each calendar year always brings new legislative changes that impact employers. What are some of the key changes that took effect on January 1, 2026? Read on….

Colorado’s Family and Medical Leave Insurance (FAMLI) Program

• Colorado’s paid family leave program expands with up to 12 additional weeks for NICU-related care.
• Premium rates dropped from .9% of wages in 2025 (.45% for employers and .45% for employees) to .88% in 2026 (.44% for employers and .44% for employees).
• In late December 2025, the IRS granted Colorado and other states a one-year extension to implement updated federal tax withholding and reporting requirements for paid medical leave. Implementation of those changes is now expected in 2027, rather than January 1, 2026. Therefore, for 2026, FAMLI will continue operating under its existing federal tax treatment.

Colorado’s Exempt Salary Threshold

• On January 1, 2026, Colorado’s exempt salary threshold for Executive, Administrative, & Professional (EAP) roles increased to $1,111.23 per week, or $57,784 per year, up from $56,485 annually in 2025.
• This rate adjusts annually based on inflation and is set by the Colorado Overtime & Minimum Pay Standards (COMPS) Order.
• Under Colorado’s COMPS Order, only up to 10% of the required EAP salary amount may be paid through nondiscretionary bonuses, incentives, and commissions if those amounts are paid at least annually (or more frequently).

Key Changes in Meal/Snack Deductions in 2026

The most significant change, due to the Tax Cuts and Jobs Act (TCJA) changes, impacts meals and snacks provided at the workplace (i.e., “convenience of the employer” meals). While many of these expenses have been 50% deductible, they are generally nondeductible (0% deductible) in 2026. This generally applies to everyday items many employers don’t think twice about, such as:

• Coffee and drinks in the break room.
• Snacks for employees.
• Food brought in for staff meetings.
• Meals provided to employees working late.

Other Changes

• IRS retirement plan contribution limits updated for 2026
  • 401(k) elective deferral limit increased to $24,500
  • IRA contribution limit increased to $7,500
• The 2026 Social Security taxable wage base is $184,500 (up from $176,100 in 2025)
• IRS released the 2026 HSA inflation-adjusted limits:
  • $4,400 (self-only)
  • $8,750 (family)
  • Catch-up contribution remains $1,000 for age 55+
• For plan years beginning in 2026, the ACA affordability threshold increases to 9.96% of household income (up from 9.02% in 2025)
• Work Opportunity Tax Credit (WOTC) expired 12/31/2025. New hires with start dates on or after January 1, 2026, are not eligible unless Congress reauthorizes/extends it (which Congress has often done retroactively in past lapses).
• Minimum Wage Increases. Effective January 1, 2026, the minimum wage in Colorado increased from $14.81 to $15.16 per hour, and in Denver from $18.81 to $19.29 per hour.
• The 2026 IRS Standard Mileage Rate for Business is 72.5 cents per mile, up from 70 cents in 2025.

The above is not a complete list and is informational only. It does not represent legal advice.

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Source:

Colorado Staffing Association, Staffing Leaders Networking Call, January 13, 2026.