Colorado Raises Wage Claim Threshold

Beginning July 1, 2026, Colorado’s wage claim threshold will increase from $7,500 to $13,000 under House Bill 25-1001 (HB 25-1001), enacted in 2025.

The Colorado Division of Labor Standards and Statistics will be able to hear wage claims up to $13,000 for claims filed between July 1, 2026, and December 31, 2027, after which the threshold will be adjusted annually for inflation.

This update applies to Colorado employers subject to state wage-and-hour requirements and takes effect on July 1, 2026.

What Employers Need to Do

• Review wage payment practices, final pay procedures, and deduction policies before July 1, 2026, because higher-value claims may now fall within the Division’s jurisdiction.

• Update internal processes for responding to wage claims to ensure timely and consistent responses through the state administrative process.

• Train HR and payroll staff to recognize when a wage dispute may now qualify for administrative handling rather than direct court action.

Overview

• Colorado’s Division of Labor Standards and Statistics may currently hear wage claims of $7,500 or less. Beginning July 1, 2026, the threshold rises to $13,000 for claims filed through December 31, 2027.

• Beginning January 1, 2028, the maximum claim amount will be adjusted for inflation as specified by the Division’s director.

• HB 25-1001 also requires the Division to determine whether a wage violation was willful, publish employers found in violations, and notify licensing or permitting authorities if a willful violation is not corrected within 60 days.

Why This Matters

The higher threshold means more wage disputes may be managed administratively through the Division rather than in court, increasing the likelihood that Colorado employers face state-agency-level wage claims. Combined with the willfulness determinations, public posting, and licensing-notification provisions of HB 25-1001, employers face broader enforcement exposure than under the prior threshold.

Key Risks for Employers

• Colorado Wage Act penalties apply to claims within the Division’s expanded jurisdiction: A successful wage claim can result in recovery of the full unpaid wages plus an automatic penalty of two times the unpaid wages or $1,000, whichever is greater. HB 25-1001 raises the Division’s threshold to $13,000, meaning employers may face these penalties on larger claims through administrative channels.

• Willfulness determinations and public posting: The Division must determine whether a violation was willful and may publish certain employer violations, increasing reputational exposure.

• Licensing impact: If a willful violation is not corrected within 60 days, the Division must notify licensing or permitting authorities, which may have implications beyond the wage claim itself.

• Extended limitations for willful violations: Willful violations carry a three-year statute of limitations (versus two years for standard violations), extending employer exposure.

Source References

• Colorado Expands Wage and Hour Protections and Liability (VensureHR)
• Colorado HB 25-1001 – Enforcement Wage Hour Laws

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