On October 14 I spent the morning in Loveland at SHRM Northern Colorado's Legislative and Legal Update Mini-Conference, with sessions on AI, FAMLI, leave laws and wage enforcement (event details).
Here is the short version. There is not a lot of brand-new law coming in 2027, but Colorado remains one of the harder states to hire in and stay compliant. Federal and state rules keep layering on top of each other, employees understand their rights better than ever, and people are quicker to file a claim. What protects you is clear policies and good documentation.
Below is what stood out, with links so you can read the source yourself.
Colorado FAMLI: three things to check
The required notice changed. If you have not swapped it yet, do it now. FAMLI updated its required Program Notice (dated December 2025, adding Neonatal Care Leave) and told employers in January to replace older versions. Post it at each work site, give a copy to remote employees, hand it to every new hire, and send it within five days of learning about a possible qualifying event. It has to be the official notice, not your own summary. Download it from the FAMLI Toolkit, and see the five notice rules.
You can require FAMLI first for the extras you offer. If you provide a benefit the law does not require, such as paid parental leave, you can require employees to use available FAMLI leave as a condition of receiving it, and your policy can count FAMLI benefits toward what it provides. That is how you keep stacked leave from adding up to more than you intended. Two conditions: this only applies to benefits you are not legally required to provide (never FMLA or paid sick leave), and the rules must be given to employees in writing to be enforceable. Put it in your parental leave policy and your handbook. (FAMLI and other types of leave)
The tax side gets more complicated in 2027. Starting in 2027, part of FAMLI medical leave benefits becomes taxable wages, which brings new W-2 reporting, and employers with 10 or more employees also pay the employer share of FICA and FUTA on those benefits. Two federal rules already apply in 2026: family leave benefits are taxable income to the employee, and if you pay your employees' share of the premium as a perk, that amount is taxable wages on their W-2. The good news is the premium drops from 0.88% to 0.86% on January 1, 2027. Loop in your accountant and your payroll provider now. (FAMLI tax guidance for employers, 2027 premium announcement)
Leave and accommodations: where it gets tangled
FMLA, FAMLI, workers' comp and PTO overlap in ways that trip up experienced HR people. FMLA only covers employers with 50 or more employees, so for most small businesses FAMLI is the job-protected leave. FAMLI runs at the same time as FMLA when both apply, cannot be paid alongside workers' comp for the same absence, and you cannot force employees to use PTO first. Clear written policies, applied the same way every time, are what hold up. (FAMLI and other types of leave, DOL FMLA basics)
Remote work requests are the hardest accommodation conversations right now. The pandemic showed that many jobs can be done from home, and the EEOC's pandemic-era guidance (now archived) said that experience could be relevant when an employee later asks to work remotely as an accommodation. It is not automatic proof, but "everyone works on site" is no longer a strong answer on its own. Telework can be a reasonable accommodation even if you have no remote work program. Look at the essential functions of the job, consider the request on its facts, and document the conversation. (EEOC on telework as an accommodation)
Train supervisors to recognize a request. Employees do not have to say "accommodation" or mention the ADA. A comment like "my back can't take another full day on my feet" can be enough to start the conversation, and supervisors usually hear it first. (EEOC guide for small employers)
Keep medical records separate. Medical information belongs in a separate, locked file, not the personnel file, with access limited to people who truly need to know. Colorado's paid sick leave law also requires every employer, not just larger ones, to treat health information employees share when using sick leave as a confidential medical record. (the federal rule, 29 CFR 1630.14)
Pay and wages: Colorado is enforcing
Misclassification is a major enforcement focus. Since August 2025, fines for willfully misclassifying an employee as a contractor start at $5,000 and reach $50,000 for repeat violations that are not fixed in time, the state can publish the names of employers found in violation, and an individual who owns or controls at least 25% of the business can be treated as the employer. (HB25-1001) If you use contractors, this is worth a look: how to spot and stop worker misclassification.
If you are not sure a role is exempt, track the hours. Colorado's 2026 exempt salary threshold is $57,784 a year, and salary alone does not make a job exempt; the duties have to qualify too. If the state ever challenges an exemption and you have no time records, the employee's own estimate of overtime can carry the claim. A simple record of hours worked protects you either way. (CDLE 2026 pay orders)
Write down how commissions and tips work. Colorado treats earned commissions as wages under the terms of your agreement, so spell out how they are earned, when they are paid, and what happens when someone leaves. Tip pools can only include employees who regularly receive tips, and if owners or managers share in the pool, you lose the tip credit. (CDLE labor law guidance)
AI at work: my own take
The AI session got me thinking about something that comes up at many of the events I've attended, webinars I've heard and articles I've read: a lot of what is said about AI in the workplace is out of date, misinformed or rooted in fear. That is my own opinion, prompted by the session, not a summary of what the presenters said.
Employers should not be afraid of this technology. They should have a clear policy: which tools people may use, what information never goes into them, and that a person reviews any decision about an employee. One date to know: starting January 1, 2027, Colorado's new law on automated decision tools (SB26-189) requires notice before a covered AI tool materially influences a hiring or employment decision, and an explanation, and human review where commercially reasonable, after an adverse one. If you use AI to screen applicants, now is the time to look at how.
Year-end is the right time to review your handbook
The end of the year is a good moment to review your handbook and other agreements, or to create them, before 2027. A quick list for January 1, 2027:
- Minimum wage rises to $15.71 an hour ($12.69 for tipped employees), and some cities are higher.
- The FAMLI premium changes to 0.86%, so update payroll before the first 2027 pay run.
- Colorado's AI decision-tool law (SB26-189) takes effect. If AI tools influence your hiring decisions, check whether it applies to you.
- Your parental leave policy should spell out FAMLI coordination in writing.
If you do not have a handbook yet, start here: how to set up your first employee handbook.
Good people I met
It was great to connect with folks from Gallagher (insurance and risk management for small businesses), Flood & Peterson (insurance), Strategic Retirement Partners, and PayTech (payroll and HR systems support for larger companies). If an introduction would help you, just ask.
A note before you act
I am not a lawyer, and this is general education, not legal advice. Before you apply any of it to your business, talk with your HR support or an employment attorney.
Questions? Let's talk.
If any of this raised a question about your business, from a FAMLI policy to a handbook review before 2027 to whether a role is truly exempt, I am glad to help. Reach me at (970) 388-0275 or [email protected], or start a conversation here.
JT Metcalf, SHRM-CP Founder and President, M7 Fractional