Denver business laws come from two layers: Colorado statutes and rules from the City and County of Denver, which sets its own minimum wage and collects its own taxes. In 2026, the rules most likely to catch a growing company are Colorado’s strict noncompete statute, Denver’s $19.29 minimum wage, paid sick leave, new owner-liability rules for unpaid wages, and Denver’s separate tax system. This guide covers each one in plain English.
Key 2026 numbers for Denver businesses
Many of Colorado’s and Denver’s legal thresholds are indexed and change every January. Here’s where they stand for 2026.
| Rule | 2026 figure | Who sets it |
|---|---|---|
| Denver minimum wage | $19.29/hour ($19.84 announced for 2027) | City and County of Denver |
| Denver tipped minimum (food and beverage only) | $16.27/hour | City and County of Denver |
| Colorado minimum wage (outside Denver) | $15.16/hour | CDLE |
| Noncompete compensation threshold | $130,014/year | CDLE PAY CALC Order |
| Customer non-solicit threshold | $78,008.40/year | 60% of the noncompete threshold |
| Paid sick leave accrual | 1 hour per 30 worked, up to 48 hours/year | Colorado HFWA |
| Denver sales tax | 5.15% city; 9.15% combined | City and County of Denver |
| Denver Occupational Privilege Tax | $5.75/month employee; $4.00/month employer | City and County of Denver |
| Colorado periodic report | $25 online | Colorado Secretary of State |
Noncompetes under Colorado’s statute, C.R.S. 8-2-113
Colorado starts from the position that a noncompete is void. The statute then carves out narrow exceptions. For a Denver company hiring salespeople, engineers or account managers, this is usually the first legal surprise.
Who can be bound by a noncompete in 2026
A noncompete is allowed only if two conditions are met. The worker must earn at least the “highly compensated” threshold, which the Colorado Department of Labor and Employment sets each year. The 2026 PAY CALC Order puts it at $130,014. The covenant must also be for the protection of trade secrets and no broader than reasonably necessary to protect them.
The worker has to meet the threshold both when the covenant is signed and when it’s enforced. A sales manager who earns $135,000 at signing but $120,000 when she leaves may fall outside the exception.
Customer non-solicitation agreements follow the same structure at a lower bar. A worker must earn at least 60% of the threshold, which is $78,008.40 in 2026.
The notice rule that voids otherwise valid covenants
Even a covenant that meets the pay and trade-secret tests fails without proper notice. The notice must:
- Be in a separate document from other agreements.
- Use clear and conspicuous terms.
- Identify the agreement by name and describe what it restricts.
- Be signed by the worker.
Prospective hires must get it before they accept the offer. Current employees must get it at least 14 days before the covenant, or any raise or change in terms that serves as consideration, takes effect.
The penalties are real. A worker harmed by an unlawful covenant can recover actual damages, plus a $5,000 penalty per worker, costs and attorney fees. Employers also can’t require Colorado-based workers to litigate enforceability outside Colorado.
2025 changes for healthcare employers and minority owners
Senate Bill 25-083 took effect on August 6, 2025. It voids noncompetes and customer non-solicits for physicians, advanced practice registered nurses and dentists, regardless of pay. It also limits sale-of-business noncompetes for owners holding less than 50% who received their stake for services. For those owners, the noncompete can’t last longer than their sale proceeds divided by their average annual compensation.
What still protects a Denver business
You still have tools. Confidentiality agreements remain enforceable, though they can’t bar workers from using general skills or publicly available information. Trade secret law still applies. Colorado also allows employers to recover certain training costs if an employee leaves within two years. Our guide to essential contracts for growing businesses covers how these pieces fit together.
Denver’s minimum wage and where it applies
Denver’s citywide minimum wage is $19.29 per hour in 2026. It adjusts each January based on regional inflation, and the city has announced $19.84 for 2027.
The key question is location, not headquarters. The ordinance covers work performed inside the City and County of Denver. It excludes employees who work less than four hours in Denver in a week and those only traveling through.
Consider a Littleton landscaping company with crews spending two days a week on Denver properties. Those crews generally need to be paid at least Denver’s rate for their Denver work, even though the company sits outside city limits.
Tip credits are narrow, too. Only food and beverage employers can take Denver’s $3.02 tip credit. Other tipped workers, such as salon or valet staff, must receive the full city minimum in wages.
Paid sick leave under the Healthy Families and Workplaces Act
Colorado’s paid sick leave law applies to every employer, regardless of size. The basics, per the state’s HFWA guidance:
- Employees earn one hour for every 30 hours worked, starting day one.
- Accrual caps at 48 hours per year. Up to 48 unused hours carry over, but you don’t have to allow more than 48 hours of use in a year.
- Exempt employees accrue as if they work 40 hours a week.
- Covered uses include the employee’s own illness or preventive care, caring for a family member, domestic violence needs, bereavement, and certain closures due to bad weather or power loss.
- Employers can ask for documentation only when an employee misses four or more consecutive workdays.
Employers must give written notice of these rights and display the state poster. A separate entitlement of up to 80 hours applies during a declared public health emergency. None was in effect as of the state’s February 2026 guidance.
New wage-law risks for owners
House Bill 25-1001 changed the stakes for small-business owners. Under it, a person who owns or controls at least 25% of a business can be personally liable for unpaid wages, unless they fully delegated day-to-day control.
The bill also added automatic fines for misclassifying employees as contractors where that affects wage obligations, starting at $5,000. And since July 1, 2026, the state labor department can decide wage claims up to $13,000 per employee, up from $7,500. If you rely on 1099 workers, review our article on employee vs. independent contractor classification.
Privacy rules: the Colorado Privacy Act and biometric data
The Colorado Privacy Act generally applies only to businesses that process personal data of more than 100,000 Colorado consumers a year. It also covers those that earn revenue from selling data of 25,000 or more. Most $1 million to $5 million companies fall below those lines.
Two amendments reach further, though:
- Biometrics (effective July 1, 2025). Any business that collects biometric identifiers must follow the biometric rules, whatever its size. That includes employers using fingerprint or facial-recognition time clocks, which need informed employee consent.
- Minors (effective October 1, 2025). Businesses offering online services they know minors use face added duties and limits on targeted advertising, with no size threshold.
AI in hiring: a new law takes effect January 1, 2027
Colorado repealed its original AI Act before it took effect. The replacement, Senate Bill 26-189, was signed May 14, 2026, and takes effect January 1, 2027. Employers using covered automated tools in hiring or other employment decisions will need to give notice. They’ll also need to explain adverse decisions, offer human review and keep records for three years. The Attorney General enforces it, and implementing rules weren’t final as of this writing.
Denver taxes and licenses
Denver doesn’t require one general business license. Specific activities need permits through the city’s Business Licensing Center. Taxes are where Denver differs most from other Colorado cities:
- Home-rule sales tax. Denver collects its own sales and use tax, so you need a Denver license (currently no fee) and a Colorado license (up to $16, plus a $50 deposit), with separate returns.
- Occupational Privilege Tax. Employees earning $500 or more in a month for Denver work pay $5.75 a month, withheld by the employer. The employer pays $4.00 per employee, plus $4.00 for each owner, partner or manager working in Denver.
A simple Denver compliance calendar
- January: Update payroll for the new Denver and Colorado minimum wages. Check the new noncompete threshold before issuing covenants.
- Your periodic report month: File your Colorado periodic report ($25). You have two months on either side before the entity goes delinquent.
- On your filing schedule: Remit Denver Occupational Privilege Tax and city sales tax, plus quarterly FAMLI wage reports.
- Year-end: Send current employees updated HFWA notices.
Getting legal help in Denver
Most of these issues are routine once they’re set up correctly. The costly problems come from a noncompete without proper notice, a payroll that misses the Denver rate, or a contractor who should have been an employee.
Flex Business Lawyer gives Denver companies ongoing legal help for a flat monthly subscription. You get up to 5 attorney hours each month for contracts, employment questions and deals. You can see how the subscription is priced, learn more about our Denver business lawyer services, or read when to call a business lawyer. When you’re ready, start your subscription.
Frequently asked questions
Do Denver's minimum wage rules apply to businesses based outside the city?
They can. Denver’s minimum wage applies to work performed within the City and County of Denver, regardless of where the employer is based. Employees who work less than four hours in Denver in a week, or who only travel through the city, are excluded.
Are noncompetes signed before Colorado's 2022 law still enforceable?
Colorado’s current rules apply to covenants entered into or renewed on or after August 10, 2022, and the 2025 amendments apply to agreements entered into on or after August 6, 2025. Older agreements are judged under the law in effect when they were signed. Enforceability depends on the facts, so talk to a lawyer before relying on one.
Does the Colorado Privacy Act apply to a small Denver business?
The general rules apply only to businesses that process personal data of more than 100,000 Colorado consumers a year, or that profit from selling data of 25,000 or more. But since July 1, 2025, any business that collects biometric identifiers, such as fingerprint time clocks, must follow the biometric rules regardless of size.
Do Denver employers have to provide paid sick leave?
Yes. Colorado’s Healthy Families and Workplaces Act covers employers of every size. Employees earn one hour of paid leave for every 30 hours worked, up to 48 hours a year, and employers must give written notice of these rights and display the state poster.