A Guide to Colorado PEO Services

Working with a professional employer organization (PEO) can help Colorado businesses streamline HR operations and stay compliant with complex state labor laws. Colorado’s unique rules around wage transparency, overtime, and paid family leave make compliance a constant challenge.

Partnering with a PEO like Deel can automate these requirements and help employers reduce risk while focusing on growth. Learn more about the role of PEOs and their advantages for Colorado businesses below.

How PEOs support Colorado businesses

A partnership with a PEO involves a co-employment arrangement, where the PEO takes on certain employer responsibilities and liabilities while the client retains control over its workforce. Once a business chooses to work with a co-employer, it signs a written contract called a Client Service Agreement or CSA. This contract makes both entities (client company and PEO) legal co-employers and outlines the responsibilities of both parties.

Benefits of partnering with a Colorado PEO

Outsourcing HR and payroll processes offers several advantages for businesses operating in Colorado:

• Increased efficiency: PEOs streamline HR functions by automating payroll, tax filings, and benefits enrollment. This reduces the need for large internal teams and allows businesses to reallocate time and resources to growth initiatives.
• Affordable employee benefits: PEOs negotiate group rates for healthcare, retirement, and other benefits, giving smaller businesses access to packages that normally only large companies can offer. This makes it easier to attract and retain top talent without overspending.
• Compliance management: Colorado’s labor landscape includes strict wage transparency laws, paid family leave requirements, and evolving overtime rules. PEOs help employers navigate these complexities, reduce compliance risks, and manage issues such as workers’ compensation or wage-and-hour disputes.
• Access to expertise: Many startups and small businesses can’t afford in-house HR or legal specialists. PEOs provide access to professionals who understand compliance, labor laws, and risk management. Deel strengthens this advantage by giving Colorado businesses direct access to certified HR, legal, payroll, and tax experts, all available in-platform. This ensures accurate guidance without the cost of maintaining multiple advisors.

See also: How to Select an Employee Benefits Provider in 9 Steps

Cost of a PEO in Colorado

PEO costs in Colorado and across the US typically include an administrative fee for their services, often using one of two pricing structures: a fixed monthly fee per employee, usually around $1,000 per employee annually, or a percentage of overall payroll, usually 2-11%. Final pricing depends on factors such as your company size, the services included, and the provider’s billing structure. Learn more about Deel PEO's pricing.

Payroll, labor, and employment laws in Colorado

Payroll laws in Colorado

Colorado businesses must comply with payroll regulations to avoid penalties and maintain compliance:

Minimum wage requirements: Employers must pay a minimum wage of $14.81/hour in 2025, with tipped employees earning $11.79/hour. Businesses must also follow higher local wage standards if applicable.

Colorado’s local minimum wages for 2025 include:

• Denver City/County:$18.81/hour
• City of Edgewater:$16.52/hour
• Boulder County (only unincorporated areas):$16.57/hour
• City of Boulder:$15.57/hour

See also: US Minimum Wage: A Guide for Employers

Overtime pay: Employees are entitled to overtime wages under Colorado law. Employers must ensure overtime pay aligns with wage agreements and meets legal requirements without improper deductions.

Pay transparency: Colorado's Equal Pay for Equal Work Act requires employers to announce job openings and promotions to employees, include pay ranges and benefits in postings, and maintain job and wage records for two years after employment ends. Amendments effective January 2024 also require disclosing selected candidates and providing guidance for future opportunities. Non-compliance can result in fines up to $10,000.

See also: Pay Transparency Laws in the US – A Definitive Guide

Breaks and rest periods: Employees working more than five hours must receive a 30-minute unpaid meal break unless they cannot be relieved of duties, in which case the break must be paid. Employees also get a 10-minute paid rest period for every four hours worked.

Colorado’s mix of local wage tiers, strict overtime rules, and detailed pay transparency laws makes payroll compliance especially demanding for small and mid-sized businesses. Deel’s HR platform simplifies this complexity by embedding state-specific rules directly into compliant contracts.

Minimum wages, overtime thresholds, and pay transparency requirements are automatically tracked and applied, ensuring every employee is paid accurately and every posting stays compliant. For business owners, that means less time parsing regulations and more time focusing on hiring, retention, and growth.

Labor laws in Colorado

Labor laws in Colorado protect workplace safety, union activity, and fair treatment of employees:

Unions and collective bargaining: Regulations vary by employment type:

• Private sector employees are covered by the National Labor Relations Act (NLRA) and Labor Peace Act (LPA)
• State government employees fall under the Colorado Partnership for Quality Jobs and Services Act - County employees are governed by the Collective Bargaining by County Employees Act
• Other public employees are protected under the Protections for Public Workers Act

Workplace safety: Employers must comply with Colorado Overtime and Minimum Pay Standards Order (COMPS Order) #38, Agricultural Labor Conditions Rules, and whistleblower protection laws. Clear communication about workplace safety measures is essential.

Workers’ compensation: All employers in Colorado must provide workers’ compensation insurance, regardless of the number of employees. This insurance covers medical expenses, lost wages, and rehabilitation for job-related injuries or illnesses.

Employment laws in Colorado

Employment laws ensure fair treatment, prevent discrimination, and support workers during life events:

At-will employment: Colorado operates under at-will employment, allowing employers to terminate employees without cause or notice, as long as anti-discrimination laws are not violated.

Paid leave: Under the Colorado Family and Medical Leave Insurance (FAMLI) program, employees can take up to 12 weeks of paid leave annually for major life events, with extensions of up to 16 weeks for pregnancy-related complications. Both employers and employees contribute to the program.

Paid sick leave: The Colorado Healthy Families and Workplaces Act requires businesses to provide one hour of paid sick leave for every 30 hours worked, up to 48 hours annually. Additional leave is required during public health emergencies.

Discrimination and harassment: Discrimination based on protected classes is prohibited in employment, housing, and public accommodations. Employers must provide accommodations for disabilities and pregnancy-related conditions. Complaints must be filed within specific deadlines.

Jury duty: Employers cannot retaliate against employees for jury service. Regularly employed jurors must be paid their usual wages for the first three days of service, up to $50 per day, unless otherwise agreed.

Choosing the right PEO in Colorado

Selecting the right PEO for your business is essential for compliance and growth. Follow this step-by-step guide to make the best choice:

1. Define your business needs

Analyze inefficiencies in your HR processes and identify areas for cost savings. Determine which services you need from a PEO, such as payroll processing or compliance management. Consider how your needs may evolve as your business grows.

See also: Should You Use a PEO vs Payroll Provider? Benefits, Limitations, and Alternatives

2. Compare benefits access and affordability

Compare the services offered by PEOs, focusing on the quality and affordability of employee benefits packages. Assess how well their tools integrate into your operations, especially their software solutions.

Choose PEOs with a proven track record in Colorado. Verify their credentials through case studies and client testimonials. Since Colorado lacks PEO licensing requirements, thorough research is critical.

Deel allows Colorado businesses to manage employee benefits directly within the platform, view real-time costs, and manage renewals. For globally mobile employees, Deel uniquely offers Aetna International coverage, ensuring seamless benefits when W-2 employees travel internationally.

Free download: A Buyer’s Guide to PEO Services

3. Assess compliance and risk management capabilities

Colorado’s labor laws are evolving, particularly around pay transparency, overtime pay, and family leave. A reliable PEO should proactively monitor these changes and integrate them into payroll and contracts automatically.

Deel’s Compliance Hub tracks federal, state, and local laws in real time, translating legal updates into clear tasks. It also uses AI-driven worker classification tools to prevent missteps like misclassifying contractors as employees, a risk that can result in back wages, penalties, and reputational damage in Colorado.

4. Check customer service and support

Support quality is often the difference between a smooth payroll cycle and costly disruptions. Evaluate the PEO’s responsiveness, whether you’ll have a dedicated account manager, and how well their team understands Colorado-specific issues like overtime disputes or wage recordkeeping.

Deel strengthens this area with 24/7 multilingual support, dedicated customer success managers, and compliance experts who can answer questions specific to Colorado’s laws. Employers get direct access to specialists without third-party handoffs.

5. Review and negotiate the contract

Carefully review contract terms, including responsibilities, fees, and exit clauses. Consult a legal expert if needed to confirm the agreement serves your business’s best interests.

6. Plan for implementation and transition

Work with the PEO to develop a transition timeline that includes meetings, data transfers, and software implementation. Communicate changes to your team, address concerns, and highlight the benefits of using a PEO.

See also: Checklist: How to Change PEO Providers

By following these steps and understanding Colorado’s regulations, your business can benefit from smoother HR processes, improved compliance, and a stronger foundation for growth.

Manage your Colorado, US, and global workers with Deel

Deel’s in-house PEO is built to support fast-growing teams with the tools, coverage, and service they need, all in one platform. The platform combines hiring, onboarding, payroll, and benefits in one place.

That means a single workflow for enrolling new employees, issuing compliant contracts, and managing payroll across Colorado and beyond. Compliance is built in at every level with Deel tracking federal, state, and local laws, automatically updating requirements in contracts and payroll so employers don’t risk penalties for overlooked changes.

Superfiliate is one of many companies scaling with Deel PEO, using the platform to hire and pay a distributed US workforce while cutting back on manual HR processes.

Ready to simplify HR in Colorado? Book a demo to see how Deel’s in-house PEO streamlines payroll, benefits, and compliance in one platform.