Colorado Employment Law for Martial Arts Schools: Non-Competes, Pay and Hiring Rules

Colorado allows employee non-competes only for workers who clear statutory pay or job-status tests, so most ordinary instructors cannot be bound.

Can a martial arts school in Colorado make instructors sign a non-compete?

Under C.R.S. 8-2-113, a non-compete is void unless the worker is ‘highly compensated’ ($130,014 a year in 2026, set by CDLE) and the clause is no broader than needed to protect trade secrets, or it falls within a narrow exception such as sale of a business. A separate signed notice must be given to new hires before they accept the offer and to current employees at least 14 days before the clause takes effect. Employers who present or try to enforce a void clause face penalties of $5,000 per worker plus damages. An ordinary instructor is almost certainly below the threshold, so a non-compete would be void.

Can you stop a departing instructor from soliciting your students?

Customer (student) non-solicitation clauses are allowed only for workers earning at least 60% of the threshold ($78,008.40 in 2026) and only to protect trade secrets, with the same separate-notice requirement. Most instructors and front-desk staff earn less, so these clauses would be void for them.

Can you stop a departing instructor from recruiting your staff?

Section 8-2-113 targets non-competes and customer non-solicits; employee non-solicitation clauses are not expressly covered and are generally treated as permitted if reasonable. Some surveys apply the 60% threshold to them as well, so courts’ treatment is not confirmed — check with local counsel.

What is the minimum wage for instructors in Colorado?

$15.16 per hour statewide effective January 1, 2026 ($12.14 tipped); CDLE has set $15.71 for January 1, 2027. Denver is $19.29 in 2026, and other localities (for example Edgewater and unincorporated Boulder County) set their own higher rates.

When do instructors earn overtime?

Time and a half over 40 hours a week, over 12 hours a day, or over 12 consecutive hours. Exempt salaried staff must earn at least $57,784 a year ($1,111.23 a week) in 2026 under the COMPS Order and meet the duties tests.

When is the final paycheck due?

If you fire someone, final pay is due immediately, or by the end of the next regular workday if payroll is not open (24 hours if payroll is offsite) (C.R.S. 8-4-109). If an employee quits, pay is due by the next regular payday. Earned commissions and all earned, unused vacation pay must be paid; vacation cannot be forfeited (Nieto v. Clark’s Market, 2021).

What background checks can you run on instructors who teach children?

The Colorado Chance to Compete Act (C.R.S. 8-2-130), applying to all employers since September 1, 2021, bars asking about criminal history on the initial application and bars job ads saying people with records need not apply; you may run a background check later, unless another law requires screening. Colorado’s Equal Pay for Equal Work Act bans asking about or relying on salary history. No state law requiring background checks for private martial arts schools is confirmed; use FCRA procedures and Colorado’s own credit-check limits.

Are martial arts instructors mandated reporters of child abuse?

Not universal, but C.R.S. 19-3-304(2) includes a ‘director, coach, assistant coach, or athletic program personnel employed by a private sports organization or program,’ where ’employed’ means paid beyond expense reimbursement. Paid martial arts instructors are very likely covered; unpaid volunteers may not be. Report immediately to the county department of human services, local law enforcement, or the statewide hotline (1-844-CO-4-KIDS).

What can a dress code or grooming policy require?

Colorado’s CROWN Act (2020) protects hair texture, type, and protective styles such as braids, locs, and twists as part of race. The Colorado Anti-Discrimination Act (all employers) protects religion, sexual orientation, and gender identity and expression; dress and grooming codes cannot differ by gender, and religious dress must be accommodated.

How far can a morals or conduct clause reach into off-duty life?

C.R.S. 24-34-402.5 bars firing employees for lawful off-duty activity, with exceptions for bona fide job requirements or conflicts of interest. Because cannabis is still illegal federally, off-duty use is not protected (Coats v. Dish Network, 2015). Morals clauses should be tied to real job requirements such as conduct toward students.

Do you have to disclose pay or allow staff to discuss it?

The Equal Pay for Equal Work Act requires every job posting to include a good-faith pay range and a general description of benefits; employers must also announce promotion opportunities and give certain post-selection notices. Colorado law also protects employees’ wage discussions.

What privacy rules apply to student and parent records?

The Colorado Privacy Act covers businesses with data on 100,000+ consumers a year (or 25,000+ if selling data), so most schools are exempt. However, SB 24-041 children’s protections, effective October 1, 2025, apply regardless of size to businesses offering online services, products, or features to known minors under 18. HB 24-1130 biometric rules also cover employers that collect fingerprints or face scans from staff.

Other Colorado rules that catch school owners

Healthy Families and Workplaces Act: paid sick leave of 1 hour per 30 worked, up to 48 hours a year, for all employers. Mandatory 30-minute meal breaks for shifts over 5 hours and 10-minute paid rest breaks per 4 hours. Repayment of training costs is allowed only in limited circumstances under 8-2-113. Teen assistants are covered by the Colorado Youth Employment Opportunity Act hours limits.

What to watch in Colorado

The 2026 non-compete thresholds ($130,014 and $78,008.40) adjust each January. SB 25-083 (effective August 6, 2025) added caps on minority-owner sale-of-business non-competes. The 2027 minimum wage is $15.71. The Colorado AI Act (SB 24-205) covers AI in hiring decisions, with its effective date pushed to June 30, 2026 (status of further delays not confirmed).

The bottom line for Colorado schools

Leave a post-employment non-compete out of ordinary instructor agreements; for that role it is unlikely to be enforceable. For most instructors a student non-solicitation clause will also fail the 60% pay test, so a confidentiality agreement, real control of the student database, and a clear rule against diverting students while still employed are the protections that work.

Sources

• CDLE proposed 2026 PAY CALC Order (7 CCR 1103-14)
• Colorado’s 2026 Non-Compete Salary Thresholds (Mondaq)
• Seyfarth 2026 50-State Non-Compete Desktop Reference
• Kutak Rock: Summary of SB 25-083
• C.R.S. 19-3-304 (mandatory reporters)
• HiveDesk: Colorado Minimum Wage 2026
• Lowenstein Sandler: Colorado tightens rules on minors’ online data

Also for Colorado: Martial arts laws in Colorado · Colorado membership contracts

What every martial arts school staff package should contain

• Offer or employment agreement: the legal employer, the role and duties, workplace, pay, employment status and termination terms, reviewed against local rules. U.S. at-will language does not belong in a Canadian contract.
• Compensation schedule: hourly or salary terms, commissions and bonuses, and exactly when each is earned and paid. Record all working time, not only time on the mat. See instructor pay structures and overtime.
• Appearance and conduct policies: functional uniform, hygiene and safety standards with a written accommodation process. See the dress code and grooming guide.
• Child-protection policy: boundaries, private communications, transport, supervision and reporting. See the conduct clause guide and background checks for instructors.
• Confidentiality and data-security agreement: student records, CRM access, permitted use, return and deletion, and protected-disclosure exceptions (in the U.S., the federal DTSA whistleblower-immunity notice). See student data and trade secrets.
• Restrictive-covenant addendum: only what local law permits, usually a narrow student or staff non-solicitation clause; a non-compete only in exceptional cases. See non-compete laws by state and non-solicitation agreements.

Planning for a departure? Read When an instructor leaves: protecting students and records. Every state and province is indexed in the Martial Arts Employment Law Center.

Before you act on this

This article provides general information and is not legal advice. Employment, wage, human-rights, privacy and restrictive-covenant laws change, and their application depends on the exact wording of an agreement, the employee’s duties and pay, where the work is done and when the agreement was signed. Confirm the current statute, regulations and agency guidance, and take advice from a lawyer admitted in the relevant state or province, before drafting, changing or enforcing an employment agreement. Corrections: see our editorial policy.