During the recently concluded 2025 legislative session, Colorado lawmakers passed HB25-1001 concerning the enforcement of wage and hour law. The bill will make it easier for alleged victims of wage theft to recover wages through the claims process and for the Colorado Department of Labor and Employment (CDLE) to punish employers that violate Colorado’s Wage Claim Act (WCA).
Governor Jared Polis signed the measure on May 22, and it takes effect on August 6, 2025.
The bill makes significant changes to current law, including a prohibition on employers from making a payroll deduction below a worker’s applicable minimum wage. It also amends the definition of "employer" for purposes of wage and hour laws to include an individual who owns or controls at least 25% of the ownership interest in an employer. This change could make investors in an organization subject to liability for wage claims unless they are minority owners who can demonstrate full delegation of their authority over day-to-day operations of the business.
Current law limits the ability of the CDLE to adjudicate claims for nonpayment of wages or compensation to $7,500 or less. This bill increases this amount to $13,000 for claims filed from July 1, 2026, through December 31, 2027, and in an amount specified by the director of the wage and hour division to adjust for inflation beginning January 1, 2028.
Notably, the bill requires the CDLE, in adjudicating wage claims, to determine whether a violation is willful. For each violation, the bill requires the director to publish on the division's website the names of all employers found to be in violation and whether the violation was willful; and if the violation is not remedied within 60 days after the division's finding that there was a violation, the division must notify all government bodies with the authority to deny, withdraw, or otherwise limit or impose remedial conditions on the employer's license, permit, registration, or other credential.
The bill also adds additional punishment for employers caught misclassifying their employees as non-employees or independent contractors. These employers could face escalating fines from $5,000 for a first willful violation to as much as $50,000 for repeated offenses.
Additionally, the bill creates a rebuttable presumption of retaliation if an employer takes adverse action toward an employee within 90 days of the employee filing a wage claim. It also introduces compensatory damages for economic and non-economic harm for employers engaging in discrimination or retaliation against employees engaging in any legally protected activity under the law.
Takeaway for Employers
The penalties are a significant increase over the current penalties provided for under the law. Employers in Colorado can expect to see an increase in wage claims filed in the years ahead, and should employers be found to have violated the law, the additional penalties and costs could be significant.
The rebuttable presumption of retaliation will make defending wage claims much more difficult for employers. Moving forward, employers will need to be very cautious about taking an adverse action against an employee who has filed a wage claim. If you need assistance with the Colorado Wage Act and wage and hour law compliance, please reach out to an Employers Council attorney.
Dustin Brown is an attorney for Employers Council.