The Colorado General Assembly adjourned on May 7, 2025, having passed almost all of the employment-related bills that were considered. The governor has taken action on all of the employment bills. The employment legislation stands as follows:
Signed into Law
As explained in a previous article, this new law strengthens protections for alleged victims of wage theft.
The law 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. The bill also prohibits an employer from making a payroll deduction below a worker's applicable state minimum wage. Under prior statutory language, employers were prohibited from making payroll deductions that resulted in an employee being paid less than the federal minimum wage under the Fair Labor Standards Act (FLSA). Under the new law, that minimum wage will presumably be Colorado’s minimum wage under the PAY CALC Order or the local minimum wage for localities that have passed such ordinances (e.g., Boulder and Denver, among others).
Current law limits the ability of the Colorado Department of Labor and Employment (CDLE) Labor Standards and Statistics Division director to adjudicate claims for nonpayment of wages or compensation to $7,500 or less. This new law will increase the threshold by increasing the amount to $13,000 for claims filed from July 1, 2026, through December 31, 2027, and in an amount specified by the director to adjust for inflation beginning January 1, 2028.
Notably, the law will require the CDLE, in adjudicating wage claims, to determine whether a violation is willful. For each violation, the law will require the CDLE to publish on its website the names of all employers found to be in violation and whether the violation was willful. If the violation is not remedied within 60 days after the CDLE’s finding that there was a violation, the agency 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.
In addition, the new statute will increase the potential liability for employers who misclassify their employees as non-employees or independent contractors. These employers could face escalating fines from $5,000 for a first violation to as much as $50,000 for repeated offenses.
The law further includes a provision creating a rebuttable presumption of retaliation if an employer takes adverse action against an employee within 90 days of the employee filing a wage claim. This presumption will make defending wage claims more difficult for employers. Employers should exercise caution when considering an adverse action against an employee who has filed a wage claim.
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. Should employers be found to have violated the law, the additional penalties and costs could be significant.
This new statute defines deadnaming and misgendering as discriminatory acts under the Colorado Anti-Discrimination Act (CADA) and prohibits them in places of public accommodation. This also includes places of employment and employers. The penalties already in existence under CADA can now be applied to discrimination claims of misgendering.
While this change to CADA took effect on May 16, a lawsuit has already been filed against it. XX-XY Athletics filed suit in federal court, claiming that this new law violates its First and 14th Amendment rights. The lawsuit asks that Colorado not be able to enforce HB25-1312, but unless the Court orders a stay, it remains in effect. Obviously, there will be more on this law in the future.
This bill adds to the Family and Medical Leave Insurance program (FAMLI) a provision that extends the duration of paid family and medical leave, up to an additional 12 weeks, for a parent who has a child receiving inpatient care in a neonatal intensive care unit.
It also establishes the process for setting the annual premiums. For the 2026 calendar year, the premium rate will be 0.88% and set by the FAMLI Division by September of each year for the next year. The rate, however, is never to exceed 1.2% of wages.
The bill creates a civil cause of action for peace officers who make reports of alleged violations of laws or policy and the report is a contributing factor in an adverse employment action. Beginning January 1, 2026, agencies must provide whistleblowing training and workplace postings about protections.
HB25-1208 (Effective July 1, 2025, but changes allowed January 1, 2026)
This was a controversial bill when introduced, but it was amended into a compromise by making it optional rather than mandatory. Current law allows a local government to establish local minimum wages in excess of the statewide minimum wage established in the state constitution. A local government that enacts a minimum wage must provide a tip offset for tipped employees in an amount equal to the tip offset amount described in the state constitution, which is $3.02.
On and after January 1, 2026, a local government that has enacted a minimum wage ordinance that exceeds the state minimum wage may increase the amount of the tip offset associated with the local minimum wage. However, tipped workers must still earn at least the state minimum wage minus $3.02.
Beginning January 1, 2027, electrical and plumbing employers that employ an apprentice in Colorado are prohibited from registering an apprentice with the employer's respective governing board, unless the apprentice is enrolled in an apprenticeship program training them for an occupation officially recognized by the federal Department of Labor (DOL).
Under current law, there is an exemption from the general prohibition against covenants not to compete. The exemption allows for a covenant not to compete under specified conditions governing an individual who earns an amount of annualized cash compensation equivalent to or greater than the threshold amount for highly compensated workers. The bill excludes from the highly compensated worker exemption a covenant not to compete that restricts the practice of medicine, the practice of advanced practice registered nursing, or the practice of dentistry in this state.
This bill will have consequences for employers related to the workers’ compensation system in two major ways.
The first consequence is to increase responsiveness from insurers. The bill will require an employer (or the employer's insurer) to use the state’s utilization standards when responding to a request for authorization from a treating physician. If an employer or insurer fails to act in accordance with the state's utilization standards when reviewing a request for authorization, the state may deem the services provided by an authorized treating physician as authorized, reasonable, and necessary. The state may then require payment for the services by the employer or insurer.
Most impactful is the second consequence, which is the removal of the four-physician designation rule for workers’ compensation treatment. If enacted, the law will require that immediately upon receipt of notice of an on-the-job injury from an employee who is a resident of Colorado, but not more than seven calendar days after receipt of notice of the on-the-job injury, an employer or insurer must, in written verified form, notify the injured employee of the injured employee's right to designate a treating physician and notify the injured employee where to access the state's list of level I and level II accredited physicians.
The state will create a form to implement the procedure to designate a physician. The employee may designate only a level I or level II accredited physician licensed under the Colorado Medical Practice Act as the employee's authorized treating physician. There are additional rules regarding rural areas and non-residents. If enacted, the change will be effective January 1, 2026.
Vetoed by the Governor
This bill would have eliminated the requirement for a second election to negotiate a union security agreement clause in the collective bargaining process. It would have upended a practice and law that has worked for Colorado for 80 years. The governor has called for compromise. We expect this bill to be introduced in a similar fashion next year.
Jacqueline Talbot is a paralegal for Employers Council.