Don’t Overlook Colorado’s Legislative Efforts Amid Federal Focus

While Federal Employment/Human Resources Bills May Be Drawing All the Headlines, Don’t Sleep on Legislative Efforts in Colorado

By Michael Santo, COSHRM Legislative Director and Managing Attorney at Bechtel & Santo

There’s an old expression that goes, “out of the frying pan and into the fire.”  These days, Colorado employers may be wondering when it comes to proposed employment/human resources legislation whether they are in the “frying pan” or the “fire.”  After all, while the federal government, through Executive Orders from President Trump, address DEI and immigration matters, the Colorado legislature is focusing its efforts on a number of bills that concern other matters. 

Initially, on January 21, 2025, President Donald Trump issued an Executive Order that identified the intent to terminate most Diversity Equity and Inclusion (“DEI”) initiatives in the federal government.  While the Order mostly concerns federal departments and their agencies, the law does have implications regarding DEI programs in the private sector.  That is, the Order identified that all agencies must “enforce [the Country’s] longstanding civil rights laws and to combat illegal private sector DEI preferences.”  So, the President’s Order does not state that DEI programs in private organizations are illegal. Instead, the Order sought to deter DEI programs that constitute illegal/unlawful discrimination, often referred to as “unlawful reverse discrimination.”  Of course, the “Country’s civil rights laws” referred to in the Executive Order is a reference to the protections against discrimination, harassment, and retaliation based on certain protected classifications (e.g., sex, race, national origin), as identified in Title VII of the 1964 Civil Rights Act.  This Executive Order has already been the subject of a number of litigations wherein parties requested courts to limit the Executive Order or strike it down.  So, this is far from a settled landscape. 

While those efforts were being undertaken in the federal government, back in Colorado, the Colorado Senate proposed a bill (i.e., Colorado Worker Protection Collective Bargaining (SB25-005)) that would repeal a Colorado labor law that has been in place since the early 1940s.  The existing bill, which is known as the Colorado Labor Peace Act, requires a union to win two votes approving the union, with the second requiring an affirmative vote of 75% of the employees, before all employees are required to pay dues. Colorado is the only state to require two organizational votes: one to form a union, and a second to collect mandatory fees for representing workers. Colorado Republicans say the law keeps the state competitive, but Colorado Democrats counter that the two votes is an unnecessary hurdle that discourages unionization. The proposed bill (i.e., SB25-005) would eliminate the second vote (i.e., only one vote would be required).  Recently, the Colorado Senate Bill passed the bill on third reading with amendments.  So, it should soon be heading to the Colorado House of Representative. 

While the Colorado Senate addresses the Colorado Worker Protection Collective Bargaining bill, the Colorado House of Representatives has propounded a bill that would modify the Colorado Wage Act, which covers most state wage issues.  This bill would greatly amend Colorado’s Wage Act by providing increased penalties against employers who incorrectly classify a worker as independent contractors when the worker should be classified as an employee.  For example, the bill would implement the following fines for Colorado employers that engage in such misclassifications:

• For a willful violation, $5,000
• For a violation not remedied within 60 days after the division's finding, $10,000
• For a second or subsequent willful violation within 5 years, $25,000
• For a second or subsequent willful violation not remedied within 60 days after the division's finding, $50,000.

The bill would also provide employees more opportunities to file claims against their employers with the Colorado Department of Labor and Employment instead having to file those claims in Court by raising the maximum threshold from $7,500, which is the current threshold, to $13,000 in 2026.  The bill would also require the Colorado Division of Labor to determine if a claimed violation of the state’s wage law is a “willful” violation.  Then, for each willful violation, the Division Director shall publish on the Division’s website the names of all employers determined to be in violation and whether the violation was willful.  If 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 would also repeal language allowing a court to award an employer reasonable costs and attorney fees in a civil action for unpaid wages or compensation in certain circumstances. Finally, the bill also includes anti-retaliation measures for undocumented workers who report wage claims. 

In addition to these bills and Orders, the Colorado legislature is seeking to amend current law regarding noncompete agreements, particularly with respect to physicians. 

In short, the year has just begun, but efforts to modify existing employment/human resources law seem to crop up every day.