Introduced on the first day of the 2025 legislative session, House Bill 1001 offered a bevy of new weapons against wage theft, including many provisions that business leaders tried for months to make less onerous for employers who could break the law inadvertently.
When the bill finally got its final approvals from the Legislature on Wednesday — the final day of the session — it featured only small changes from the introduced version and threatens still to increase legal liabilities for companies in numerous ways. And frustrated business leaders, who changed their focus in late March from seeking to amend HB 1001 to opposing it because of sponsors’ unwillingness to tweak it, worry that if Gov. Jared Polis signs it as expected, lawsuits targeted at a range of sectors will increase.
The bill is a successor effort from House Majority Leader Monica Duran of Wheat Ridge and fellow Democratic Rep. Meg Froelich of Greenwood Village to their 2024 bill that Polis vetoed. That measure focused on the construction industry and sought to make general contractors liable to pay wages of any workers who got stiffed by unscrupulous subcontractors — a potential penalty for law-abiding firms that Polis said he couldn’t back.
Colorado House Minority Leader Monica Duran and Rep. Meg Froelich discuss their wage-theft bill in the House in April.
How the new wage-theft bill differs from 2024
HB 1001 applies to industries across the board and seeks to address what the Colorado Fiscal Institute calls a $730 million annual wage-theft problem by increasing penalties and lawsuit risks against employers for a variety of actions. And it’s that wide range of potential pitfalls that worries business groups.
“This bill does a great number of things,” said Scott Moss, director of the Colorado Department of Labor and Employment’s division of labor statistics and standards, as he spoke to the Senate Appropriations Committee about the resources that he needs to enforce it. “It’s like a Christmas tree with many ornaments, and each one requires a (full-time employee)”
To be sure, employers are happy to see that the bill will raise the monetary threshold of the wage-theft claims that CDLE can investigate from $7,500 to $13,000 — a boost that is likely to keep more accusations out of court and under administrative review. And most have said as well that they are not overly concerned about CDLE being allowed to publish the names of willful violators on its website, despite Republican opposition to that provision.
Pain points for business leaders
But there are six other major parts of the bill that groups like the Colorado Chamber of Commerce have said will make employers subject to more lawsuits and, as such, continue to drive up the rising costs of doing business in Colorado:
- Employers found misclassifying employees as contractors will be subject to fines that begin at $5,000 for a willful violation and rise to as much as $50,000 per instance for subsequent willful violations that are not remedied within 60 days;
- Enforcement of the law and the ability of workers to file lawsuits against alleged violators will grow from employees to include independent contractors, which will expand the scope of the law substantially;
- Employers who take an adverse action against employees within 90 days of those workers filing a wage-theft complaint will be assumed to be retaliating against them. Business groups sought removal of this clause, but when Duran amended it in the House, she actually expanded the provision to say that workers disciplined more than 90 days after filing complaints also could argue that they were targeted for retaliation;
- CDLE administrators can go beyond lost wages and award compensatory damages and attorneys’ fees in discrimination or retaliation claims;
- Changes to current law make it more difficult for defendant employers to be awarded costs and attorney fees when they argue legal actions against them were meritless; and,
- Complainants will be able to seek damages not just from majority owners of the companies but from minority owners who hold at least a 25% share of the business.
Negotiation process on wage-theft bill has been disappointing
Business leaders can point to just two changes that they felt eased their burden — and then, only slightly.
Colorado state Sens. Chris Kolker and Jessie Danielson discuss their wage-theft bill in the Senate on Tuesday.
A House amendment specified that minority owners must be shown to have authority over day-to-day operations of a company to be targeted in a legal action claiming wage theft. And a Senate amendment added Thursday by cosponsoring Democrats Chris Kolker of Littleton and Jessie Danielson of Wheat Ridge caps non-economic damages on small businesses at the same levels as the Colorado Anti-Discrimination Act — caps starting at $10,000 and going up depending on the employer’s size and the willfulness of the action.
Duran acknowledged the bill is not exactly what everyone wanted, but she said it targets willful and repeat offenders, improves access to justice and protects workers who exercise their right to speak up and file wage-theft complaints. Those complaints are not limited to withholding of pay but can include failure by employers to offer proper breaks and proper benefits as well.
“This bill is very different from last year’s vetoed bill,” Froelich said during House debate on April 1. “Wage theft is bad for good employers who play by the rules and then are underbid by their competitors.”
Another burden on flaying Colorado economy?
Opponents in the business and trades community said, however, that the bill sprays its efforts in so many directions that it’s likely to hit small businesses trying to play by the rules and could burden them enough financially that they could struggle to survive. Even if this year’s version doesn’t overzealously target one sector like the 2024 bill did, its negative impacts could be more widespread, they emphasized.
“It’s obviously illegal to not pay somebody. But then we add more regulations to something that’s not being enforced and then we add penalties for the minority owner, and we’re talking about the possible denial of capital to business,” said Rep. Ken DeGraaf, R-Colorado Springs. “Every one of these restrictions costs an employer money. That makes it difficult to pay employees … The way we get a strong economy is not to have 200,000 regulations and then grow them every time you see something you don’t like.”
The final House vote to concur with Senate amendments and send HB 1001 onto Polis passed along fully partisan, Democrat-led lines. Similarly, the bill passed the Senate along purely party lines on Thursday as well.
Polis has until June 6 to sign or veto all the bills coming out of this session.