On May 22, 2025, Colorado House Bill 25-1001 was signed into law, which amends the Colorado Wage Claim Act, C.R.S. § 8-4-101, et seq. As a result, August 6, 2025, marks the start of new compliance obligations that dramatically expand the state’s wage enforcement framework. In order to avoid costly penalties and ensure all workplace policies are up to date, Colorado employers should be aware of the following six key changes, among others:
1. Expanded “Employer” Liability
Individuals who own or control 25% or more of a business may now face personal liability for wage violations. This does not apply to minority owners who fully delegate their authority to control day-to-day operation of the business.
2. Minimum Wage Deduction Limits
Employers may not deduct wages if doing so would reduce a worker’s pay below state or local minimum wage thresholds. The previous statutory language referred to the federal minimum wage (which is less than half of the current state minimum wage threshold), meaning the minimum wage threshold for deductions has more than doubled.
3. Increased Penalties for Misclassification
Willfully misclassifying employees as independent contractors can now result in fines from $5,000 to $50,000 per violation, with amounts increasing for repeat offenses or failure to remedy within 60 days.
4. Broader Enforcement and Public Exposure for Wage Adjudication
The Colorado Department of Labor and Employment (CDLE) can now adjudicate wage claims up to $13,000 (with annual adjustments), so long as they are filed on or after July 1, 2026. This is nearly double the previous cap of $7,500. Further, employers with willful violations will now be publicly listed online and referred for licensing action (which could result in removal of the employer’s license if the violation is not remedied within 60 days).
5. Creation of a Statutory Presumption
If financially feasible, the EB-5 Investor Visa offers a path forward. An investment of $800,000 allows concurrent filing for Adjustment of Status. Within 6–8 months, you may obtain a work permit not tied to a specific employer, and green cards for you and qualifying family members may be granted within 24–36 months.
6. 14-Day Penalty Waiver
One piece of good news for employers: the CDLE can now waive penalties assessed to employers for late wage payments if(1) the employer pays within 14 days of receiving a formal claim filed with the CDLE; and (2) the employer has no history of prior violations within the past five years. This creates a more easily recognizable formal demand trigger for the 14-day clock (as compared to previous, sometimes informal, written demands) and rewards employers with otherwise spotless records of compliance.
Action Items for Employers:
In light of the significant changes effectuated by Colorado House Bill 25-1001, employers should consider taking the following proactive measures:
- Review and revise payroll, deduction, and worker classification practices.
- Evaluate ownership and operational control structures for potential personal liability.
- Train managers on retaliation risks and complaint handling.
- Act quickly to resolve formal wage claims to preserve safe harbor relief.
