The 2025 Colorado legislative session concluded on May 7, 2025. This latest session has brought a series of significant updates that are poised to reshape the compliance landscape for employers across the state. Among the enacted bills, several are set to introduce new requirements and labor standards compelling employers to adapt swiftly. The vetoed bills, on the other hand, highlight ongoing debates that may signal future changes.
Below we summarize the major bills affecting employers that were either passed or vetoed by Governor Jared Polis.
Bills Enacted
Notable bills that the Governor signed this legislative session are listed below.
1. Changes to the Paid Family and Medical Leave Insurance Act “FAMLI” (SB 25-144)
Senate Bill 25-144 changes Colorado’s FAMLI program in two ways. First, starting January 1, 2026, an additional twelve weeks of paid family medical leave will be available for parents of children receiving inpatient care in a neonatal intensive care unit (“NICU”). Second, beginning in 2026, FAMLI premiums will be adjusted from 0.9% of wages per employee to 0.88%. Future premium amounts will be established annually, not to exceed 1.2% per employee.
2. Enforcement of Wage and Hour Laws (HB 25-1001)
House Bill 25-1001 amends Colorado wage and hour laws to expand worker protections and employer penalties. Key changes that will go into effect on August 6, 2025, include:
Expanding the definition of employer: An employer subject to Colorado’s wage laws (and its penalties) will now include individuals who own or control at least 25% ownership interest in the employer entity. However, this provision does not apply to a minority owner who has fully delegated their authority to control the day-to-day operations of the employer entity.
Raising the cap for administrative claims: Beginning July 1, 2026,the cap for wage claims adjudicated by the Colorado Department of Labor and Employment (“CDLE”) will increase from $7,500 to $13,000 through December 31, 2027. Starting in 2028, administrative claim limits will increase by $1,000 (or more) every other year to account for inflation.
Setting a new standard for employers to recover costs and attorneys’ fees in wage disputes: Where an employer pays all amounts demanded in good faith within 14 days of an employee’s demand, the employer may recover its costs and attorneys’ fees in an associated dispute if a court finds that the employee’s wage claim is “lacking substantial justification.” The bill does not define “lacking substantial justification.” Previously, an employer could recover such costs and fees if it made payment within 14 days of a demand and the employee failed to recover a greater amount in a subsequent court proceeding.
Adding new transparency requirements: The bill requires the CDLE to publish information about adjudicated wage violations on the CDLE’s website. Further, the CDLE must report an employer’s willful violation not remedied within 60 days to any government agency that can deny, withdraw, or otherwise limit the employer’s business license, permit, registration, or other credentials, which may impact the employer’s ability to operate in the state.
Encouraging local enforcement: A city, county, or city and county may enact and enforce enhanced laws relating to the payment of wages for work performed within its jurisdiction.
Heightening protections against retaliation: The bill expands retaliation protections to cover any person or entity that is regularly engaged in a business or commercial activity that contracts for labor, not just direct employers. The bill also extends anti-retaliation protections to employees or workers who raise “concerns in good faith” about compliance with wage and hour laws. Further, retaliation may be presumed if an adverse action occurs within 90 days of a worker’s protected activity. Last, available remedies have been expanded to include compensatory damages for other either economic or noneconomic loss.
Increasing the penalties for employers who willfully misclassify workers: Employers found to have willfully misclassified an employee as a non-employee may be fined up to $5,000 per offense. Violations not remedied within 60 days will incur an additional $10,000 fine per offense. Employers facing subsequent violations within five years may incur fines between $25,000 and $50,000.
Authorizing the CDLE to waive employer penalties: Under the Colorado Wage Claim Act, employers are subject to significant statutory penalties if they do not pay wages or other compensation owed within 14 days of receiving a demand for the same. HB 25-1001 amends the Act to allow the CDLE to waive such penalties if an employer remits payment within 14 days of being served with an administrative claim for the same wages. The CDLE, however, is not permitted to waive penalties if the employer previously failed or refused to pay wages owed within the previous five years.
3. Limitations on Restrictive Employment Agreements (SB 25-083)
Senate Bill 25-083 allows for physicians, dentists, and advanced practice registered nurses to be exempt from noncompete and non-solicitation agreements, regardless of the current highly compensated individual exemptions. Further, healthcare providers are able to disclose certain information to their existing patients related to their departure from a medical practice. This includes their continued practice of medicine, their new professional contact information, and the patients’ right to choose a healthcare provider. These amendments apply to covenants not to compete entered into or renewed on or after August 6, 2025.
Find a deeper analysis on SB25-083 here.
4. Legal Protections for Transgender Individuals (HB 25-1312)
House Bill 25-1312, formally titled the Kelly Loving Act, expands legal protections for transgender individuals in Colorado. The Act codifies that a chosen name can reflect gender expression, which is a protected class under the Colorado Anti-Discrimination Act.
These changes went into effect on May 16, 2025.
5. Local Governments Tip Offsets for Tipped Employees (HB 25-1208)
Starting on July 1, 2025, House Bill 25-1208 requires that any local government in Colorado that sets a minimum wage higher than the state minimum wage to apply a tip offset of $3.02, which is the amount established in the Colorado Constitution. Beginning July 1, 2026, the bill allows local governments in Colorado to set the tip offset amount when enacting higher minimum wage laws, provided however that any increase does not result in tipped employees earning less than the state minimum wage minus $3.02.
6. Agricultural Worker Service Providers’ Access to Private Property (SB 25-128)
Senate Bill 25-128 repeals portions of a 2021 law that previously allowed union organizers, legal advocates, and other “key service providers” to access agricultural workers on an employer’s private property. The bill still prohibits an employer from interfering with agricultural workers’ access to such key service providers at any location “other than the employer’s property” which is property where the employer holds ownership, possessory interest, or a right to exclude. However, the bill also now clarifies that employers cannot block agricultural workers from using remote services, like telehealth appointments, on the employer’s property.
The bill went into effect on May 29, 2025.
7. Future Changes to Workers’ Compensation Law (HB 25-1300)
House Bill 25-1300 amends the state’s workers’ compensation law by introducing significant changes in 2028 to the selection of authorized treating physicians and the approval of a physician’s medical service request.
Selection of treating physicians: Under current law, employers who pay the full costs for workers’ compensation care can present injured workers with a list of four potential physicians from which the employee can select to receive treatment. Beginning in 2028, injured workers are given the freedom to select any physician accredited by the Division of Worker’s Compensation (“DWC”), subject to certain distance limitations. Within seven days of learning about a workplace injury, employers or their insurers must tell the injured worker about their right to choose a treating physician and where to access the DWC’s list of accredited physicians. If an employee does not designate a physician within seven days, the employer or insurer may make the designation. However, after a physician designation is made (by the employee or employer/insurer), the injured worker may change the physician designation once within 120 days (90 days currently), provided they have not achieved maximum medical improvement.
Standardized guidelines for medical requests: The amendments mandate that employers or their insurers use the DWC’s standards when deciding whether to approve medical treatment requested by an injured worker’s physician. If an employer fails to use the DWC’s standards, the division may approve the treatment and require the employer or insurer to pay for it.
The amendments will take effect on January 1, 2028. When signing the bill, however, Governor Polis called for the creation of a working group to recommend potential changes.
8. Vocational Rehabilitation Services (HB 25-1018)
Currently, the Colorado Division of Vocational Rehabilitation (“CDVB”) provides vocational rehabilitation services to individuals who meet certain requirements. House Bill 25-1018 amends the rules regarding to whom rehabilitation services will be provided. Changes include:
Elimination of certain financial requirements: Individuals with a disability who do not require financial assistance will now be able to participate. However, the CDVB may consider an individual’s financial need before providing services during periods of cost containment to prevent or manage a waitlist for services. Also, an individual with a disability or the individual’s legally and financially responsible relative will no longer have to contribute toward the cost of their services to the extent that they are financially able.
Elimination of certain logistical requirements: The Act ends the requirement that the CDVB provide services only to individuals who are present in Colorado at the time of filing an application and can satisfactorily achieve rehabilitation.
The bill will take effect on August 6, 2025.
9. Repeal Recovery-Friendly Workplace Program (SB 25-232)
Senate Bill 25-232 repeals the Recovery-Friendly Workplace Program, which aimed to help employers respond to substance use, mental health, and addiction in the workplace and the community. Employers taking part in the Recovery-Friendly Workplace Program should take note that program-related resources and support will no longer be available after July 1, 2025, when the bill takes effect.
Bills Vetoed
Notable bills that Governor Polis vetoed this legislative session are listed below.
1. Worker Protection Collective Bargaining (SB 25-005)
Senate Bill 25-005 sought to eliminate the second election requirement to form a union under Colorado’s Labor Peace Act. While federal law only requires a simple majority vote in a first election for workers to form a union, Colorado is the only state that requires a second election with higher thresholds before workers can negotiate mandatory union dues deductions from workers’ paychecks, regardless of their membership status.
Governor Polis vetoed the bill, citing his support for the Labor Peace Act and the stability it promotes in the relationship between employers and unions. Governor Polis also stated that he remains open to changes to the Act that will more fairly allow workers to choose union security.
2. Transportation Network Company Consumer Protection (HB 25-1291)
House Bill 25-1291 aimed to increase safety measures for rideshare passengers and drivers. The bill would have imposed numerous requirements on rideshare companies including conducting more stringent and frequent background checks on drivers, ensuring that drivers and riders can opt-in to audio and video recordings of their rides, and permitting individuals to sue for sexual misconduct or assault instead of defaulting to arbitration.
Governor Polis vetoed the bill, noting his interest in ensuring that rideshare companies will continue to operate in the state. He also cited significant concerns around the audio and visual recording provisions, and their potential conflicts with other state privacy laws.
Summer associate Pema St. Germain contributed to this update.
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