“The Bomb Cyclone” - New Employment Laws in the 2019 Colorado Legislative Session

June 4, 2019

In the 2019 Colorado Legislative Session, the Colorado Legislature passed several key employment related laws that will significantly affect employers.  Workplace legislation was a priority for Democratic legislators, who held a majority in the Colorado Senate and House of Representatives, and also for the new Governor, Jared Polis.

Senate Bill 19-085, “Equal Pay for Equal Work,” prohibits discrimination in compensation based on sex, similar to the federal Equal Pay Act, but applies to all employers in Colorado.  Wage differentials based on sex are prohibited unless the employer proves that the differential is the result of a seniority system, a merit system, or a system that measures earnings by quality or quantity of production; this must be reasonable and prior wage history must not have been used justify wage differentials.  The law also prohibits an employer from inquiring about compensation history of job applicants.  Aggrieved employees can bring a private right of action for economic damages (the difference in pay), liquidated damages in the amount of the economic damages, equitable relief (such as reinstatement), costs, and attorneys’ fees.  If the employer proves that it acted in good faith, the court may not award liquidated damages.  In addition, the law requires employers to post, announce, or otherwise make known all “advancement opportunities,” such as promotions, and the pay ranges and benefits associated with them.  The Department of Labor has enforcement authority over this part of the law and could impose fines, but there is no private cause of action.  In order to give employers sufficient time to change their practices to ensure compliance, the law will take effect January 1, 2021.

House Bill 19-1025, commonly known as “Ban the Box,” prohibits an employer from advertising that a person with a criminal history may not apply, making such a statement on an employment application, or inquiring about criminal history on an initial employment application.  Background checks are not prohibited.  There are exceptions for situations in which the law prohibits individuals with certain criminal convictions from being employed for a position, the position is designated by the employer for participation in a program to encourage the employment of individuals with criminal records, and the employer is required by law to conduct a criminal background check for the position.  Enforcement is by the Department of Labor with fines and penalties set forth in the bill.  The bill states that it does not establish a private right of action, does not create a protected class under the Colorado Anti-Discrimination Act (“CADA”), and that a violation cannot be used as evidence of a CADA violation.  It will take effect on September 1, 2019 for employers with 11 or more employees, and on September 1, 2021 for those with fewer than 11 employees.

House Bill 19-1267, which was billed as an “anti-human trafficking law,” amended the Colorado Wage Claim Act to increase criminal penalties for “wage theft” and to impose personal liability on certain individuals who act on behalf of the employer regarding wages.  It increases the existing criminal penalty from a misdemeanor to a felony.  It also removes language that provided that a crime is not committed if the employer is unable to pay due to a bankruptcy or similar proceeding.  In addition, it changes the definition of employer to track the definition under the federal Fair Labor Standards Act.  This subjects certain individuals acting on behalf of the employer to claims for unpaid wages, penalties, and attorneys’ fees to the same extent as the employer.  However, it is more limited than the definition originally proposed, which was opposed by CO-SHRM and several business organizations, which could have encompassed lower level employees (such as, possibly, office managers and payroll administrators) who have no control over whether employees are paid their earned compensation.  The law becomes effective January 1, 2020.

Senate Bill 19-188, the Family and Medical Leave Insurance Act (“FAMLI”), did not pass as originally intended.  While the version introduced by the sponsors would have created a paid family and medical leave program applying to all employers in Colorado, the bill was amended to provide only for a study.  The amended version requires the Governor and General Assembly leaders to appoint a 14-member task force by July 1, 2019 to study the program and make recommendations to the Legislature.  The Governor has not signed the bill yet, but is expected to do so.  The sponsors are likely to push for the program to become law next session.

The new laws significantly increase the compliance burden for Colorado employers and their exposure to claims by employees.  Employers should take steps to make sure they understand the new laws and comply with them, seeking advice from competent legal counsel when appropriate.

In 2020, the Democrats will maintain control of the Legislature and Governor Polis will be in the second year of his term.  The 2020 Legislative session promises to be at least as eventful as this year’s.  More information can be found on the Colorado Legislature’s website: https://leg.colorado.gov/.