Thought Leaders: New Colorado Employment Laws

Two new employment laws are now in effect in Colorado. As discussed in more detail below, the Colorado General Assembly has expanded employee rights under the Colorado Wage Age (CWA). In addition, Colorado lawmakers have amended the law applicable to local government tip offsets for tipped employees. Employers would be wise to familiarize themselves with these new laws and consider their potential impact on their business.

Enforcement Wage Hour Laws. Effective August 6, 2025, HB25-1001 expands employee rights under the CWA in multiple areas, including: (1) widening the definition of “employer;” (2) adding remedies available to employees in wage claim cases; (3) increasing the cost of monetary penalties against employers; (4) making it harder for employers to recover attorney fees and costs in cases in which the employer prevails; (5) prohibiting the state from waiving a claim against an employer when a claim is paid if the alleged violation is the second or a subsequent failure or refusal to pay an employee’s wages or compensation in the last five years; (6) requiring the state to publish information about wage claim decisions on its website, including identifying employers by name; (7) allowing the state to report claim results to other governmental entities; (8) expanding the list of entities and individuals who are subject to discrimination and CWA retaliation claims; (9) allowing an employee asserting a CWA retaliation claim to seek damages for economic and noneconomic losses, including those for emotional distress and reasonable attorney fees and costs; (10) requiring the factfinder in a retaliation proceeding to consider the time between an individual’s exercise of a protected activity and an employer’s adverse action which may, without more, be sufficient to find retaliatory intent; and (11) prohibiting employers from retaliating against an employee based on the individual’s immigration status.

Local Governments Tip Offsets for Tipped Employees. Under Colorado law, a local government may establish a local minimum wage above the statewide minimum wage established in the state constitution. A local government that enacts a minimum wage must provide a tip offset for tipped employees in an amount equal to the tip offset amount described in the state constitution, which is $3.02. The legislature recently amended that requirement when it passed HB25-1208. Under the new law, a local government that has enacted a code or an ordinance imposing a minimum wage that is higher than the state minimum wage may increase the amount of the tip offset associated with the local minimum wage. However, local governments are prohibited from imposing a tip offset in an amount that allows a tipped employee to earn less than the state minimum wage minus $3.02. HB25-1208 took effect on July 1, 2025, but applies to local governments on and after January 1, 2026. 

If you have questions about these new laws and their impact on your business, contact BHGR’s Employment Group today.

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