HOUSE BILL 24-1008
BY REPRESENTATIVE(S) Duran and Froelich, Epps, Brown,
deGruy Kennedy, Garcia, Hamrick, Hernandez, Joseph, Lieder, Lindstedt,
Mabrey, Mauro, Ricks, Rutinel, Story, Velasco, Vigil, Amabile, Bacon,
Bird, Boesenecker, Clifford, Daugherty, Herod, Jodeh, Kipp, Lindsay,
Lukens, Marshall, Martinez, Marvin, McCormick, Ortiz, Parenti, Sirota,
Titone, Weissman, Willford, Young;
also SENATOR(S) Danielson and Kolker, Exum, Gonzales, Marchman,
Sullivan, Cutter, Fields, Jaquez Lewis, Michaelson Jenet, Priola
.
C
ONCERNING MEASURES TO EXPAND GENERAL CONTRACTOR
ACCOUNTABILITY FOR WAGE CLAIMS INVOLVING CONTRACTORS IN
THE CONSTRUCTION INDUSTRY
, AND, IN CONNECTION THEREWITH ,
MAKING AN APPROPRIATION.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. Legislative declaration. (1) The general assembly
finds and declares that:
(a) Wage theft, the failure to pay an employee the employee's legally
earned wages, is the largest form of theft in the United States, and the
Colorado Fiscal Institute estimates that wage theft transfers nearly $728
NOTE: This bill has been prepared for the signatures of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
________
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act. million dollars to employers from the pockets of approximately 438,260
Colorado workers each year. Minor workers, women, and workers of color
are disproportionately impacted by wage theft.
(b) Wage theft not only affects Coloradans' ability to pay rent and
put food on the table, but it also denies our state and local governments
between $25 million and $42 million in revenue each year;
(c) To combat wage theft, the state must keep up with changes in the
marketplace. One of the most significant changes involves the increasing
use of labor market intermediaries to directly employ workers. Too often,
this fissuring of the labor market is used to outsource an employer's
responsibility to workers required by labor and employment laws.
(d) Construction is an industry with extraordinary labor market
fissuring, with layers upon layers of contractors, subcontractors, labor
brokers, staffing agencies, etc. This incentivizes wage theft by favoring
inexpensive subcontractors. It also creates barriers to wage recovery
because undercapitalized subcontractors cannot or will not pay wages.
(e) Due in part to these practices, workers in the construction
industry are disproportionately likely to experience wage theft. Federal
Department of Labor, Wage and Hour Division data show that Colorado's
construction industry has double the number of wage theft violations that
it should have in proportion to the number of workers in the industry. This
is consistent with Colorado Department of Labor and Employment data
showing that while only 7% of Colorado workers are in construction,
construction workers make up 17% of administrative wage theft complaints
that are found valid after a full agency investigation.
(f) Federal data also show that in fiscal years 2022 and 2023, the
construction industry saw the highest dollar amount of wage theft of any
industry, totaling over $35 million in federal fiscal year 2023 alone. In
addition, the construction industry has among the highest number of
individual workers who are victims of wage theft.
(g) To effectively combat wage theft in the construction industry,
the state needs a tailored solution to ensure not only that workers have
substantive legal protection against wage theft, but also that the state has the
right alignment of business incentives to prevent wage theft before it
PAGE 2-HOUSE BILL 24-1008 happens and the right access to capital to ensure that workers can recover
stolen wages;
(h) Creating general contractor accountability for wage theft
committed on their projects by a subcontractor at any tier provides such a
tailored solution. Such accountability will enlist general contractors in the
fight against wage theft, incentivize engagement with law-abiding
subcontractors who pay their workers correctly, and encourage general
contractors to root out bad actors who underbid for contracts knowing they
will make up the difference by denying their workers the wages they earned.
(i) While creating general contractor liability for wage claims, this
act will also ensure that general contractors can efficiently seek
reimbursement from subcontractor employers for any amounts paid out for
wage claims owed to the subcontractors' employees. In this way, the act will
ensure that workers get paid, but will not leave general contractors on the
hook for a subcontractor's wage debts.
(j) This act narrowly focuses on general contractor liability for wage
debts owed to the workers on their projects who were engaged by the
general contractor's subcontractors at any tier. Such liability does not extend
to wage debts owed to the workers of general contractor suppliers or other
business partners. Also, liability for debts owed based on a wage claim or
investigation does not include liability for a subcontractor's retaliatory acts.
(k) This act does not alter the division of labor standards and
statistics' existing obligation to treat a notice of citation or a notice of
assessment issued to an employer for a violation of wage law as a public
record pursuant to section 8-1-115 (1)(b), Colorado Revised Statutes, and
does not require the additional publication of a notice of citation or a notice
of assessment issued to a general contractor that is not the employer of an
employee who is the victim of wage theft; and
(l) With this act, Colorado hopes not only to ensure that workers get
paid their legally earned wages, but also to partner with the many general
contractors who are abiding by the law and want to ensure all workers on
their job sites are paid in full and on time.
(2) Therefore, the general assembly declares that wage theft is an
unacceptable business practice, and the state should use or adopt all
PAGE 3-HOUSE BILL 24-1008 available tools to prevent wage theft before it happens and give workers the
means to recover stolen wages.
SECTION 2. In Colorado Revised Statutes, 8-4-101, add (1.5),
(8.7), (11.5), and (12.5) as follows:
8-4-101. Definitions. As used in this article 4, unless the context
otherwise requires:
(1.5) "C
ONSTRUCTION CONTRACT " MEANS AN EXPRESS OR IMPLIED
AGREEMENT
:
(a) F
OR THE CONSTRUCTION , RECONSTRUCTION, ALTERATION,
MAINTENANCE, MOVING, OR DEMOLITION OF ANY BUILDING, STRUCTURE, OR
IMPROVEMENT
; OR
(b) RELATING TO THE EXCAVATION OF OR OTHER DEVELOPMENT OF
OR IMPROVEMENT TO LAND
.
(8.7) "G
ENERAL CONTRACTOR" MEANS ANY PERSON, INCLUDING A
CONSTRUCTION MANAGER
, JOINT VENTURE, OR ANY COMBINATION THEREOF,
ALONG WITH THE PERSON'S SUCCESSORS, HEIRS, OR ASSIGNS, THAT ENTERS
INTO A CONSTRUCTION CONTRACT WITH AN OWNER
. "GENERAL
CONTRACTOR
" INCLUDES AN OWNER THAT ENTERS INTO A CONSTRUCTION
CONTRACT WITH MORE THAN ONE CONTRACTOR OR SUBCONTRACTOR
, IF
SUCH CONTRACT RELATES TO REAL PROPERTY OTHER THAN PROPERTY FOR
WHICH THE OWNER COULD CLAIM THE HOMESTEAD EXEMPTION PURSUANT
TO PART
2 OF ARTICLE 41 OF TITLE 38.
(11.5) "O
WNER" MEANS ANY PERSON WITH AN OWNERSHIP INTEREST
IN REAL PROPERTY
, WHETHER THE INTEREST IS IN FEE, AS VENDEE UNDER A
CONTRACT TO PURCHASE
, AS LESSEE, OR ANOTHER INTEREST OR ESTATE LESS
THAN FEE
.
(12.5) "S
UBCONTRACTOR" MEANS ANY PERSON THAT IS A PARTY TO
AN EXPRESS OR IMPLIED CONTRACT WITH A GENERAL CONTRACTOR OR WITH
A GENERAL CONTRACTOR
'S SUBCONTRACTORS AT ANY TIER TO PERFORM ANY
PORTION OF WORK WITHIN THE SCOPE OF THE GENERAL CONTRACTOR
'S
CONSTRUCTION CONTRACT WITH THE OWNER
, INCLUDING A PERSON THAT
HAS NO DIRECT PRIVITY OF CONTRACT WITH THE GENERAL CONTRACTOR
.
PAGE 4-HOUSE BILL 24-1008 SECTION 3. In Colorado Revised Statutes, 8-4-109, add (3)(a.3)
as follows:
8-4-109. Termination of employment - payments required - civil
penalties - payments to surviving spouse or heir. (3) (a.3) (I) I
F AN
EMPLOYER THAT RECEIVES A WRITTEN DEM AND FOR PAYMENT UNDER
SUBSECTION
(3)(a) OF THIS SECTION IS A SUBCONTRACTOR, THE EMPLOYER
SHALL FORWARD A COPY OF THE WRITTEN DEMAND FOR PAYMENT TO THE
GENERAL CONTRACTOR WITHIN THREE BUSINESS DAYS AFTER RECEIVING THE
WRITTEN DEMAND
. THE EMPLOYER SHALL ALSO SIMULTANEOUSLY SEND TO
THE WAGE CLAIMANT A COPY OF THE CORRESPONDENCE SENT TO THE
GENERAL CONTRACTOR AND THE GENERAL CONTRACTOR
'S NAME AND
ADDRESS
.
(II) A
N EMPLOYER THAT FAILS TO FORWARD A WRITTEN DEMAND FOR
PAYMENT TO A GENERAL CONTRACTOR AS REQUIRED IN SUBSECTION
(3)(a.3)(I) OF THIS SECTION IS SUBJECT TO A FINE OF TWO THOUSAND
DOLLARS
, PAID TO THE GENERAL CONTRACTOR , IN ADDITION TO ANY
AMOUNTS OWED PURSUANT TO SECTION
8-4-110.5 OR ANY OTHER LAW.
SECTION 4. In Colorado Revised Statutes, add 8-4-110.5 as
follows:
8-4-110.5. General contractor responsibility for wage claims in
the construction industry. (1) (a) A
GENERAL CONTRACTOR ENTERING
INTO A CONSTRUCTION CONTRACT IN THIS STATE IS LIABLE FOR ALL
AMOUNTS OWED TO AN EMPLOYEE PURSUANT TO THIS ARTICLE
4 OR ARTICLE
6 OF THIS TITLE 8 FOR THE EMPLOYEE'S LABOR, CONSTRUCTION, OR OTHER
WORK INCLUDED WITHIN THE SCOPE OF THE CONSTRUCTION CONTRACT
,
INCLUDING AMOUNTS OWED BY A SUBCONTRACTOR AT ANY TIER ACTING
UNDER
, BY, OR FOR THE GENERAL CONTRACTOR OR THE GENERAL
CONTRACTOR
'S SUBCONTRACTORS.
(b) T
HE GENERAL CONTRACTOR 'S RESPONSIBILITY UNDER
SUBSECTION
(1)(a) OF THIS SECTION DOES NOT EXTEND TO DAMAGES OWED
FOR RETALIATION COMMITTED BY A SUBCONTRACTOR PURSUANT TO SECTION
8-4-120 (3).
(2) U
NLESS THE VIOLATION IS CAUSED BY THE GENERAL
CONTRACTOR
'S LACK OF PAYMENT TO THE SUBCONTRACTOR IN ACCORDANCE
PAGE 5-HOUSE BILL 24-1008 WITH THE TERMS OF THE CONTRACT BETWEEN THE GENERAL CONTRACTOR
AND THE SUBCONTRACTOR
:
(a) A
SUBCONTRACTOR EMPLOYER SHALL INDEMNIFY THE GENERAL
CONTRACTOR FOR
:
(I) A
LL AMOUNTS OWED BY THE GENERAL CONTRACTOR PURSUANT
TO SUBSECTION
(1) OF THIS SECTION DUE TO THE SUBCONTRACTOR 'S
VIOLATION OF THIS ARTICLE
4 OR ARTICLE 6 OF THIS TITLE 8; AND
(II) ALL ATTORNEY FEES PAID BY THE GENERAL CONTRACTOR TO
DEFEND AGAINST LIABILITY FOR SUBCONTRACTOR VIOLATIONS OF THIS
ARTICLE
4 OR ARTICLE 6 OF THIS TITLE 8;
(b) A
GENERAL CONTRACTOR MAY BRING A CROSSCLAIM FOR
INDEMNIFICATION AGAINST THE SUBCONTRACTOR EMPLOYER IN ANY ACTION
RELATED TO THE WAGE CLAIM
.
(3) A
SUBCONTRACTOR'S FAILURE TO INDEMNIFY THE GENERAL
CONTRACTOR IS NOT A DEFENSE TO ANY ACTION BROUGHT AGAINST THE
GENERAL CONTRACTOR PURSUANT TO SUBSECTION
(1) OF THIS SECTION.
(4) A
GENERAL CONTRACTOR MAY REQUIRE THE FOLLOWING
INFORMATION FROM EACH SUBCONTRACTOR ACTING UNDER
, BY, OR FOR THE
GENERAL CONTRACTOR
:
(a) P
AY DATA SHOWING THE HOURS WORKED , PAY, OVERTIME, AND
DEDUCTIONS FOR EACH INDIVIDUAL WORKER ENGAGED BY THE
SUBCONTRACTOR
, REGARDLESS OF WHETHER THE INDIVIDUAL WORKER IS
CLASSIFIED AS AN EMPLOYEE OR AN INDEPENDENT CONTRACTOR
'S
INDIVIDUAL LABORER
. THE SUBCONTRACTOR SHALL REDACT THESE RECORDS
TO DISCLOSE ONLY THE LAST FOUR DIGITS OF THE INDIVIDUAL WORKER
'S
SOCIAL SECURITY NUMBER OR INDIVIDUAL TAXPAYER IDENTIFICATION
NUMBER
.
(b) C
ONTACT INFORMATION FOR ALL ADDITIONAL SUBCONTRACTORS
THAT PERFORM ANY PORTION OF WORK WITHIN THE SCOPE OF THE
SUBCONTRACTOR
'S CONTRACT WITH THE GENERAL CONTRACTOR OR WITH
ANOTHER SUBCONTRACTOR THAT IS IN PRIVITY OF CONTRACT WITH THE
GENERAL CONTRACTOR
; AND
PAGE 6-HOUSE BILL 24-1008 (c) (I) AN AFFIDAVIT ATTESTING TO WHETHER THE SUBCONTRACTOR
OR ANY OF ITS CURRENT PRINCIPALS HAS PARTICIPATED IN ANY CIVIL OR
ADMINISTRATIVE PROCEEDING WITHIN THE PRECEDING FIVE YEARS THAT
INVOLVED ANY ALLEGATIONS OF A WAGE AND HOUR VIOLATION AGAINST
THE SUBCONTRACTOR OR PRINCIPAL UNDER LOCAL
, STATE, OR FEDERAL LAW;
AND
(II) IF THE PROCEEDING IS COMPLETE , THE OUTCOME OF THE
PROCEEDING
, INCLUDING ANY DAMAGES, FEES, OR PENALTY AMOUNTS PAID
TO WORKERS OR TO A GOVERNMENT AGENCY
.
(5) A
SUBCONTRACTOR'S FAILURE TO COMPLY WITH THIS SECTION
DOES NOT RELIEVE A GENERAL CONTRACTOR FROM LIABILITY UNDER
SUBSECTION
(1) OF THIS SECTION.
(6) (a) N
OTHING IN THIS SECTION DIMINISHES THE RIGHTS ,
PRIVILEGES, OR REMEDIES OF ANY EMPLOYEE UNDER ANY COLLECTIVE
BARGAINING AGREEMENT
.
(b) A
COLLECTIVE BARGAINING AGREEMENT MAY WAIVE THE
REQUIREMENTS OF THIS SECTION IF THE AGREEMENT
:
(I) I
S ENTERED INTO BY A BONA FIDE BUILDING AND CONSTRUCTION
TRADE LABOR ORGANIZATION THAT HAS ESTABLISHED ITSELF OR ITS
AFFILIATES AS THE COLLECTIVE BARGAINING REPRESENTATIVE FOR PERSONS
PERFORMING WORK ON A PROJECT
;
(II) C
ONTAINS A GRIEVANCE PROCEDURE THAT RESULTS IN A FINAL
AND BINDING DECISION
;
(III) M
AY BE USED TO RECOVER UNPAID WAGES ON BEHALF OF
EMPLOYEES COVERED BY THE AGREEMENT
;
(IV) P
ROVIDES FOR THE COLLECTION OF UNPAID CONTRIBUTIONS TO
FRINGE BENEFIT TRUST FUNDS ESTABLISHED PURSUANT TO
29 U.S.C. SEC.
186 (c)(5)
AND (c)(6), BY OR ON BEHALF OF SUCH TRUST FUNDS ; AND
(V) DOES NOT DIMINISH OR IMPAIR THE RIGHTS OF AN EMPLOYEE
PROVIDED UNDER ANY OTHER SECTION OF THIS ARTICLE
4.
PAGE 7-HOUSE BILL 24-1008 SECTION 5. Appropriation. (1) For the 2024-25 state fiscal year,
$55,179 is appropriated to the department of labor and employment for use
by the division of labor standards and statistics. This appropriation is from
the general fund. To implement this act, the division may use this
appropriation for program costs related to labor standards. This amount is
based on an assumption that the division will require an additional 0.5 FTE.
(2) For the 2024-25 state fiscal year, $44,807 is appropriated to the
department of personnel for use by the executive director's office. This
appropriation is from the general fund. To implement this act, the
department may use this appropriation for the purchase of legal services.
(3) For the 2024-25 state fiscal year, $44,807 is appropriated to the
department of law. This appropriation is from reappropriated funds received
from the department of personnel under subsection (2) of this section and
is based on an assumption that the department of law will require an
additional 0.2 FTE. To implement this act, the department of law may use
this appropriation to provide legal services for the department of personnel.
SECTION 6. Act subject to petition - effective date -
applicability. (1) This act takes effect July 1, 2025; except that, if a
referendum petition is filed pursuant to section 1 (3) of article V of the state
constitution against this act or an item, section, or part of this act within the
ninety-day period after final adjournment of the general assembly, then the
act, item, section, or part will not take effect unless approved by the people
at the general election to be held in November 2024 and, in such case, will
take effect July 1, 2025, or on the date of the official declaration of the vote
thereon by the governor, whichever is later.
PAGE 8-HOUSE BILL 24-1008 (2) This act applies to wage claims brought and investigations
commenced on or after the applicable effective date of this act.
____________________________ ____________________________
Julie McCluskie Steve Fenberg
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Robin Jones Cindi L. Markwell
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
(Date and Time)
_________________________________________
Jared S. Polis
GOVERNOR OF THE STATE OF COLORADO
PAGE 9-HOUSE BILL 24-1008