HB 25-1001
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
HB 25-1001: ENFORCEMENT WAGE HOUR LAWS
Prime Sponsors:
Rep. Duran; Froelich
Sen. Danielson; Kolker
Published for: House Finance
Drafting number: LLS 25-0015
Fiscal Analyst:
Colin Gaiser, 303-866-2677
colin.gaiser@coleg.gov
Version: First Revised Note
Date: February 19, 2025
Fiscal note status: The fiscal note reflects the introduced bill. It has been updated to reflect additional
information on wage enforcement costs, including an upper range of costs for enhanced enforcement in
FY 2026-27 and future years.
Summary Information
Overview. The bill modifies state wage and hour laws.
Types of impacts. The bill is projected to affect the following areas on an ongoing basis:
State Revenue
State Expenditures
TABOR Refunds
Appropriations. For FY 2025-26, the bill requires an appropriation of $272,300 to the Department of
Labor and Employment.
Table 1
State Fiscal Impacts
Type of Impact
1
Budget Year
FY 2025-26
Out Year
FY 2026-27
Out Year
FY 2027-28
State Revenue $0 $50,000 $100,000
State Expenditures $318,158 up to $1,296,240 up to $1,286,210
Transferred Funds $0 $0 $0
Change in TABOR Refunds $0 $50,000 $0
Change in State FTE 2.2 FTE 10.7 FTE 10.7 FTE
1
Fund sources for these impacts are shown in the tables below. Page 2
February 19, 2025 HB 25-1001
Table 1A
State Revenue
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
Out Year
FY 2027-28
General Fund $0 $0 $0
Cash Funds $0 $50,000 $100,000
Total Revenue $0 $50,000 $100,000
Table 1B
State Expenditures
1
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
Out Year
FY 2027-28
General Fund $272,300 up to $1,032,826 up to $972,796
Cash Funds $0 $50,000 $100,000
Federal Funds $0 $0 $0
Centrally Appropriated $45,858 $213,414 $213,414
Total Expenditures $318,158 up to $1,296,240 up to $1,286,210
Total FTE 2.2 FTE 10.7 FTE 10.7 FTE
1
Expenditures reflect the upper end of the estimated range.
Summary of Legislation
The bill modifies wage and hour laws in a number of ways as described below.
Definition of Employer
The bill amends the definition of employer to include any individual who owns or controls at
least 25 percent of the ownership interest of a company.
Payroll Deductions
The bill prohibits an employer from making a payroll deduction that drops a worker’s pay below
the applicable minimum wage.
Penalty Waiver and Court Awards
The bill allows the Colorado Department of Labor and Employment (CDLE) to waive, under
certain conditions, the penalty for an employer’s failure to pay claimed wages or compensation
if the employer pays all claimed wages within 14 days. In a civil action for unpaid wages, the bill
allows the court to pursue all available equitable relief for an employee. Page 3
February 19, 2025 HB 25-1001
Wage Claim Threshold
Under current law, the CDLE can receive and adjudicate claims up to $7,500 for nonpayment of
wages and compensation. On July 1, 2026, the bill increases this threshold to $13,000, to be
adjusted annually for inflation beginning January 2028. The bill establishes additional
procedures the CDLE must follow when adjudicating wage complaints, including listing the
employers in violation on the CDLE website, and, where violations are not remedied within
60 days, notifying other agencies of the violation in order to revoke the violating employers’
applicable licenses or permits.
Penalties for Misclassifying Employees as Independent Contractors
For employers found to have misclassified an employee in a way that affects their compensation,
the bill requires these employers to pay the following fines:
$5,000 for a willful violation;
$10,000 for a violation not remedied within 60 days;
$25,000 for a second or subsequent violation within 5 years; and
$50,000 for a second or subsequent violation not remedied within 60 days.
The bill also decreases the amount of time the CDLE must wait before paying an employee out
of the Wage Theft Enforcement Fund from 6 months to 4 months (120 days).
Discrimination Protection
Current law prohibits an employer from discriminating or retaliating against an employee taking
protection under wage and hour laws or the law related to the employment of minors. The bill
modifies these laws to:
amend the definition of employer to include other persons, such as contractors;
require a fact finder to consider the time between an individual's exercise of a protected
activity and an employer's adverse action when determining whether an employer has
retaliated against the employee or worker;
specify that any effort to use an individual's immigration status to negatively impact the
wage and hour law rights, responsibilities, or proceedings of any employee or worker is an
unlawful act; and,
allow the division to order reasonable attorney fees and costs after investigating a
discrimination or retaliation claim.
Comparable Crime Analysis
Legislative Council Staff is required to include certain information in the fiscal note for any bill
that creates a new crime, changes the classification of an existing crime, or creates a new factual
basis for an existing crime. The following section outlines crimes that are comparable to the
offense in this bill and discusses assumptions on future rates of criminal convictions resulting
from the bill. Page 4
February 19, 2025 HB 25-1001
Prior Conviction Data and Assumptions
This bill creates a new factual basis for the existing offense of discrimination or retaliation by
employers, a class 2 misdemeanor. From FY 2021-22 to FY 2023-24, zero offenders have been
sentenced and convicted for this offense; therefore, the fiscal note assumes that there will
continue to be minimal or no additional criminal case filings or convictions for this offense
under the bill. Because the bill is not expected to have a tangible impact on criminal justice
related revenue or expenditures at the state or local levels, these potential impacts are not
discussed further in this fiscal note. Visit leg.colorado.gov/fiscalnotes for more information
about criminal justice costs in fiscal notes.
State Revenue
Department of Labor and Employment
The bill increases state revenue to the Wage Theft Enforcement Fund in the CDLE by an
estimated $50,000 in FY 2026-27 (half-year impact) and $100,000 in FY 2027-28 and subsequent
years as a result of new fines on employers for misclassifying employees. Fine revenue is subject
to TABOR.
The fund is continuously appropriated to the CDLE for the purpose of paying workers who
employers have failed to pay. Based on investigation timelines, it is assumed revenue will not
accrue to the fund until the latter half of FY 2026-27. While the bill allows any single fine for
misclassifying employees of up to $50,000, large fines are anticipated to be rare. The CDLE may
waive fines to encourage the employer to pay the employee all wages and penalties.
Table 2
State Revenue
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
Out Year
FY 2027-28
Wage Theft Enforcement Fund $0 up to $50,000 up to $100,000
Total Revenue $0 up to $50,000 up to $100,000
Judicial Department
The bill may result in a small increase in civil case filings in the Judicial Department. Any fee
revenue impact is expected to be minimal.
Page 5
February 19, 2025 HB 25-1001
State Expenditures
The bill increases state expenditures in the Department of Labor and Employment by $318,000
in FY 2025-26 and up to $1.3 million in FY 2026-27 and ongoing. These costs, paid from the
General Fund and the Wage Theft Enforcement Fund, are summarized in Table 3 and discussed
below. The bill also minimally increases workload in the Department of Law and the Judicial
Department.
Table 3
State Expenditures
Department of Labor and Employment
Cost Component
Budget Year
FY 2025-26
Out Year
FY 2026-27
Out Year
FY 2027-28
Personal Services $199,226 $865,514 $865,514
Operating Expenses $2,816 $13,696 $13,696
Capital Outlay Costs $26,680 $60,030 $0
Non-Standard Costs $43,578 $93,586 $93,586
Wage Theft Enforcement Fund Payments $0 up to $50,000 up to $100,000
Centrally Appropriated Costs $45,858 $213,414 $213,414
Total Costs $318,158 $1,296,240 $1,286,210
Total FTE 2.2 FTE 10.7 FTE 10.7 FTE
Department of Labor and Employment
Staff Background and Assumptions
The Division of Labor Standards and Statistics (DLSS) in the CDLE investigates complaints and
enforces the state’s wage and hour laws. The fiscal note assumes that this bill will generate
enough workload for 2.2 FTE in FY 2025-26 and at least 5.0 FTE in the first full implementation
year, FY 2026-27. However, because the goal of the legislation is to also bolster wage theft
enforcement, an additional 5.7 FTE may be appropriated to the DLSS in FY 2026-27 and future
fiscal years. The minimum cost of this FTE is $599,323 in FY 2026-27 and ranges up to the totals
shown in Table 3 above, depending on how much the General Assembly wants to allocate for
enforcement.
Program Management
Staff will include up to 1.5 FTE in ongoing years for program management staff to create and
manage a new unit for additional high-dollar claims; create internal processes and policies; train,
manage, and assign work to the compliance investigators; and fulfill the reporting and
notification requirements in the bill. Page 6
February 19, 2025 HB 25-1001
Compliance Investigators
Staff will also include up to 7.2 FTE in ongoing years for compliance investigators to investigate
claims related to worker misclassification, the increased claim threshold, and the expansion of
the range of individual owners co-liable for unpaid wages.
Policy Advisors
Finally, staff will include up to 2.0 FTE in ongoing years for two policy advisors. One policy
advisor will collaborate with compliance investigators, develop internal and external guidance
material, and provide policy consulting to staff; and the other advisor will be a lead investigator
on new types of retaliation investigations. The CDLE has discretion as to how many retaliation
claims it will accept and receive, so this fiscal note assumes it will limit the number of
investigations to what this policy advisor can address.
Standard Operating and Capital Outlay Costs
All standard operating and capital outlay costs are included, and the fiscal note assumes a
September 2025 start date for all positions that begin in FY 2025-26.
Non-Standard Expenditures
The CDLE requires funding for additional non-standard costs, including worksite travel for
compliance investigators, transcriptions and translations of outreach materials into Spanish,
payment administration, and software licenses for new staff.
Wage Theft Enforcement Fund
The fiscal note assumes any additional revenue collected in the Wage Theft Enforcement Fund
will go toward the disbursement of wages, compensation, or other monetary relief owed to
employees. See State Revenue section for details on new revenue collection.
Other Agency Impacts
Department of Law
Beginning in FY 2026-27, the bill may increase workload in the Department of Law. Any legal
services to the CDLE related to wage claim investigations will come from appeals to court, which
are rare for these types of cases. These appeals to court would not take place until 2027, and
any impact is expected to be absorbable within existing resources.
Judicial Department
The bills may increase the number of wage claims and increase workload for the trial courts in
the Judicial Department. Any workload increase is absorbable within existing resources.
Page 7
February 19, 2025 HB 25-1001
Centrally Appropriated Costs
Pursuant to a Joint Budget Committee policy, certain costs associated with this bill are
addressed through the annual budget process and centrally appropriated in the Long Bill or
supplemental appropriations bills, rather than in this bill. These costs, which may include
employee insurance, supplemental employee retirement payments, leased space, and indirect
cost assessments, are shown in the expenditure table above.
TABOR Refunds
The bill is expected to increase the amount of state revenue required to be refunded to
taxpayers by the amounts shown in the State Revenue section above. This estimate assumes the
December 2024 LCS revenue forecast. A forecast of state revenue subject to TABOR is not
available beyond FY 2026-27. Because TABOR refunds are paid from the General Fund, increased
cash fund revenue will reduce the amount of General Fund available to spend or save.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed. It applies to conduct occurring on or after this date.
State Appropriations
For FY 2025-26, the bill requires a General Fund appropriation of up to $272,300 to the
Department of Labor and Employment, and 2.2 FTE.
State and Local Government Contacts
Counties
District Attorneys
Judicial
Labor
Law
Personnel
Regulatory Agencies
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit the General Assembly website.