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 Second Reading
Drafting number: LLS 25-0015
Fiscal Analyst:
Erin Reynolds, 303-866-4146
erin.reynolds@coleg.gov
Version: Third Revised Note
Date: March 31, 2025
Fiscal note status: The revised fiscal note reflects the reengrossed bill. It has been updated to reflect new
information and assumptions.
Summary Information
Overview. The bill modifies state wage and hour enforcement 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 $328,210 to the Colorado
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 $386,774 $1,232,899 $1,186,209
Transferred Funds $0 $0 $0
Change in TABOR Refunds $0 $50,000 not estimated
Change in State FTE 2.8 FTE 10.7 FTE 10.7 FTE
1
Fund sources for these impacts are shown in the tables below. Page 2
March 31, 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 (Wage Theft Enforcement Fund) $0 $50,000 $100,000
Total Revenue $0 $50,000 $100,000
Table 1B
State Expenditures
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
Out Year
FY 2027-28
General Fund $328,210 $1,019,485 $972,795
Cash Funds $0 $0 $0
Federal Funds $0 $0 $0
Centrally Appropriated $58,564 $213,414 $213,414
Total Expenditures $386,774 $1,232,899 $1,186,209
Total FTE 2.8 FTE 10.7 FTE 10.7 FTE
Summary of Legislation
The bill modifies wage and hour laws and how these are enforced 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. It also adds an exemption for a
minority owner that delegates day-to-day operational authority to an employer.
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
March 31, 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.
The bill clarifies that local governments are not restricted from enforcing laws or ordinances
related to wage payments, and that local governments may enact laws related to wage
payments provided they do not reduce employee protections or benefits established in state
law.
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. Page 4
March 31, 2025 HB 25-1001
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.
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 is estimated to increase state revenue to the Wage Theft Enforcement Fund in the CDLE
by $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 Page 5
March 31, 2025 HB 25-1001
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.
State Expenditures
The bill increases state expenditures in the CDLE by about $387,000 in FY 2025-26, and by about
$1.2 million in FY 2026-27 and ongoing. These costs, paid from the General Fund, are
summarized in Table 3 and discussed below. The bill also minimally increases workload in 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 $255,698 $865,513 $865,513
Operating Expenses $3,584 $13,696 $13,696
Capital Outlay Costs $33,350 $46,690 $0
Other Staff-Related Costs $35,578 $93,586 $93,586
Centrally Appropriated Costs $58,564 $213,414 $213,414
Total Costs $386,774 $1,232,899 $1,186,209
Total FTE 2.8 FTE 10.7 FTE 10.7 FTE
Department of Labor and Employment
The Division of Labor Standards and Statistics (DLSS) requires 2.8 FTE in FY 2025-26 and 10.7 FTE
in FY 2026-27 and ongoing to implement the bill. Staffing levels reflect DLSS’ mandatory duty to
investigate individual claims, and its discretion regarding the number of systemic violations and
retaliation cases it investigates. Standard operating and capital outlay costs are included.
First-year staff costs are prorated based on staggered start dates.
Wage Claims and Employer Liability
Increasing the wage claims cap from $7,500 to $13,000 is projected to result in an additional
206 claims annually, representing a 4 percent increase in overall claims. These higher-dollar
claims are anticipated to be complex—involving multiple pay periods, as well as overtime and
employee misclassification issues—requiring an average of 61 hours per claim, which equates to
6.0 FTE. Additionally, expanding the range of individual owners co-liable for unpaid wages is
estimated to yield 24 more claims annually, at 46 hours per claim, which equates to 0.5 FTE. The
bill also creates efficiencies by allowing penalty waivers and removing certain notices, which Page 6
March 31, 2025 HB 25-1001
creates a reduction of 0.3 FTE. Finally, new staff requires 1.0 FTE policy and management
support.
Employee Misclassification
The requirement to impose fines for misclassifying employees as independent contractors will
increase the caseload for DLSS’s direct investigations and complex claims units. DLSS requires
2.0 FTE to investigate employee misclassification leads, which are typically systemic and
complex. Staff will investigate violations, prioritizing cases within the scope the division’s
resources.
Retaliation Law
The expansion of retaliation laws will increase the division's workload. DLSS typically receives
about 360 retaliation claims annually. Since DLSS has discretion over which retaliation claims to
pursue, 1.0 FTE will be required to investigate violations, prioritizing cases within the scope of
the division’s resources.
Posting Violations and Reporting
To comply with the requirement to post violations on the CDLE website and report certain
information to licensing authorities, DLSS requires 0.5 FTE.
Other Staff-Related Costs
The DLSS will have a variety of other costs associated with its expanded duties under the bill,
including worksite travel for compliance investigators, translation and transcription of outreach
materials into Spanish, payment administration, and software licenses for new staff.
Wage Theft Enforcement Fund
Any revenue collected in the Wage Theft Enforcement Fund under the bill will go toward the
disbursement of wages, compensation, or other monetary relief owed to employees. Spending
from the fund has not been estimated. See State Revenue section for details.
Legal Services
Beginning in FY 2027-28, the bill may increase workload in the Department of Law. Any legal
services to the DLSS related to wage claim investigations will come from the appeals process,
which are rare for wage theft cases.
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. Page 7
March 31, 2025 HB 25-1001
Judicial Department
The bill 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.
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
March 2025 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 $328,210 to the Department of
Labor and Employment, and 2.8 FTE. As amended by the Senate Appropriations Committee, the
bill currently includes a General Fund appropriation of $208,979 to the CDLE.
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.