Colorado: Recent Legislative Updates

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Quick Look

  • Employees of private employers who are members of the Colorado National Guard or military reserve forces are entitled to the equivalent of three weeks of leave in a calendar year.
  • Employer premium rate for unemployment insurance is reduced by 10% for all rates in the standard premium rate schedule.
  • The POWR Act amends Colorado’s Anti-Discrimination Act by broadening the definition of harassment, providing for certain employer affirmative defenses to harassment claims, adding marital status as a protected classification, clarifying accommodation standards for disabled employees, restricting the use of non-disclosure agreements, and expanding applicable recordkeeping requirements.
  • Colorado’s Healthy Families & Workplaces Act is amended to provide for three additional qualifying reasons for employee paid sick leave.
  • Colorado’s Equal Pay for Equal Work Act is amended to include expanded transparency requirements related to job opportunities, clarification on internal transparency requirements for in-line promotions, a new limited exemption for certain employers with no physical Colorado presence, additional notice requirements for employer disclosures, and an expanded enforcement and statute of limitations provision.
  • Colorado’s Job Application Fairness Act prohibits employers from inquiring about a job applicant’s age, date of birth, and dates of attendance at or graduation from an educational institution during the hiring process, subject to limited exceptions.

Discussion

Through its 2023 legislative session, Colorado has passed several laws that either create new rights for employees or substantially amend existing laws that affect employee rights. Some changes have already gone into effect, where others will become effective as soon as August 7, 2023, so employers should work to revise their policies and practices immediately.

Military Leave – As of March 10, 2023 and under HB 23-1045, Colorado clarified that employees of private employers who are members of the Colorado National Guard or military reserve forces must be permitted to take the equivalent of three weeks off work, as compared to 15 days, in a calendar year for military training. During this leave, the employee must be able to use any paid leave or unpaid leave available to the employee.

Unemployment Insurance – As of May 1, 2023, SB 23-232 reduced the employer premium rate by 10% for all rates in the standard premium rate schedule in accordance with the Federal Unemployment Tax Act. Employers are no longer required to submit premium payment reports; however, employers must now submit wage reports.

Protecting Opportunities and Workers Rights Act – Colorado’s Protecting Opportunities and Workers Rights (POWR) Act will have significant impacts on the enforcement of the Colorado Anti-Discrimination Act (CADA). The POWR Act imposes a broader definition of harassment sufficient to constitute unfair practice and discrimination, creates new requirements for nondisclosure agreements, and imposes new recordkeeping requirements. Beginning August 7, 2023, the following changes to CADA will be effective under the POWR Act:

  • Harassment Definition – “Harassment” constituting discrimination will be added as an option on charge forms as a violation under CADA. To constitute “harassment,” the challenged conduct will need to be subjectively offensive to the individual alleging harassment and objectively offensive to a reasonable person of the same protected class. This new definition departs from the previous “severe and pervasive” standard, representing a broader definition of what conduct may constitute harassment or unfair practices. Harassment will still need to meet one of the following to constitute discrimination: (A) submission to the conduct or communication must be explicitly or implicitly made a term or condition of the individual’s employment; (B) submission to, objection to, or rejection of the conduct or communication must be used as a basis for employment decisions affecting the individual; or (C) the conduct or communication must have the purpose or effect of unreasonably interfering with the individual’s work performance or must create an intimidating, hostile or offensive work environment. All harassment claims are reviewed based on the totality of the circumstances, and the amendments contain a list of factors to consider in the analysis.
  • Affirmative Defenses for Harassment Claims – Under POWR, an employer may assert an affirmative defense to a harassment claim if the employer must establish that it has a program in place that is reasonably designed to prevent harassment, deter future harassers, and protect employees from harassment. To show a program is sufficient under this standard, and employer must demonstrate that: (A) the employer takes prompt and reasonable action to investigate or address the alleged employment practices; (B) the employer takes prompt and reasonable remedial actions in response to complaints of discriminatory or unfair employment practices (when warranted); (C) the employer communicates the existence and details of the program to employees (whether supervisory or non-supervisory); and (D) the employee unreasonably fails to take advantage of said program.
  • Marital Status as a Protected Class – Under POWR, marital status has been added as a protected classification under CADA, meaning employers cannot take any adverse action against an employee based on marital status.
  • Clarification on Disability Discrimination – The POWR Act amends CADA to clarify that it is not a discriminatory or unfair practice for an employer to discharge, promote or demote, or refuse to hire an individual with a disability only whenthere is no reasonable accommodation that would allow the individual to satisfy the essential functions of the job and the disability actually disqualifies the individual from the job.
  • Nondisclosure Agreements – The POWR Act voids new and renewed nondisclosure agreements that limit an employee’s or prospective employee’s ability to discuss or disclose alleged discriminatory or unfair employment practices unless the agreement contains certain provisions. If employers violate the restrictions, employees may sue and recover a penalty of $5,000 for each violation, in addition to actual damages, reasonable costs, and attorneys’ fees. To be compliant, any nondisclosure agreement seeking to limit discussions or disclosures of discriminatory or unfair employment practices must contain all of the following: (1) the provision must apply equally to the employer and the employee; (2) the provision must include an express statement that it does not limit the employee from disclosing the underlying facts of the alleged discrimination or unfair employment practice, including in a settlement agreement, to certain individuals such as immediate family members and attorneys, government agencies, in response to a subpoena, and as otherwise required by law; (3) the agreement must include an express statement that disclosure of the underlying facts of the alleged discrimination or unfair employment practice will not constitute disparagement; (4) the agreement must include a condition stating that if the agreement contains a non-disparagement provision and the employer disparages the employee, the employer may not seek to enforce the non-disparagement or non-disclosure provisions or seek damages against the employee; (5) any liquidated damages provisions, if included, may not constitute a penalty or punishment and the amount must also be reasonable, proportionate, varied based on the severity of the breach, and not punitive; and (6) the agreement must include an addendum attesting to the compliance with each of these requirements. The addendum must be signed by all parties to the agreement.
  • Record-Keeping Requirements – Under POWR, employers are required to preserve personnel or employment records for at least five (5) years after either (1) the date the employer made or received said record, or (2) the date of the personnel action that the record pertains to or the final disposition of a charge of discrimination or any related action, as applicable. Employers must also maintain an “accurate, designated repository” of all writtenor oral complaints of “discriminatory or unfair employment practices.” These records must include the date of the complaint, the identities of the complainant and the perpetrator (if disclosed), and the substance of the complaint.

Paid Sick Leave – Effective August 7, 2023, employees will be entitled to use paid sick leave under Colorado’s Healthy Families & Workplaces Act for three new reasons (in addition to those already in effect). Specifically, SB 23-017 permits employees to also take paid sick leave (1) to grieve, attend funeral services or a memorial, or deal with financial and legal matters that arise after the death of a family member; (2) to care for a family member whose school or place of care has been closed due to inclement weather, loss of power, loss of heating, loss of water, or other unexpected events; and (3) to evacuate the employee’s place of residence due to inclement weather, loss of power loss of heating, loss of water or other unexpected events.

Colorado Equal Pay for Equal Work Act & Pay Transparency – SB 23-105 brings several changes to the Colorado Equal Pay for Equal Work Act (CEPEWA), as outlined below. These amendments become effective on January 1, 2024.

  • Expanded Transparency Requirements – Amendments to CEPEWA under SB 23-105 expand an employer’s obligation to provide notice related to each job opportunity’s compensation, benefits, and application closing date. Specifically, the amendments expand the notification requirement beyond providing the required information for all external job postings (i.e., hourly rate or salary range, description of benefits, and closing date), and require employers to disclose such information in other situations when an employer begins discussions about hiring for a vacant or soon to be vacant position with potential recruits, even in situations where the employer does not externally post an opening. Additionally, employers must “announce, post, or otherwise make known each job opportunity to all employees on the same calendar day and prior to the date of which the employer makes a selection decision.”
  • Clarification on In-Line Promotional Postings – The amendments clarify an employer’s obligation to post internally about in-line promotional opportunities. Specifically, employers only need to internally make the disclosures described above for “job opportunities,” which specifically excludes when an employee’s role changes because of (1) a “career development” change (i.e., a change to an employee’s terms of compensation, benefits, full-time or part-time status, duties, or access to further advancement in order to update the employee’s job title or compensate the employee to reflect work performed or contributions already made by the employee), or (2) a “career progression” change (i.e., a regular or automatic movement from one position to another based on time in a specific role or other objective metrics). However, if a company position involves career progression, employers must disclose and make available to all eligible employees the requirements for career progression for the role (in addition to compensation, benefits, full- or part-time status, duties, and access to further advancement).
  • New Limited Exemption for Out-of-State Employers – Under the amendments, theCEPEWA now provides that, through July 1, 2029, employers with physical locations exclusively located outside of Colorado and less than 15 Colorado-based employees whom all work remotely will only need to provide notice for remote job opportunities.
  • Additional Employee Notice Requirements – The amendments require that, within 30 days after an employer selects a candidate for an open position, the employer must disclose the following information to employees who regularly work with the selected candidate: (1) the name of the selected candidate; (2) the selected candidate’s former job title; (3) the selected candidate’s new job title; and (4) how employees can apply for similar jobs in the future.
  • Updated Statute of Limitations and Enforcement – The amendments expand the CEPEWA’s statute of limitations from three (3) to six (6) years, as well as require the Colorado Department of Labor (CDLE) to create a process to investigate and mediate claims of sex-based wage discrimination.

Job Application Fairness Act – Beginning July 1, 2024, Colorado’s Job Application Fairness Act (JAFA), prohibits employers from inquiring about a job applicant’s age, date of birth, and dates of attendance at or graduation from an educational institution during the hiring process. JAFA’s restrictions apply only “at the time of an initial employment application,” mirroring the limitations on inquiring as to criminal histories under the Colorado Chance to Compete Act. There are some limited exceptions to JAFA’s requirements, in instances where age needs confirmation for occupational qualification, or where such information is required under federal, state, or local law. The law does not maintain a private right of action; however, aggrieved individuals have one year to submit a complaint to the CDLE. Upon finding a violation, the CDLE will order compliance within 15 business days and assess a civil penalty increasing in severity with each subsequent violation (up to $2,500). A violation is determined based on the application not the number of individuals that have applied using the noncompliant application.

Action Items

  1. Implement policies and procedures for state-required military leave.
  2. Review and update unemployment insurance reporting procedures to be consistent with updated reporting requirements.
  3. Update anti-discrimination and harassment policies to account for revised definition of harassment.
  4. Update anti-discrimination policies to account for marital status protected classification.
  5. Have appropriate personnel trained on disability accommodation requirements.
  6. Review applicable nondisclosure agreements with legal counsel.
  7. Implement or review policies and procedures for state-required paid sick leave to account for additional qualifying reasons.
  8. Review and revise job postings and job descriptions pursuant to updated pay transparency requirements.
  9. Have appropriate personnel trained on updated pay transparency requirements.
  10. Review and update application and recruiting practices to comply with restrictions under JAFA.
  11. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase