Denver, Colo. (June 22, 2023) – The Colorado legislature concluded the 2023 Legislative Session on May 8, 2023. As in prior years, the legislature passed several new employment-related bills that significantly expand employee protections and increase compliance burdens on Colorado employers. Governor Jared Polis recently signed many of these bills into law, so the compliance clock is now running.

The new legal changes are sweeping in scope, touching upon virtually all aspects of the employee life cycle. They will require updates to, or changes in the administration of, job postings, employment applications, employee notices and handbooks, harassment prevention programs, record-keeping requirements, paid sick leave administration, and confidentiality, severance, and settlement agreements.

To help employers understand and prepare for these wide-ranging changes, our Employment Advice and Counseling practice group has developed a 4-part client alert series. Part I provides a high-level summary of the new requirements applicable to private employers, as well as developments and upcoming compliance deadlines for the Colorado Family and Medical Leave Insurance Program. Parts II-IV of this client alert series will provide a more detailed analysis of the each of new laws as well as recommended compliance strategies.

Protecting Opportunities and Workers' Rights Act ("POWR")(SB 23-172) –
Effective August 7, 2023

The POWR Act enacts numerous changes to the Colorado Anti-Discrimination Act (CADA), imposes new restrictions on non-disclosure provisions in employment agreements, and imposes significant new recordkeeping requirements. These changes become effective August 7, 2023 and will not be retroactive. Employers should use the limited time before the August 7th effective date to evaluate and revise their current practices, policies, and agreements to address the many changes. Of note, the POWR Act:

  • Eliminates the "severe and pervasive" legal standard in order to establish a discriminatory or unfair employment practice under CADA. Instead, the conduct only needs to be unwelcome and subjectively and objectively offensive;
  • Eliminates the availability of an affirmative defense when a supervisor engages in unlawful harassment unless the employer has a program that is reasonably designed to prevent, deter, and protect employees from, unlawful harassment;
  • Modifies the disability discrimination analysis by focusing on whether an accommodation would allow the individual to satisfy the essential functions of the job rather than whether the disability has a "significant impact on the job;"
  • Adds marital status as a protected class under CADA, subject to certain conflict of interest exceptions;
  • Voids non-disclosure or confidentiality provisions in employment agreements that limit the ability of an employee or prospective employee from disclosing, discussing, either orally or in writing, any alleged discriminatory or unfair employment practice unless very specific notice, carve-out, and other provisions are included in the agreement and an addendum signed by all parties. In addition to significant penalties for merely presenting an employee or prospective employee with a non-compliant agreement ($5,000 per violation), the POWR Act also establishes a private right of action where an employee or prospective employee may recover actual damages, reasonable costs, and attorneys' fees. Evidence an employer entered into one or more non-compliant agreements with other employees also can be used to support an award of punitive damages;
  • Mandates the creation of a designated repository where employers must keep specific records related to written or oral complaints of discriminatory or unfair employment practices, including "the date of the complaint, the identity of the complaining party, if the complaint was made anonymously, the identity of the alleged perpetrator, and the substance of the complaint." These records will be deemed personnel records and must be retained for five (5) years.

Amendments to Colorado's Healthy Families Workplaces Act (SB 23-017) –
Effective August 7, 2023

In addition to the existing permitted uses for paid sick leave, Colorado employees will now be able to take accrued or available paid sick leave for absences related to: (i) the need to grieve, attend funeral services or a memorial, or deal with financial and legal matters that arise after the death of a family member; (ii) to care for a family member whose school or place of care has been closed for inclement weather, loss of power, heat, water, or other unexpected occurrences or events; or (iii) evacuation of the employee's personal residence due to inclement weather, loss of power, heat, water, or other unexpected occurrences or events. These additional qualifying reasons for paid sick leave become effective August 7, 2023. Employers will need to update their existing paid sick leave policies to ensure that the new qualifying reasons for leave are included.

Equal Pay for Equal Work Act Amendments (SB 23-105) – Effective January 1, 2024

In a welcome move for employers, the Colorado legislature enacted amendments to the Equal Pay for Equal Work Act to clarify some of the requirements related to job postings. Once the amendments become effective on January 1, 2024, employers will no longer be required to advertise notice of "career development" and "career progression" opportunities which do not involve a job vacancy. Additionally, through July 1, 2029, employers located outside of Colorado who have fewer than fifteen (15) employees working remotely in Colorado only need to provide the Colorado remote workers with notice of remote work job opportunities.

The recently enacted amendments to the Equal Pay for Equal Work Act do, however, impose additional obligations, including: (i) adding a requirement to include the anticipated application close date in job postings; (ii) providing certain information about a candidate selected to fill a job opportunity to other employees with whom they will work regularly; and (iii) extending the time period an employee can receive back pay on wage discrimination claims from three (3) to six (6) years. The Colorado Department of Labor (CDLE) is required to issue new rules implementing these amendments, including creation of a process to accept, investigate, and mediate complaints.

Job Application Fairness Act (SB 23-058) – Effective July 1, 2024

The Job Application Fairness Act prohibits Colorado employers from requesting or requiring a job applicant to disclose their age, date of birth, or dates of attendance at or graduation from educational institutions on an initial job application. Certain exceptions apply for bona fide occupational qualifications related to public or occupational safety or compliance with federal, state, or local laws or regulations. Although a violation does not create a private cause of action, aggrieved individuals may file a complaint with the CDLE, which is authorized to investigate and issue non-compliance warnings or penalties. The new requirements do not take effect until July 1, 2024, so employers should use this time to revise their employment applications and applicant interview protocols to address these new requirements.

Other Developments and Upcoming Compliance Deadlines

Colorado Family and Medical Leave Insurance Program (FAMLI) Updates

The Colorado Family and Medical Leave Insurance Program (FAMLI) program provides eligible employees with up to twelve (12) weeks of paid leave to care for themselves or a covered family member with a serious health condition; to care for a new child within one (1) year after the child's birth, adoption, or placement; to make arrangements for a family member's military deployment; or to obtain safe housing, care, or legal assistance in response to domestic violence, stalking, sexual assault, or sexual abuse. Individuals with serious health conditions caused by pregnancy complications or childbirth complications are entitled to up to four (4) more weeks of paid family and medical leave per year for a total of 16 weeks. The FAMLI Program is funded by employer and employee premium contributions. Employee payroll deductions began in January of 2023 and leave rights begin January 1, 2024.

  • Employers are required to post and issue the 2023 Program Notice to employees on or after January 1, 2023, register and establish an account with the FAMLI Division, deduct premiums from payroll, and submit wage reports and pay premiums on a quarterly basis. Q2 premiums are due no later than July 31, 2023.
  • On March 23, 2023, Governor Polis signed into law SB 23-046. This law modifies the method of calculation of FAMLI benefits so it is now based on total earnings during the individual's base period or alternative base period, rather than earnings from only the individual's current job at the time of taking leave.
  • The FAMLI Division finalized changes and officially adopted rules on program integrity, coordination of benefits and reimbursement of advanced payments, investigations, determinations and appeals, and job protection, anti-retaliation, and anti-interference rules. These rules become effective July 15, 2023.

Up Next

Part II - IV of this client alert compliance series will provide more in-depth analysis of, and compliance strategies associated with, the POWR Act, amendments to the Colorado Healthy Families and Workplaces Act and the Equal Pay for Equal Work Act, and the Job Application Fairness Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.