Colorado Amends Rules on Deductions, Broadens Retaliation Protections
07/03/25
Author: ADP Admin/Tuesday, July 1, 2025/Categories: Compliance Corner , State Compliance Update, Colorado
Colorado has enacted legislation that amends rules on payroll deductions and expands retaliation protections under the state’s wage and hour and youth employment laws. The law (House Bill 25-1001) takes effect Aug. 6, 2025.
The Details
House Bill 25-1001 amends the state’s wage and hour laws as follows.
Deductions
Existing Law
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Effective Aug. 6, 2025
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State law prohibits an employer from making a payroll deduction that would reduce a non-exempt employee’s pay below the federal minimum wage.
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State law prohibits an employer from making a payroll deduction that would reduce a non-exempt employee’s pay below the applicable minimum wage.
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Retaliation
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Existing Law
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Effective Aug. 6, 2025
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Employers are prohibited from taking adverse action against an employee for:
- Filing a complaint or causing to be instituted a proceeding under any law or rule related to wages, hours, or employment of minors; or
- Testifying or providing other evidence, in a proceeding on behalf of the employee or another person regarding afforded protections under any law or rule related to wages, or hours.
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Employers are prohibited from taking adverse action against an employee orworkerfor:
- Filing a complaint or causing to be instituted a proceeding under any law or rule related to wages, hours, or employment of minors; or
- Testifying or providing other evidence, in a proceeding on behalf of the employee or another person regarding afforded protections under any law or rule related to wages, hours,or employment of minors.
- Raising concernsin good faith about compliance with orproviding information about rightsunder any law or rule related to wages or hours to any person.
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No relevant provision on timing of adverse action
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When determining whether retaliation has occurred under the above provisions, thetime betweenwhen the individual engaged in protected activity and when the employer took adverse action must be considered.
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No relevant provision on immigration status
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Any effort touse an individual'simmigration statusto negatively impact the wage and hour law rights, responsibilities, or proceedings of any employee or workeris an unlawful actof intimidation, threatening, coercion, discrimination, and retaliation.
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Other Changes
House Bill 25-1001 also amends the definition of "employer" for purposes of wage and hour laws to include an individual who owns or controls at least 25 percent of the ownership interest in an employer. It also adds an exemption for a minority owner that delegates day-to-day operational authority to an employer.
The law also establishes new penalties for employers found to have misclassified an employee as an independent contractor (or any other way that affects their compensation).
Next Steps
- Ensure compliance with House Bill 25-1001 by Aug. 6, 2025.
- Train supervisors on the changes.
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