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Author: ADP Admin/Tuesday, July 1, 2025/Categories: Compliance Corner
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.
House Bill 25-1001 amends the state’s wage and hour laws as follows.
State law prohibits an employer from making a payroll deduction that would reduce a non-exempt employee’s pay below the federal minimum wage.
State law prohibits an employer from making a payroll deduction that would reduce a non-exempt employee’s pay below the applicable minimum wage.
Existing Law
Effective Aug. 6, 2025
Employers are prohibited from taking adverse action against an employee for:
Employers are prohibited from taking adverse action against an employee orworkerfor:
No relevant provision on timing of adverse action
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.
No relevant provision on immigration status
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.
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).