Colorado wage theft bill wins support for broader aim after Polis veto

Colorado legislators are making another attempt to address employers who fail to pay their workers, but this time with a more collaborative approach compared to last year’s vetoed effort.

House Bill 1001 is the first bill to emerge from this year’s legislative session and is a response to Governor Jared Polis’ veto of a bill targeting wage theft in the construction industry. Instead of narrowing the focus of the bill, House Majority Leader Monica Duran and Rep. Meg Froelich, the sponsors, have broadened its scope.

The new measure seeks to raise the threshold for wage-theft claims enforceable by the Colorado Department of Labor and Employment across all industries, moving away from costly lawsuits. It also aims to expand the department’s staff and establish a system for publicizing the names of violators. Additionally, the bill includes protections against discrimination based on immigration status and misclassification of employees as contractors.

“It looks very different from last year. It’s not just limited to the construction industry – it covers all sectors,” said Duran, a Democrat from Wheat Ridge, during a recent press conference. She emphasized, “Even with the changes and compromises we made, we are still prioritizing workers and ensuring they have the necessary protections.”

According to a 2022 study by the Colorado Fiscal Institute, wage theft costs Colorado workers nearly $728 million annually, impacting around 440,000 low-wage workers, with Latino workers and women being disproportionately affected.

The bill has passed two committees in the Democratic-controlled House on party-line votes. It is now awaiting a hearing at the House Appropriations Committee, where its estimated cost of $1.3 million could pose a significant challenge during a financially challenging year.

However, the revisions made to the bill since last year have addressed many of the criticisms that led to its rejection.

The previous bill focused on holding general contractors accountable for wage-theft allegations against their subcontractors. Supporters argued that this approach would compel companies to take wage theft seriously, while opponents, including Governor Polis, contended that it would unfairly penalize good actors.

In his veto letter, Polis described wage theft as “deplorable,” but expressed concerns that the 2024 bill would absolve subcontractors who failed to pay their workers and penalize compliant companies.

Duran and other sponsors engaged with Polis’ team and stakeholders over the summer to address these issues. This collaboration led to Polis including the measure in his budget proposal and committing to signing the bill to hold accountable those who engage in wage theft.

“The Governor appreciates the sponsors for addressing the concerns raised in his veto letter,” stated Polis’ spokesperson Eric Maruyama. He also noted that the new bill eliminates problematic elements like chain liability for subcontractors.

The Associated General Contractors of Colorado, a trade association that opposed last year’s bill, has softened its stance this time around. The group received most of the changes they requested and are now working on final adjustments. While still officially in an “amend” position on the bill, they are no longer outright opposing it.

Michael Gifford, the advocacy director for the association, highlighted that this year’s bill is not solely targeting the construction industry but aims to improve the system at CDLE across all sectors. He acknowledged the positive direction of the bill in addressing wage theft comprehensively.

The Colorado Center on Law and Policy, an anti-poverty advocacy group, commended the bill’s expanded scope beyond construction. Chris Nelson, a policy analyst at the organization, emphasized that wage theft is prevalent in various industries such as accommodations, food services, and retail. He also noted the importance of public accountability in deterring wage theft.

The Colorado Competitive Council, a business advocacy organization, remains opposed to the bill. Executive Director Rachel Beck expressed concerns about potentially ensnaring responsible businesses for minor infractions. However, she acknowledged the bill’s positive aspects, such as empowering the labor department to enforce claims and promoting transparency.

Beck highlighted the importance of ensuring that the legislation focuses specifically on addressing bad actors in the business community. She noted that ongoing negotiations could lead to the organization shifting its position from opposition to neutrality.

“The devil is in the details of these bills,” Beck remarked. “Our goal is always to ensure that they target the bad actors specifically.”

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