Colorado Passes Comprehensive Wage Theft Prevention Bill

Colorado Wage Theft Prevention Legislation

Colorado has joined the growing number of states strengthening protections against wage theft through comprehensive new legislation.

Key Changes in HB-1234

Enhanced Penalties

The bill increases penalties for wage theft violations:

• Civil penalties increased from $500 to $2,000 per violation
• Willful violations carry enhanced penalties
• Employers found liable for wage theft must pay liquidated damages
• Attorney’s fees and court costs are recoverable by employees

Extended Statute of Limitations

Employees now have additional time to pursue wage claims:

• Statute of limitations extended to 4 years (previously 2 years)
• Applies to all wage claims including overtime and minimum wage
• Applies retroactively to claims pending on the effective date

Reporting Requirements

New record-keeping and reporting obligations:

• Employers must maintain detailed time and wage records
• Records must be made available to employees
• Department of Labor has enhanced inspection authority
• Violations result in civil penalties

Retaliation Protections

Enhanced protections for workers reporting wage violations:

• Employers cannot retaliate against employees for reporting violations
• Protection extends to complaints to government agencies
• Workers can sue for retaliation damages
• Burden shifts to employer to prove legitimate reasons for adverse action

Background

Wage theft is widespread in Colorado, affecting thousands of workers annually. Investigations show that:

• Misclassification of employees as exempt is common
• Off-the-clock work is frequently required
• Improper deductions reduce worker pay
• Many workers fear reporting violations due to retaliation

Worker Impact

This legislation provides important new protections:

• Extended time to pursue wage claims encourages more workers to come forward
• Enhanced penalties deter employer violations
• Retaliation protections make it safer to report violations
• Increased DOL resources improve enforcement

Employer Response

Employers are required to:

• Review wage and hour practices for compliance
• Update timekeeping systems
• Ensure accurate classification of employees
• Establish clear wage payment policies
• Document compliance efforts

Effective Date

The legislation takes effect July 1, 2026, giving employers six months to achieve compliance.

Relevance to Investigation

Workers investigating potential wage theft in Colorado should be aware:

• They have 4 years to pursue claims (not 2)
• Enhanced remedies are available for violations
• They are protected from retaliation for reporting
• Documentation of time and wages is critical for proving claims
• Legal support is increasingly available as enforcement improves

This represents a significant development in protecting workers from corporate misconduct in Colorado.