2025 Colorado Legislative Update
The 2025 Colorado legislative session brought several new laws impacting the construction industry and employers statewide. Below is a summary of the most relevant legislation to help you stay compliant and informed. Of particular importance are HB25-1001 concerning wage and hour violations and HB25-1272 regarding multifamily housing construction defects.
HB25-1001: Wage & Hour Enforcement
Effective date: August 6, 2025
What it does: Strengthens wage theft enforcement by expanding and increasing penalties.
Impacts:
Prohibits payroll deductions that drop a worker’s pay below the applicable minimum wage.
Creates potential liability for owners with 25%+ control for wage violations.
Imposes steep fines ranging from $5,000 to $50,000 for misclassifying workers as independent contractors.
Applies a presumption of guilt for employers who retaliate within 90 days of a wage complaint.
Enhances anti-retaliation protections, including intimidation regarding immigration status or workers who raise wage concerns in good faith.
Allows violators to be publicly listed on “bad actor” lists and reported to licensing agencies.
Higher burden for employers to recover fees and costs for successfully defending against a wage complaint.
HB25-1077: Backflow Prevention Workforce Fix
Effective date: July 1, 2025
What it does: Exempts certain professionals engaged in inspecting, testing, or repairing backflow prevention devices from licensure requirements.
Impacts:
Aimed at preventing disruption to irrigation and landscaping projects.
Ensures qualified workers can continue performing essential water safety tasks.
New tagging requirements for licensed plumbers and certified cross-connection control technicians who test or perform work on backflow prevention devices.
HB25-1113: Turf Restrictions in New Housing
Effective date: August 6, 2025
What it does: Limits use of turf in certain new apartment and condo developments beginning in 2026 and requires local governments to regulate the installation of turf for new development and redevelopment projects.
Impacts:
Increased regulation and project costs.
May affect design and installation timelines for landscape contractors.
HB25-1130: Government Construction Project Labor Requirements
Effective date: July 1, 2027
What it does: Authorizes state government agencies to incorporate a prehire collective bargaining agreement or project labor agreement (PLA) requirement for public projects of $1 million or more if the PLA promotes successful project delivery through securing a skilled labor force, cost-efficiency, safety, quality, and timely completion of the project.
Impacts:
Expands the availability of existing PLAs for energy-sector public works projects to all public projects as an alternative to apprenticeship and prevailing wage requirements.
May result in increased general contractor challenges.
Increases cost, compliance burden, and legal exposure.
Counties can opt in to the state apprenticeship utilization and prevailing wage requirements for their projects and share administration and enforcement responsibilities with the state.
HB25-1272: Construction Defects & Middle Market Housing (“Colorado American Dream Act”)
Effective date: August 6, 2025; Multifamily construction incentive program begins January 1, 2026
What it does: Creates a voluntary incentive program and updates multifamily rules for defect claims to encourage middle-market (i.e., condos and townhomes) housing development.
Impacts:
Aimed at reducing legal risk for defect claims through third-party inspections during construction and minimum warranties at no cost to homeowners.
Claims against program participants are limited to defects resulting in actual damage to or loss of use of real or personal property; actual bodily injury or wrongful death; unreasonable reduction in the capability of, or an actual failure of, a building component to perform an intended function or purpose; and unreasonable risk of bodily injury or death or threat to the life, health, or safety of the occupants of the property.
Construction professionals must offer to settle claims or provide a thorough written response.
Certificates of review must be filed with complaints against architects or engineers.
Sixty-five percent (65%) owners’ association approval required to initiate a construction defect claim on behalf of the owners (increased from simple majority).
Mixed reactions from the industry—some uncertainty remains.
HB25-1284: Apprenticeship Program Requirements
Effective date: January 1, 2027
What it does: Requires electrical and plumbing apprentices to be enrolled in federally recognized programs.
Impacts:
Electrical and plumbing employers must verify program enrollment before registering apprentices.
Non-compliant employers will receive 30-day notice to cure.
May result in increased compliance/regulation costs.
HB25-1300: Workers’ Compensation Physician Choice
Effective date: January 1, 2028
What it does: Expands injured workers’ ability to choose their treating physician and requires use of established utilization standards when responding to a request for authorization of care.
Impacts:
Employers will be required to notify injured workers of their right to choose any level I or level II accredited treating physician (more than 1,100 state-wide) within 7 calendar days of an on-the-job injury.
Employers can still propose their preferred physicians.
Workers can switch physicians at any time and potentially delay their return to work without justification.
Will likely increase administrative responsibilities and costs, especially for small businesses.
Aimed at moving Pinnacol Assurance toward privatization.
HB25-1312: Worker Protections Against Deadnaming/Misgendering
Effective date: May 16, 2025
What it does: Expands protections for workers who are transgender under the Colorado Anti-Discrimination Act.
Impacts:
Prohibits deadnaming and misgendering as a form of gender expression discrimination.
Requires employers to use an individual’s chosen name so long as the name does not contain offensive language and is not requested for frivolous purposes.
Reiterates the need for careful scrutiny of employment actions such as discipline and separation.
SB25-144: Expanded Paid Family & Medical Lease (FAMLI)
Effective date: January 1, 2026
What it does: Allows an additional 12 weeks of paid leave for eligible parents of infants in a neonatal intensive care unit (NICU) and decreases FAMLI premiums from 0.9% to 0.88% beginning in 2026.
Impacts:
Some workers will be eligible for paid family and medical leave benefits for up to 28 weeks.
Stresses the need for a flexible coverage strategy to mitigate uncertainty associated with a worker’s potential need for leave.
Below are two additional proposed laws worth noting; these did not pass this session but may return next year:
HB25-1286: Worker Protection from Extreme Temperatures (Postponed)
What it would’ve done: Proposed temperature safety requirements for outdoor workers including temperature mitigation, rest breaks, and monitoring, prevention, and emergency response plans.
Impacts:
Strongly opposed by construction and agriculture groups.
Will increase administrative and compliance costs.
HB25-1212: Artificial Intelligence (AI) Protections for Public Safety (Failed)
What it would’ve done: Expand whistleblower and anti-retaliation protections for workers who report AI concerns they reasonably believe may pose a risk to public safety or violate law.
Impacts:
Could discourage further AI investment in Colorado by increasing litigation risk.
Would mandate damages of at least $10,000 to aggrieved workers and potential punitive damages who are retaliated against for raising AI concerns.
SB25-318 would delay enforcement of the Colorado Artificial Intelligence Act (SB24-205) from February 1, 2026 to January 1, 2027 to give employers more time to prepare.
Would increase compliance burdens, including additional notice requirements, creation of anonymous internal reporting systems, and updates on whistleblower investigations.
SB25-185: Claims Against Construction Professionals (Failed)
What it would’ve done: Allowed more homeowners to sue contractors and design professionals for negligence.
Impacts:
Would extend an independent tort duty of care to original residential home purchasers, overturning the 2023 Colorado Court of Appeals holding in Appleby v. Dossey Sudik Structural Engineers LLC limiting such claims to subsequent purchasers only.
Would prevent construction professionals from raising the economic loss rule as a defense to original homeowner tort claims.
Industry advocacy helped block increased legal exposure.
SB25-318: Amendments to Colorado Artificial Intelligence Act (SB24-205) (Failed)
What it would’ve done: Soften the 2024 Colorado Artificial Intelligence Act’s impact on certain business and employers using AI in hiring. The Colorado Artificial Intelligence Act regulates high-risk AI systems that significantly influence decisions in areas including employment by preventing algorithmic discrimination and ensuring transparency and accountability.
Impacts:
Would delay enforcement of the Colorado Artificial Intelligence Act from February 1, 2026 to January 1, 2027 to give employers more time to prepare.
Would implement a narrower definition of “high-risk” AI systems and increase small business exemptions from disclosure and documentation requirements.
Would reduce consumer appeal rights, requiring AI to be the principal basis of a decision before triggering contest rights.
Would exempt employers using AI solely for recruiting external candidates under certain conditions.
Could reduce compliance costs for small to mid-sized companies by lowering litigation risk.
As a result of the bill’s failure, employers should prepare for full compliance by early 2026.
If you have questions about how these laws may affect your business or need help updating your policies and procedures to minimize risk and ensure compliance, please contact us today for support.