New strategy to crack down on wage theft in Colorado has a broader scope — and criticism has softened

Colorado lawmakers are again trying to crack down on employers who don’t pay their workers — and this time, the effort comes with a less-combative footing than last year’s vetoed attempt.

House Bill 1001, the first measure to come out of that chamber in this year’s legislative session, arose from Gov. Jared Polis’ veto of a bill aimed at wage theft in the construction industry. Instead of narrowing its scope — the typical strategy for resurrected bills — House Majority Leader Monica Duran and Rep. Meg Froelich, the sponsors, widened it.

The new measure would increase the threshold for wage-theft claims that the Colorado Department of Labor and Employment could enforce across all industries, diverting cases away from more expensive lawsuits. It would also add employees to the department and set up a system to publish the names of violators. The measure would create specific protections against discrimination based on immigration status and against misclassifying employees as contractors.

“It looks a lot different than last year. It’s not just focused on construction — it’s all industries across the board,” said Duran, a Wheat Ridge Democrat, during a recent news conference. She added, “I’m really proud that, at the end of the day, even with all the changes we made and compromises, we are still elevating workers and making sure they have the protections they need.”

Wage theft costs Colorado workers nearly $728 million a year, according to a 2022 study by the Colorado Fiscal Institute. It affects nearly 440,000 low-wage workers every year, and Latino workers and women were most likely to have their wages shorted or withheld, it found.

The bill has passed its first two committees on party-line votes in the heavily Democratic House. It’s waiting for a hearing at the House Appropriations Committee — where its potential $1.3 million price tag, during a catastrophic budget year, could prove a substantial hurdle.

But as the bill awaits that fateful hearing, the changes from last year have smoothed the criticisms that ultimately proved fatal.

Last year’s anti-wage theft bill hinged on holding general contractors accountable for wage-theft allegations made against their subcontractors. Backers argued it was the best way to force companies to take wage theft seriously, while opponents — including Polis — argued it would pass the buck to otherwise good actors.

In his veto letter, Polis called wage theft “a deplorable crime” — but said that the 2024 bill “would let subcontractors who fail to pay their workers off the hook … and penalize good actors who pay all their workers on time.”

Duran and other sponsors worked with Polis’ team and others involved in the issue over the summer, they said. That outreach led to Polis including the measure in his budget proposal and making a pledge he’d sign the bill so “those who steal wages from workers are rightfully held responsible.”

“The Governor thanks the sponsors for addressing the concerns he expressed in his veto letter,” Polis spokesperson Eric Maruyama wrote in a statement. He also cited that the new bill does not include “the problematic aspects such as chain liability for subcontractors.”

The Associated General Contractors of Colorado, a trade group, was one of the primary opponents of last year’s bill, since it targeted the industry. Michael Gifford, its advocacy director, said the contractors received about 90% of the changes they wanted and were working on that last bit. The association is still officially in an “amend” position on the bill — far from last year’s outright opposition.

“(This year’s bill is) not aiming at construction,” Gifford said. “It’s taking all industries and really aiming at the system at CDLE and taking it up another notch. In the big picture, that’s good. That’s what we asked for. We said (that) if you think there’s more work to do on wage theft, do it across the board.”

The bill’s wider net drew praise from the Colorado Center on Law and Policy, an anti-poverty advocacy group. It supported last year’s bill, too, but wage theft happens in more than just the construction industry, said Chris Nelson, a policy analyst for the organization. Accommodations, food services and retail businesses account for more than 40% of wage theft cases, according to the CFI report.

Nelson also called out a public accountability angle. Public sentiment seems to be shifting in workers’ favor, and identifying those who commit wage theft could be a powerful tool for businesses that don’t want to alienate customers.

“Obviously, for a business, you don’t want to face these fines,” Nelson said, noting that repeated violations would mean higher fines. “But I think with the public accountability piece, (the legislation) meets the public where the public is.”

The Colorado Competitive Council, a business advocacy organization, remains opposed to the effort. Rachel Beck, its executive director, emphasized the group’s opposition to wage theft — seeing it as morally wrong as well as bad for overall business — but also worried about this proposal snaring responsible businesses that slip up.

Even so, a lot of legislation that tackles employee-employer relations can feel adversarial, she said. This effort “doesn’t really feel like that,” she said, adding that the sponsors’ outreach “has set a high bar” for negotiations on future bills.

Beck highlighted some aspects of the bill that the group even supports: giving the labor department more authority to enforce claims, transparency for violators and incentives for businesses to settle issues promptly.

The group’s opposition rests on concerns about incentives for lawsuits and presumptions about retaliation. Still, Beck said, ongoing negotiations could lead her group to neutrality.

“The devil is always in the detail about these bills,” Beck said. “Our goal is always to make sure it’s narrowly focused on the bad actors.”

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