Colorado’s 2024 Legislative Session Leads to Big Changes for Colorado Employers

At a Glance

• HB24-1360: Colorado Disability Opportunity Office — Effective July 1, 2024
• HB24-1129: Protections for Delivery Network Company (DNC) Drivers — Effective August 7, 2024
• HB24-1220: Workers’ Compensation Disability Benefits — Effective August 7, 2024
• HB24-1324: Attorney General Enforcement of Void Restrictive Employment Agreements — Effective August 7, 2024
• HB24-1124: Discrimination in Places of Public Accommodation — Effective August 7, 2024
• HB24-1451: Hair Length Added to the CROWN Act — Effective August 7, 2024
• HB24-1095: Increasing Protections for Minor Workers — Effective January 1, 2025
• HB24-1342: Test Accommodations for Persons With Disabilities — January 1, 2025
• HB24-1130: Privacy of Biometric Identifiers & Data — Effective July 1, 2025
• SB24-205: Consumer Protections for Artificial Intelligence — Effective February 1, 2026

Colorado’s 2024 legislative session saw the passage of numerous laws that bolster employee protections and increase penalties for employers that violate key Colorado employment statutes. These recent updates continue the Colorado legislature’s trend of increasing employee protections year after year.

Many of these new laws will go into effect on August 7, 2024, while others are set to go into effect in 2025. Colorado employers should analyze their employment policies, agreements and other relevant documents to ensure they are prepared for compliance with these new laws. 

Below is a summary of the most notable changes for private-sector employers in Colorado.

Changes Already in Effect 

HB24-1360: Colorado Disability Opportunity Office — Effective July 1, 2024

HB24-1360 created the Colorado Disability Opportunity Office (CDOO) within the Colorado Department of Labor and Employment (CDLE). The CDOO is primarily required to serve as a resource to the public concerning disability issues. The CDOO is also tasked with ensuring that goals of full societal inclusion for disabled individuals are met through cross-agency efforts and with submitting recommendations to the governor and state agencies. With the creation of the CDOO, Colorado employers can expect more emphasis in future years from the CDLE on workplace issues related to equitable opportunities for individuals with disabilities and additional antidiscrimination measures. 

In addition, Colorado employers should also note the Job Application Fairness Act’s requirements went into effect on July 1, 2024. Additional information can be found in our previous alert here. 

Changes Effective August 2024

HB24-1129: Protections for Delivery Network Company (DNC) Drivers — Effective August 7, 2024 

HB24-1129 increases protections for DNC drivers by mandating disclosures to drivers and consumers, imposing enhanced requirements on driver contracting, and opening DNCs up to penalties and liability for violations of the act. An entity that sells or delivers goods or services in Colorado and dispatches its drivers through a digital platform will be considered a DNC. In other words, an employer that uses an app to send drivers to pick up and deliver groceries or take-out dinners based on the app user’s request is considered a DNC. While HB24-1129 becomes effective August 7, 2024, many of the onerous tasks for DNCs are not effective until January 2025. Several important requirements of HB24-1129 are discussed in greater detail below. 

1. Disclosure Regarding Payment: By January 1, 2025, HB24-1129 will require DNCs to disclose to their drivers and consumers the amount the consumer has paid and the amount that the DNC then pays to its driver respectively. The DNC is prohibited from decreasing the amount a driver is paid for a delivery based on the amount of a consumer’s tip, and the DNC is required to pay the driver all tips paid by the consumer. 
2. Contract Transparency: By January 1, 2025, the DNC is required to offer a driver a contract — and any subsequent changes to that contract — both on the digital platform and by email. Terms of the contract must be disclosed in plain language and the contract must be available in English, Spanish and Arabic. In addition, the DNC must post the contract for the public to review 14 days before the changes become enforceable. 
3. Account Deactivation Transparency: By January 1, 2025, the DNC must create and disclose specific details regarding their deactivation policy and any subsequent revisions to that policy. The DNC must provide written notice to drivers when there is an account deactivation and disclose certain information in the notice. The DNC must also create an internal account-deactivation challenge procedure to provide drivers a way to challenge their deactivation and seek reinstatement. 
4. Penalties, Fines and Enforcement: HB24-1129 provides relief to consumers and drivers when a DNC violates the act as well as other enforcement mechanisms for DNCs that are not in compliance. These mechanisms include fines imposed by the director of $100 on a per-consumer or per-driver basis. The law includes a private right of action, and a DNC may be subject to $1,000 in statutory damages on a per-consumer or per-driver basis as well as actual damages if a violation is found in court. Injunctive relief is also specifically provided under HB24-1129. 

HB24-1220: Workers’ Compensation Disability Benefits — Effective August 7, 2024

HB24-1220 provides workers’ comp claimants additional rights and increases limitations on the amount of money a claimant may claim. Some of these additional rights include: (1) a workers’ comp claimant can refuse an offer of modified employment if the employment requires the claimant to drive to and from work, and a treating physician has restricted the claimant from driving; (2) a claimant may elect direct deposit of temporary disability benefits; and (3) a claimant may claim whole-person permanent impairment benefits for the loss of an ear. In addition, HB24-1220 allows claimants to claim a larger amount of money based on their impairment rating:

• For an impairment rating of 19% or less, from $75,000 to $185,000
• For an impairment rating greater than 19%, from $150,000 to $300,000

HB24-1324: Attorney General Enforcement of Void Restrictive Employment Agreements — Effective August 7, 2024 

HB24-1324 primarily serves to grant the attorney general enforcement authority over already regulated noncompete agreements. Notably, if the attorney general is successful in recovering damages or other injunctive relief related to a violation of the Colorado noncompete law, the harmed worker cannot also recover from the employer. 

As Colorado employers know, one type of noncompete agreement permitted under Colorado law is an agreement to recover the expenses related to certain worker trainings. Effective August 7, 2024, the attorney general may also establish additional criteria for when employers can enter into an agreement to recover training expenses. In addition, and related to the point above, once HB24-1324 becomes effective, if the attorney general brings an action to enforce Colorado’s noncompete law related to agreements for training expenses, the attorney general may recover three times the amount of any recovery or attempted recovery by a worker.

HB24-1124: Discrimination in Places of Public Accommodation — Effective August 7, 2024

HB24-1124 revises the Colorado Anti-Discrimination Act (CADA) by increasing penalties for violations of sections related to discrimination in places of public accommodation from a maximum of $500 to a $3,500 penalty for each violation. 

HB24-1451: Hair Length Added to the CROWN Act — Effective August 7, 2024

The CROWN Act prohibits discrimination on the basis of one’s race, including discrimination on the basis of traits commonly or historically associated with race. This includes traits such as hair texture and hair type. Effective August 7, 2024, hair length will be considered a trait associated with one’s race. 

Changes Coming in 2025 & Beyond

HB24-1095: Increasing Protections for Minor Workers — Effective January 1, 2025

HB24-1095 substantially increases penalties for violations of the Colorado Youth Employment Opportunity Act of 1971 and requires penalties to be deposited into the wage theft enforcement fund. This is separate from the penalties that may be owed to an individual that is aggrieved. 

HB24-1095 creates a safe harbor for employers if they were intentionally misled by the minor worker and engaged a reliable third-party to verify the age of the minor worker. Final orders issued for violations will be treated as public records and made accessible to the public upon request. Individuals attempting to exercise their rights under the act will be protected by the state’s discrimination and retaliation prohibitions. Relatedly, HB24-1095 creates a rebuttable presumption of retaliatory action if an employer engages in adverse action against an aggrieved individual within 90 days after the individual engaged in protected activity. 

HB24-1342: Test Accommodations for Persons With Disabilities — January 1, 2025

HB24-1342 provides additional rights to Coloradans with disabilities in the context of professional licensing and trade certification exams. The bill requires testing entities to grant requests for testing accommodations without a diagnostic exam or psychological assessment if the individual is requesting an accommodation they have received previously on a standardized test. Individuals that are aggrieved by a testing entity’s decision may bring a civil action. The attorney general is also tasked with investigating violations and is permitted to bring a civil action for alleged violations.

HB24-1130: Privacy of Biometric Identifiers & Data — Effective July 1, 2025

HB24-1130 amends the Colorado Privacy Act to add protections for individuals’ biometric data by requiring the controller of biometric data to comply with additional regulations. It also provides regulations related to employers that want to use biometric data. 

Under HB24-1130, employers may require employees (or future employees) as a condition of employment to allow the employer to collect biometric data (i.e., a fingerprint, a voiceprint, an iris scan, a face map, or other unique biological, physical, or behavioral patterns or characteristics), but only for limited purposes. These purposes include: (1) to permit access to secure areas and electronic hardware or software; (2) to record the commencement and conclusion of an employee’s workday as well as break times; (3) to improve and monitor safety or security of employees; or (4) to improve monitoring of the public in the event of an emergency or crisis situation. Employers may not track the location of employees. 

Employers that would like to use biometric data for a purpose other than those described above must first obtain employee consent. An employer cannot make employment contingent on that consent or otherwise retaliate against an employee for not providing consent. 

Employers are also able to collect and process prospective-employee and employee biometric data for uses aligned with an employee’s job description or a reasonable background check. 

Entities that are obtaining and maintaining biometric data must take certain measures, including the amended measures effective July 1, 2025, to protect this data. For example, effective July 1, 2025, the controller must adopt a written policy that:

• Establishes a retention schedule for biometric data
• Includes protocols for responding to data security breaches
• Includes guidelines that require deletion of data on or before a certain date

HB24-1130 further requires controllers to satisfy disclosure and consent requirements before collecting biometric data including:

• Disclosing use of a consumer’s biometric identifier
• Limiting permissible reasons for obtaining employee consent for collection of biometric identifiers

SB24-205: Consumer Protections for Artificial Intelligence — Effective February 1, 2026

A first-in-the-nation law, SB24-205 requires developers and deployers (i.e., employers using AI) of high-risk artificial intelligence systems (i.e., AI systems that, when deployed, make or are a substantial factor in making a consequential decision) to use reasonable care to protect consumers (i.e., a Colorado employee) from any known or foreseeable risks of algorithmic discrimination. 

Algorithmic discrimination occurs when automated systems contribute to unjustified disparate treatment of individuals based on their race, sex, ethnicity or other classification protected by law. There is a rebuttable presumption that a developer or deployer of an AI system used reasonable care if they complied with the specific provisions of the act. These requirements as they relate to deployers are discussed further below.

Under SB24-205, deployers that use AI, among many requirements, must: 

1. Implement a risk management policy and program for the AI system. The risk management policy and program must be systematically reviewed and updated over the life cycle of the AI system.
2. Complete an impact assessment of the AI system
3. Review the deployment annually to ensure the AI system is not causing algorithmic discrimination
4. Notify the consumer if the AI system makes, or will be a substantial factor in making, a consequential decision concerning the consumer
5. Provide the consumer an opportunity to appeal an adverse consequential decision arising from the deployment of an AI system
6. Make a publicly available statement summarizing the types of AI systems the deployer currently deploys and how they manage known and foreseeable risks of algorithmic discrimination
7. Disclose to the attorney general the discovery of algorithmic discrimination within 90 days after the discovery

Any individual doing business in the state that deploys and makes available an AI system must ensure that they disclose to each consumer who interacts with the system that they are interacting with an AI system. SB24-205 also provides an affirmative defense to potential violators if they are in compliance with a nationally or internationally recognized risk management framework for AI systems. Finally, individuals in industries such as insurance and banking will be in full compliance if they are subject to and abide by specific laws governing their respective industries. 

Conclusion

Employers should note the effective date of these changes, review employment policies and template agreements, and contact an employment attorney with any questions related to compliance. 

Summer associate Tristan T. Verghese contributed to this update.