Owning 25% or More in a Colorado Company will Subject you to Liability as an Employer for Wage Claims and Colorado sets Rulemaking on Same
Owning 25% or More in a Colorado Company will Subject you to Liability as an Employer for Wage Claims and Colorado sets Rulemaking on Same
Kathryn Bennett, Law Clerk
The Colorado Department of Labor & Employment Division of Labor Standards & Statistics (the “DLSS”) announced a public hearing of proposed rulemaking will occur on November 4, 2025 at 9:00 a.m. (attendance by remote means only) (the “Hearing”) to make rules for new employment laws, including the law allowing liability for wage claims for an individual who owns 25% or more of a company. If you are interested in participating in or testifying at the hearing use this form.
Rulemaking for Colorado Employment Laws
HB 25-1001[1] took effect August 6, 2025 and amended the Colorado Wage Act by changing the definition of “employer” to include any individual that either owns or controls at least 25% ownership interest in an employer, subjecting those individuals to personal liability for the employer’s violation of wage and hour laws. That person could be exempted from liability, however, if they delegate their authority to control the employer’s daily operations. Some business leaders are concerned that HB 25-1001 will have a chilling effect on investors who now must consider the risk of being held personally liable for an employee’s successful wage claim against the business.
The DLSS will also set rules for HB 25-1001, which takes effect July 1, 2026 and increases the amount of wage claims over which the Division has jurisdiction from $7,500.00 to $13,000.00 and prevents a prevailing employer from recovering attorneys’ fees and costs unless the Court finds that the employee’s wage claim lacked substantial justification. To learn more about HB 25-1001, see Campbell Litigation’s prior articles on the bill.[2]
Colorado will also set rules for HB 25-1208,[3] which took effect June 3, 2025 and allows local governments that have enacted a higher minimum wage than the Colorado state minimum wage to enact a tip credit amount higher than the state’s $3.02 tip credit, as long as it does not lower an employee’s earned wages below the state’s $11.79/hour minimum tipped wage (the wage rate employers must pay tipped employees). For example, if the City of Boulder enacts a tip credit pursuant to HB 25-1208, the credit can be at most $4.78/hour (i.e., $16.57/hour (Boulder’s tipped minimum wage) - $4.78/hour (a tip credit higher than the state’s credit) = $11.79/hour (the Colorado state tipped minimum wage)).
Also, the Hearing will address rules to implement SB 25-128,[4] an amendment to the Agricultural Labor Right and Responsibilities Act, which prohibits agricultural employers from interfering with their employees’ service providers as long as the services are provided through “remote channels” (e.g., telehealth appointments).
The DLSS will also hear comments on the new state minimum wage of $15.16/hour that takes effect January 1, 2026[5] and Colorado’s annual increase in the salary threshold for the exemption of executive, administrative, and professional employees from $56,485.00 to $57,784.00.[6]
Employer Takeaways
Anyone interested in testifying about or listening to the proposed rules for any of the above-referenced laws on Tuesday, November 4, 2025, beginning at 9:00 a.m. may do so via this link or by calling in to (U.S.) +1 513-816-0297 and entering this pin: 166 117 572 #. Written comments must be submitted by Thursday, November 6, 2025, at 12:00 p.m.
[1] https://leg.colorado.gov/sites/default/files/2025a_1001_signed.pdf.
[2] Colorado General Assembly Passes Bill Expanding Enforcement of Wage & Hour Laws; Colorado Lawmakers Take Another Shot at Confronting Wage Theft with New Bill
[3] https://leg.colorado.gov/sites/default/files/2025a_1208_signed.pdf.
[4] https://leg.colorado.gov/sites/default/files/2025a_128_signed.pdf.
[5] https://cdle.colorado.gov/sites/cdle/files/proposed_2026_pay_calc_order_7_ccr_1103-14_redline_9.30.25.pdf.
[6] https://cdle.colorado.gov/sites/cdle/files/proposed_2026_pay_calc_order_7_ccr_1103-14_redline_9.30.25.pdf.