As the books close on another year, employers face a landscape rife with potential change. A new administration could mean major shifts in regulation at the federal level, and locally the Colorado General Assembly will have to reckon with a significant budget gap and a large drop in the state’s economic growth, according to the business research division at the University of Colorado’s Leeds School of Business in Boulder, Colorado.
While those exact changes can’t be predicted, Law Week talked with David Gartenberg, the office managing shareholder for Littler in Denver, about changes in employment law that have taken effect, or will soon take effect in Colorado.
Adjusting to New Leave Requirements
Gartenberg noted that one of the biggest changes for employers has been the introduction of Colorado’s Family and Medical Leave Insurance program, or FAMLI.
The program had a long lead-in. A bill to implement the program died in Colorado’s Senate in 2018 after clearing the House of Representatives. But the issue was revived in 2020 as a state ballot initiative, and it passed with 57% of Colorado voters in favor.
Even though it passed in 2020, 2024 was the first year the program was active, allowing Colorado workers to take up to 12 weeks of state-paid leave for medical issues, the birth of a child or other qualifying circumstances.
Gartenberg noted that the inaugural year of the program has involved a lot of learning for both employers and employees on what the law requires, what it doesn’t require and how to manage it.
The law is more novel for some employers than others. Gartenberg compared the state law to the federal family and medical leave law, which larger employers have been working with for many years. But the state law is different — it covers all employers.
“If you’re a small employer, you might just not be familiar, generally, with this 12 weeks of leave that employees are entitled to, this could be a new concept for you,” Gartenberg said. “It also is probably a little more burdensome on smaller employers, because if you only have three employees and somebody is going to be out for 12 weeks, you might absolutely want to support them, but that is very burdensome.”
But he noted that there was a big difference between the state and national law, and one that affected all employers in the state.
“Under the federal program, employees can only take it if they’ve been employed for at least 12 months,” Gartenberg said. “For the state program, there is no waiting period. So even some larger employers have it in their muscle memory, ‘This isn’t something we need to think about, this 12 weeks of leave, until somebody’s been here for a year.’ That’s not the case for the state program — that increased eligibility.”
Another novel issue companies and employees are encountering is how the state leave program interacts with the other benefits an employee might have.
“For example, an employer may say, ‘My employees all get eight weeks of fully paid parental leave.’ The family program also provides for parental leave up to 12 weeks, but it’s not fully paid. And how those two programs interact with one another can create a lot of uncertainty, both at the agency level and just in terms of how to implement these two programs,” Gartenberg said.
Clarity on some of the intricacies of the law and how it applies may be coming soon. Gartenberg noted that the law requires parties to exhaust administrative remedies before going to court, and as a result, there haven’t been many cases that have even made it to the trial courts yet.
“But I think this might be the year that we start getting some decisions from the trial courts, and maybe even into the courts of appeal on how to interpret this,” Gartenberg said. “Because it really is a challenging law to comply with.”
Changes to Data Security Protections
Another area with shifting requirements for employers is data security. Colorado was one of the first states in the nation to adopt a comprehensive data privacy bill with the Colorado Privacy Act. The CPA went into effect nearly two years ago, but it is now being joined by a first-in-the-nation bill regulating biometric data.
While the biometric data law is more focused on consumer protection, Gartenberg said that there are some requirements for employers.
“Employers will be required, at minimum, to get consent before collecting and using any sort of biometric information from any of their prospective or current employees, and they also need to adopt a policy regarding biometric information,” Gartenberg said.
The new law is split up into two separate sets of restrictions, one on biometric identifiers and the other on biometric data. Gartenberg noted that the employee consent requirement applied just to biometric identifiers, but the policy requirement applied to both.
What constitutes a biometric identifier is broad, and Gartenberg said it covers any data that’s generated by technological processing, measurement or analysis of an employee’s biological, physical or behavioral characteristics. He noted that this could include anything from a personality test to fingerprints or voice prints.
While the law institutes new requirements, it hasn’t done so quite yet. The law goes into effect on July 1, 2025. According to the bill text, once the law is in effect, it “applies to the collection, retention, processing, and use of biometric identifiers and biometric data on and after the applicable effective date of this act.”
The Non-Clauses
Earlier this year, the Federal Trade Commission caught many by surprise when it announced that it was banning noncompete clauses. While that law is now enjoined, Colorado has a number of recent laws on the books impacting the legality of noncompetes, nonsolicitation agreements and nondisclosure agreements in the state.
Gartenberg said that some of the newer restrictions include a salary threshold for employees to allow them to be subject to a noncompetition provision and another, lower threshold for it to be legal for an employee to be subject to a customer nonsolicitation agreement.
“Lower wage earners, basically, there’s no way that they can be subject to those restrictive covenants,” Gartenberg said. “There’s also additional requirements to make these agreements enforceable. One, there needs to be a separate notice from the agreement itself. So you need to have the agreement, and then you have to have a separate notice telling somebody in plain language, by the way, ‘We are going to require you to be bound by this nonsolicitation or noncompetition agreement.’”
Outside of competitive agreements, another big change took effect recently with certain nondisclosure agreements as a result of Colorado’s Protecting Opportunities And Workers’ Rights, or POWR, Act going into effect.
The law addresses discriminatory and unfair employment practices, and includes a section on what nondisclosure provisions require to both remain legal and be enforceable.
In addition to a baseline level of requirements, Gartenberg noted that there could be a fine of $5,000 levied if a nondisclosure agreement is in violation of the law.
“For it to be lawful, it needs to apply equally to all parties of the agreement, it needs to have some carve-outs for who can disclose certain underlying facts about an alleged discriminatory or unfair employment practice, and it needs to expressly say that in the agreement itself, it needs to have some modifications or restrictions on a nondisparagement clause,” Gartenberg said. “One of the odder pieces of it is it needs to have an addendum to the agreement that attests to compliance with this law. So you can sign the agreement, and then you need to have a second page, an addendum, saying, ‘This agreement complies with the POWR Act.’”
He said that employers should make sure to be aware of this law because if they’re out of compliance, they might be receiving a demand.