Colorado Legislative Session Marked by Employment Bill Failures

By Brooke A. Colaizzi

On the employment law front, Colorado's 2010 legislative session, which ended May 12, was notable not for the bills that passed, but for the bills that failed.

A House bill that would have changed the remedies available for a violation of the Colorado Anti-Discrimination Act to more closely mirror those available for a violation of federal laws such as Title VII and the Americans with Disabilities Act, failed by one vote in the House.  Had it passed, the bill would have had a significant impact on how employment discrimination claims are pleaded, prosecuted, and defended, particularly for small employers not currently subject to certain federal laws and their damages provisions.  A similar Senate measure failed during the 2009 Legislative session.   

House committees also killed bills that would have required employers to provide paid sick time to employees, eliminated the requirement that employers withhold Colorado income tax from employees' paychecks, disqualified certain convicted felons from employment in schools, and placed restrictions on employers' use of surveillance information against an employee who has filed a worker's compensation claim.  The Senate State, Veterans, and Military Affairs Committee failed to approve a bill that would have required all private employers to participate in the federal E-Verify program for all newly hired employees.

Interestingly, the Senate Finance Committee killed a bill that would have provided an income tax credit to employers who re-hired, in 2010, previously laid off workers.  The bill would have complemented a federal law passed in March that provides tax incentives to employers who hire unemployed workers.  Legislators and community groups had expressed concerns that the bill was too narrow to provide any real incentives to businesses, particularly in light of several business tax exemptions that were discontinued by the Legislature this session.

One of the few bills to pass into law this session sought to encourage employers to hire individuals with criminal convictions.  House Bill 1023 limits the use of evidence of an employee's criminal history in a lawsuit against the employer for harm caused by that employee or for the employer's negligent hiring.  Criminal history will be admissible only if the nature of the criminal history bears a direct relationship to the facts underlying the case.  Criminal records that were sealed, convictions that received a deferred judgment that was not revoked, and records of arrests or charges that did not result in a conviction are not admissible in a lawsuit against an employer.  The law does not eliminate the need for employers to conduct criminal background checks and does not supersede any statutes that require such checks.  Nor does the law eliminate negligent hiring or supervision tort liability for employers.

The Legislature also amended the Colorado Wage Act to allow employers to make payroll deductions for contributions attributable to automatic enrollment in an employee retirement plan and defines limits of an employer's liability for default investment decisions made on behalf of an automatically enrolled employee.

The failure of so many employment-related bills suggests the Legislature's unwillingness to add extra burdens on employers struggling through a difficult economy, a trend that may continue if the economy does not show improvement before the 2011 Legislative session.

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©2010 Sherman & Howard L.L.C.                                                        July 7, 2010