Business owners across the state are reflecting on the legislative session that concluded on May 7, 2025. This year’s session was marked by a blend of progress and challenges, with several bills poised to impact the business landscape. Here is a summary of the bills we were monitoring. These updates are as of May 20, 2025, and are subject to change. The governor has until June 6th to sign into law; if no action is taken, these will become law June 7th. You can click here for a complete listing of the Colorado Legislative Session.  

 Key Business-Related Bills that have Passed  

 Tax Incentives for Employee-Owned Businesses (HB25-1021) 
This bill is an introduction of tax incentives aimed at promoting employee ownership, which offers income tax subtractions for capital gains resulting from converting at least 20% of a business to employee ownership and for worker-owned cooperatives. This initiative is expected to enhance business sustainability and productivity, contributing to long-term economic stability in Colorado.  

 Changes to the Paid Family and Medical Leave Insurance Program(HB25-144)  has passed but has not yet been signed by the Governor. This bill expands paid leave benefits by allowing an additional 12 weeks of leave for parents with a child in a neonatal intensive care unit (NICU), offering crucial support during challenging family medical situations. It also makes adjustments to how the program is funded: the current premium rate of 0.9% of employee wages will be extended through 2025, with a slight decrease to 0.88% set for 2026. Moving forward, the Department of Labor and Employment will be required to set the annual premium rate by November 1 of the preceding year. 

 Enforcement Wage Hour Laws (HB25-1001 ) has passed but is still awaiting the Governor’s signature. This bill makes several important changes to Colorado’s wage enforcement framework. It expands the definition of “employer” to include individuals who own or control at least 25% of a business, increasing personal accountability. It also prohibits payroll deductions that would bring an employee’s wages below the applicable minimum wage. Additionally, the bill gives the Division of Labor Standards and Statistics director discretion to waive penalties for late wage payments if specific conditions are met. Notably, it also repeals a provision that allowed courts to award attorney fees and costs to employers in certain unpaid wage cases—shifting the legal balance more firmly in favor of workers. If signed, this bill could significantly affect how businesses handle wage disputes and payroll compliance. 

 Local Governments Tip Offsets for Tipped Employees (HB25-1208) has passed but awaits the Governor’s signature. This bill allows local governments to implement a tip offset, enabling restaurants to count a portion of employee tips toward meeting local minimum wage requirements. This approach helps restaurants manage rising labor costs while maintaining fair and sustainable compensation for tipped and non-tipped staff. With the hospitality industry still recovering from recent economic challenges, this policy offers flexibility and supports the long-term health of Colorado’s restaurant sector. 

 Colorado Anti-Discrimination Act (HB25-1239) aims to streamline and standardize damages for individuals facing discrimination in housing, public accommodations, or civil rights violations under the Colorado Anti-Discrimination Act (CADA). The bill sets clear remedies including compliance orders, monetary damages, attorney fees, and a $5,000 statutory fine per violation, while capping noneconomic damages at $50,000—with reduced penalties for small businesses that quickly address violations. It also extends the deadline to file complaints from 60 days to one year. There are concerns that the longer complaint window and expanded damages may increase litigation risks, especially for small businesses with limited resources. Many local Chamber of Commerce are advocating for amendments that include a 90-day cure period, waivers for businesses actively working to comply, and exemptions for employers with fewer than 10 employees to ensure a balanced approach that protects both individuals and economic sustainability. 

Business’ Should Carefully Review Passed Bills Facing Potential Veto: 

 Workers’ Compensation Benefits Proof of Entitlement (HB25-1300) has passed but has not yet been signed by the Governor, and there is hope from the business community for a veto. Starting January 1, 2026, the bill requires employers to provide injured employees with a list of Level 1 and Level 2 accredited workers’ compensation providers, giving employees the freedom to choose their medical provider from that list. Additionally, the bill shifts the burden of proof in disputes over whether treatment is reasonable, necessary, or related to the injury from the employee to the employer or their workers’ compensation insurer. Businesses are concerned this change could lead to increased costs and legal challenges, prompting calls for a careful review before the Governor makes a final decision. With the June 6 deadline quickly approaching, now is the time for business owners to voice their concerns. We encourage you to contact the Governor’s office and share your feedback today. 

Legislation That Failed or Was Vetoed 

 Worker Protection Collective Bargaining (SB25-005) was vetoed by Governor Polis, a decision that aligns with strong opposition from Colorado’s business community. The bill aimed to dismantle parts of the long-standing Labor Peace Act, which requires a second vote before union shops can mandate union membership and dues.  Business leaders argue that the Labor Peace Act has been a critical pillar of Colorado’s balanced and business-friendly labor environment for decades. Preserving it helps maintain fairness for employers and employees while keeping Colorado competitive as a place to work and do business.  

 Protecting Workers from Extreme Temperatures (HB25-1286) did not pass, a relief for many in the business community. The bill proposed strict temperature-based workplace standards—triggering requirements at 90 degrees and 30 degrees—that would have far exceeded existing federal OSHA regulations. Opposition to the bill cited serious concerns about its feasibility and the burden it would place on employers, particularly in industries where such thresholds are common or unavoidable. Businesses feared the added compliance requirements could disrupt essential operations, increase costs, and negatively impact Colorado’s broader economy. While protecting worker safety is a shared priority, business leaders emphasized the need for balanced, practical solutions that align with existing federal standards rather than imposing rigid state-specific mandates. 

 Prohibit Surveillance Data to Set Prices and Wages (HB25-1264) failed to pass this session, but it sparked important conversations around the role of data and AI in business operations. The bill attempted to regulate two separate areas—AI-driven consumer pricing and employee wage setting—under a single umbrella, leading to significant confusion and concern within the business community. One of the major issues was the bill’s broad definition of “surveillance,” which could have unintentionally restricted routine practices like employee performance reviews and customer experience monitoring. Many businesses also rely on AI to offer personalized pricing and discounts, a widely accepted practice that benefits both companies and consumers. Advocates for economic growth argued that a more targeted and clearly defined approach is needed to address legitimate concerns without disrupting effective and common business strategies. 

Public Safety Protections – Artificial Intelligence (HB25-1212) did not pass this session, due in part to concerns about its broad scope and potential unintended consequences. While aimed at protecting whistleblowers, the bill allowed disclosures based on a vague “substantial risk,” even without legal violations—raising fears of misuse and exposure of proprietary information. Harsh penalties, including a $10,000 minimum fine and punitive damages, would have placed an undue burden on businesses in Colorado’s emerging AI sector. Opponents called for more balanced protections that don’t stifle innovation. 

Artificial Intelligence Consumer Protections (SB25-318) While the bill did not pass the legislature, businesses should continue to express strong concerns, opposing bills like this due to their complexity, vague language, and potentially harmful impact on Colorado’s business climate. As our state grapples with economic headwinds—such as declining startup activity and population outmigration—businesses call for clarity and stability, not rushed regulations around transformative technologies like AI. This bill, in its current form, raised serious questions about compliance, cost, and feasibility.  

 What’s next for Colorado Business Owners?  

 As we look ahead to the 2026 legislative session, it’s clear that artificial intelligence will remain a major focus for lawmakers in Colorado. With rapid advancements in AI technology impacting everything from pricing and wages to consumer protections and workplace safety, businesses can expect continued scrutiny and new regulations in this area. Staying informed and engaged will be crucial as policymakers work to balance innovation with responsible oversight. We’ll be here to provide updates and help you navigate these changes in Colorado’s evolving business landscape.