claims and settle cases. However, we felt that HB 25-1001 might be overly harsh, exposing good-faith employers to steep penalties for complex or technical errors — thus punishing companies that make honest mistakes rather than willful violations. Worker classification disputes often involve gray areas, and the law’s strict penalty structure and retaliation presumption fail to distinguish intent. We cautioned legislators that these changes may inadvertently hurt small or emerging companies that lack legal or HR staff. ABC also felt that the 90-day retaliation presumption and limited ability to recover legal fees would invite speculative or defensive claims, forcing employers to settle even weak cases. ABC supports fair pay enforcement in principle and opposes draconian approaches that add risk, legal exposure and compliance costs at a time when many contractors are dealing with several other economic challenges. Bottom Line for Contractors: HB 25-1001 Because HB25-1001 combines tougher penalties and public disclosure with a narrow path to forgiveness for employers that act swiftly and in good faith, there are some things contractors should start now to stay compliant. First, review all worker classifications — especially among trades, subcontractors and independent crews. Ensure that every relationship meets state and federal definitions, and document the reasons why each worker qualifies as a contractor, if applicable. Misclassification fines can reach $50,000 per violation, so it’s worth auditing agreements, supervision practices and project roles now. Second, tighten payroll and wage-claim procedures. Contractors have 14 days after a formal CDLE complaint to pay any wages owed and avoid automatic penalties. Keep accurate records of hours, pay and deductions, and be ready for the CDLE’s expanded authority to handle wage claims up to $13,000 starting July 2026. Finally, train superintendents and foremen on retaliation risks. Any disciplinary action within 90 days of a wage complaint can be presumed retaliatory unless properly documented. Encourage field leaders to escalate concerns quickly and handle wage issues professionally. Construction firms that audit classifications, resolve wage claims promptly and train front-line leaders will be best positioned to demonstrate good faith and maintain compliance under Colorado’s tougher wage-law enforcement. Project Labor Agreements Now in Statute: HB25-1130 New 2025 legislation explicitly authorizes state and local government agencies to require PLAs on public construction projects valued at $1 million or more. While the law does not mandate PLAs across the board, its passage marks a significant shift in state policy and presents new challenges for all the nonunion contractors who represent the overwhelming majority of Colorado’s construction workforce. We discuss this policy matter elsewhere in this publication. Construction Litigation Reform: HB25-1272 In the first new reform addressing construction defects litigation since 2016 (which originated from a bill I sponsored while serving as a Colorado state senator), HB25-1272 establishes the Multifamily Construction Incentive Program (MCIP), which took effect on Jan. 1, 2026. Builders and developers may choose to participate by providing a no-cost warranty that covers defects and damage for specified periods, commissioning a third-party inspection and recording a notice of election to participate in the property’s chain of title. For construction defect claims involving MCIP projects, the bill introduces new standards and limitations. Claimants must file a certificate of review when suing architects or engineers and may bring actions only for defects that significantly affect safety, functionality or property use. The bill also sets the statute of limitations at eight years after substantial completion — or six years if the work was performed under a written warranty or with reasonable care. Construction professionals must also provide an offer to settle or a written response identifying the applicable standards and explaining why a repair may not be required. This is a complex and untested regime. Builders should consult legal counsel and insurance providers before opting a project into the MCIP. Participation may increase exposure while reducing strategic flexibility without adding new protections. Some underwriters of multifamily CGL policies have expressed concern that the program’s parameters could actually raise, rather than reduce, litigation risks. Contractors are also encouraged to coordinate with their trade partners before opting in, as the program’s procedural requirements and disclosure rules will affect all professionals involved — and some trades may decline work on MCIP projects for this reason. Unfortunately, as can happen in the final hectic days of the legislature, a drafting error in Section 4 of HB25-1272 extends certain notice and disclosure requirements to all construction defect claims, not just those under the MCIP. This was not the intention of the lawmakers 32
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