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Posted: February 27, 2013

Keep an eye on these Colorado business bills

They run the gamut from employment to contracting

Tom Wagner

In addition to headline-grabbing bills on gun control and civil unions, Colorado legislators have proposed a number of new laws that would affect businesses. These proposed laws run the gamut from employment to construction contracting. Here are summaries of several proposals under consideration:

House Bill 1090 – The Construction Prompt Payment Reform Act

HB 1090 would substantially intrude into the contractor-subcontractor relationship to make private contracts more like public construction contracts. Proposed rules under this bill include:

1) Requiring an owner and general contractor to make regular progress payments approximately every 30 days to contractors and subcontractors for work actually performed. To receive the progress payments, the contractor and subcontractor must submit a progress payment invoice plus any required documents. A contractor must pass on the progress payment to the subcontractor within 5 days, or by the end of the billing cycle. Interest would accrue on unpaid progress payments. The bill would allow parties to extend the billing cycle by contract to 60 days, but the contract must warn of this. The bill would also authorize a contractor or subcontractor to suspend performance after 15 days’ notice if the owner or contractor fails to make progress payments. After suspending performance, the contractor or subcontractor is obliged to resume work after being paid for the work, as well as reasonable costs and interest.

2) Limiting an owner or contractor to retainage of 5 percent of each progress payment. If a subcontractor's work is done before the whole project is done, the subcontractor may apply to be paid the retained 5 percent. The owner and contractor must pay the retainage if the work is done correctly and the subcontractor gives waivers and the proper documents. A person who retains from a payment must give the contractor or subcontractor a chance to cure the default.

3) Requiring an owner and contractor to pay for changes made to the contract. If they cannot agree on the price, the person doing the work may bill monthly at cost plus 15 percent or terminate performance.

4) Voiding any provision in a construction contract that does not comply with these requirements. This bill will be worth watching for anyone in the construction industry.

HB 1136 – The Job Protection and Civil Rights Enforcement Act of 2013

The headline bill in the employment area this year is HB 1136, which would permit employees to recover additional remedies in employment discrimination lawsuits under state law. Currently, state law does not allow an award of compensatory or punitive damages or attorney fees and costs to a plaintiff who prevails on a complaint before the Colorado Civil Rights Commission, or in a lawsuit alleging a discriminatory or unfair employment practice under state law, even in cases of intentional discrimination. Although federal law does allow such damages, federal law applies only to employers with more than 15 employees. This bill would extend those remedies to small employers, as well as permitting employees to sue employers for discrimination on the basis of sexual orientation, a category not currently protected under federal law.

The bill would also remove the maximum age limit for purposes of age discrimination claims under state law, thereby permitting persons 70 years of age or older to pursue a claim based on age discrimination.

This bill is another one to watch, especially for small employers currently exempt from federal anti-discrimination laws.

House Bill 1046 – Employer Access to Personal Information Through Electronic Devices

Another employment-related measure, HB 1046 would make it illegal for an employer to require employees to divulge the employee’s user name, password, or other means for accessing a personal account like Facebook or Twitter through an electronic communications device like a cell phone or iPad. The bill also prohibits an employer from terminating, demoting, or refusing to hire an employee or applicant who does not provide access to his or her personal accounts or services.

In essence, this bill will preclude employers from forcing their employees to grant employers access to employee social media accounts except to ensure compliance with securities or financial laws, or for suspected unauthorized downloading of proprietary information based on the receipt of information about these activities.

Employers with compliance obligations, like those regulated by the SEC, should monitor this bill closely.

Senate Bill 18 – Use of Consumer Credit Information by Employers

SB 18 would prohibit an employer from using consumer credit information for employment purposes if the information is unrelated to the job. The bill would also require an employer to disclose to an employee, or applicant for employment, when the employer uses the employee’s or applicant’s consumer credit information to take adverse action against him or her, and the particular credit information upon which the employer relied. The bill also authorizes an employee or applicant to bring suit for an injunction or damages against an employer in violation of this law.

Obviously, this bill would have a significant impact on the recruiting and hiring practices of many employers.

House Bill 1222 – Expansion of FMLA

HB 1222 would expand the scope of family members that would entitle an employee to take leave under the Federal Family Medical Leave Act to include children of all ages, grandparents, siblings, grandchildren and civil union partners.

Many of these bills are in preliminary stages and are likely to be modified before they become law, if ever. Nevertheless, Colorado businesses would be wise to pay attention to the many changes out there that might affect them.
 

Tom Wagner is an attorney with the Denver law firm Moye White LLP.  Contact him at 303-292-2900 or at tom.wagner@moyewhite.com

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