Federal Compliance Update

Federal 2022 EEO-1 Component 1 Data Collection Notice

The 2022 EEO-1 Component 1 Data Collection is tentatively scheduled to open in mid-July 2023. Updates regarding the 2022 EEO-1 Component 1 Data Collection, including the opening date, will be posted on the EEO-1 website as they become available.

Who Must File

An employer must file an EEO-1 report if they answer YES to one or more of these questions:

• Does the entire company (at all locations combined) have at least 100 employees?
• Is the company affiliated through common ownership or centralized management with other entities in an enterprise with a total employee count of 100 or more?
• Does the company or any of its establishments have a contract with the federal government worth $50,000 or more and have 50 or more employees?
• Is the company or any of its establishments a federal government contractor that serves as a depository of government funds in any amount or a financial institution that is an issuing and paying agent for U.S. Savings Bonds and Savings Notes in any amount?

If you answered NO to all of the questions above, you do not need to file an EEO-1 report. If you are unsure about the answer to question 2, you should speak with an attorney.

Federal Agencies Issue Joint Statement on AI and Automated Systems

Aiming to promote responsible innovation in automated systems—including those marketed as artificial intelligence or AI—four federal agencies have issued a joint statement pledging to monitor the development and use of these systems and vigorously enforce anti-discrimination laws as they become more common. The agencies issued the statement on April 25, 2023.

Issuing Agencies and Laws Enforced

The agencies that signed on to the joint statement are:

• The Equal Employment Opportunity Commission, which enforces federal laws that prohibit employment discrimination based on certain protected traits, such as race and sex;
• The Department of Justice, which enforces federal laws that prohibit discrimination across many facets of life, including education and employment;
• The Consumer Financial Protection Bureau, which enforces federal laws that prohibit discrimination and unfair, deceptive, or abusive practices in the financial marketplace; and
• The Federal Trade Commission, which enforces federal laws that protect consumers from deceptive or unfair business practices.
  

In the joint statement, the agencies note that existing laws and regulations addressing discrimination and other unlawful practices apply to automated systems and innovative new technology use just as they do to other practices.

Automated Systems and Discrimination Potential

The joint statement notes that potential discrimination in automated systems may come from different sources, including problems with data sets, model access, and design and use. For example, automated system outcomes can be skewed by unrepresentative or imbalanced data sets, data sets that incorporate historical bias, or data sets that contain other types of errors. Automated

systems also can correlate data with protected classes, which can lead to discriminatory outcomes.

Employer Impact

The joint statement was issued for informational purposes only and does not create any new legal rights or obligations. Nevertheless, employers that use automated systems to make employment decisions should become familiar with the joint statement and ensure that their policies and practices comply with all applicable laws enforced by the signing agencies.

Important Information

“Automated systems” is used broadly to mean software and algorithmic processes, including AI, that are used to automate workflows and help people complete tasks or make decisions.

• Use of automated systems may perpetuate unlawful bias, automate unlawful discrimination and produce other harmful outcomes.
• Existing laws and regulations apply to the use of automated systems and innovative new technologies just as they apply to other practices.
• The four agencies pledged to vigorously protect individuals’ rights regardless of whether legal violations occur through traditional means or advanced technologies.
• The statement does not create or change any new rights or obligations for employers.

State Compliance Update

Legislative Actions to Watch – Information obtained directly from the State of Colorado. This is not an all-inclusive list for employment law updates.

SB23-017 – Additional Uses Paid Sick Leave – Sent to the Governor

The bill allows an employee to use accrued paid sick leave when the employee needs to:

• Care for a family member whose school or place of care has been closed due to inclement weather, loss of power, loss of heating, loss of water, or other unexpected occurrence or event that results in the closure of the family member's school or place of care; or
• Grieve, attend funeral services or a memorial, or deal with financial and legal matters that arise after the death of a family member; or
• Evacuate the employee's place of residence due to inclement weather, loss of power, loss of heating, loss of water, or other unexpected occurrence or event that results in the need to evacuate the employee's residence.

HB23-1212 – Promotion of Apprenticeships – Senate Third Reading Passed – No Amendments

The bill directs the office of future of work (office) in the department of labor and employment to create an a two year apprenticeship navigator pilot program (program) with 2 full-time apprenticeship navigators, with each apprenticeship navigator assigned to a different school district selected by the office. The purpose of the program is to increase awareness of registered apprenticeship programs among graduating high school students in the selected school districts.

The bill also directs the office to promote apprenticeship programs to high school students by creating and maintaining a web-based job board of apprenticeships and incorporating apprenticeships in the state's career planning tools.

The bill appropriates $342,638 to the department of labor and employment for use by the executive director's office for the 2023-24 state fiscal year. The bill also appropriates $44,000 to the department of education from the general fund for the 2023-24 state fiscal year.

HB23-1146 – Employees May Accept Cash Tips – Introduced in Senate – Assigned to Appropriations The bill prohibits an employer engaged in a business from taking adverse action against an employee who accepts a cash gratuity offered by a patron of the business.

The bill provides exceptions for:

• Employers regulated by the division of gaming in the department of revenue;
• Employees licensed, certified, or registered pursuant to the title governing professions and occupations and who is required to maintain such licensure, certification, or registration as a condition of employment with the employee's employer;
• Employees working in a health-care facility regulated by the department of public health and environment;
• Employees working for the program of all-inclusive care for the elderly; and
• Employees providing housing and services to adults 60 years of age or older.

SB23-105 – Ensure Equal Pay for Equal Work – House Third Reading Passed – No Amendments Current law authorizes the director of the division of labor standards and statistics in the department of labor and employment (director) to create and administer a process to accept and mediate complaints, to provide legal resources concerning alleged wage inequity, and to promulgate rules as necessary for this purpose.

The bill changes these authorizations to requirements.

Additionally, the bill requires the director to:

• Investigate complaints or other leads concerning wage inequity;
• Upon finding of a violation, order compliance and relief; and
• Promulgate rules to enforce the bill.

The bill also requires an employer to:

• For each job opportunity or promotional opportunity where the employer is considering more than one candidate, follow specific guidelines for posting the opportunity;
• For all job opportunities and promotional opportunities, provide specific information to employees regarding the candidate selected for the opportunity; and
• For all objectively defined career progressions, disclose the requirements for career progression and the terms of compensation, benefits, status, duties, and access to further advancement.

SB23-232 – Unemployment Insurance Premiums Allocation Federal Law Compliance – Governor Signed Joint Budget Committee. For purposes of complying with requirements of the "Federal Unemployment Tax Act", the bill reduces employer premium rates by 10% across all rates in the standard premium rate schedule. Additionally, the bill creates a schedule for the support surcharge rate (schedule), which is used to establish contributions to the employment support fund, to the employment and training technology fund, and to the benefit recovery fund. The new schedule uses the same methodology as is used in calculating an employer's percent of excess, which is the percentage resulting from the calculation of an employer's excess of premiums paid over benefits charged, divided by the average chargeable payroll.

The bill changes the cap on the amount of money in the employment support fund at the end of any state fiscal year, from an amount calculated based on a portion of the employer premium plus $17 million, to a total of $32.5 million for the next state fiscal year, which amount is adjusted annually based on changes in average weekly earnings. Additionally, the bill repeals, effective June 30, 2025, the ability of the department of labor and employment (department) to use money in the employment support fund to provide funding for labor standards, labor relations, and Colorado works grievance procedures.

The bill expands the authorized use of money in the Title XII repayment fund to allow the division of unemployment insurance (division) in the department of labor and employment (department) to use the money for costs associated with bonds or notes issued by the division, including interest on the bonds or notes, to the extent permitted by federal law.

The bill eliminates the requirement for employers to submit premium reports to the division and instead requires employers to submit wage reports.

The bill adjusts the appropriations in the annual general appropriation act for the 2023-24 state fiscal year to  the department for use by the division as follows:

• Decreases the general fund appropriation for program costs related to labor standards by $899,537; and
• Increases the cash funds appropriation from the employment support fund for program costs related to labor standards by $899,537.

SB23-261 – Direct Care Workforce Stabilization Board – House Third Reading Passed – No Amendments

The bill creates the direct care workforce stabilization board (board) in the department of labor and employment (department) to review the direct care industry, which is the industry of workers who provide home-based or community-based direct care to individuals who require assistance in accomplishing activities of daily living. The bill directs the board, at least once every 2 years, to review the direct care industry and develop recommendations for:

• Minimum employment standards for direct care workers based on information gathered through an investigation of the direct care industry market in relation to the Colorado labor market; and
• Improving state communications with direct care workers about their rights and the obligations of direct care employers.

The board must conduct public hearings to engage direct care workers, direct care employers, and direct care consumers in the development of the standards and recommendations for improved communications. The executive director of the department may direct the board to review minimum direct care employment standards more frequently.

The board must report any recommendations approved by at least 6 8 board members to the governor and specified committees of the general assembly by September 1, 2024, and at least every 2 years thereafter. Direct care employers are prohibited from retaliating against direct care workers for participating in board meetings and activities. The board is subject to a sunset review and repeal on September 1, 2029.For the 2023-24 state fiscal year, the bill appropriates $81,912 from the general fund to the department of labor and employment for use by the executive director's office to implement the bill.

SB23-172 – Protecting Opportunities and Worker’s Rights Act – House Third Reading Passed – No Amendments

For purposes of addressing discriminatory or unfair employment practices pursuant to Colorado's anti- discrimination laws, the bill enacts the "Protecting Opportunities and Workers' Rights (POWR) Act", which:

• Directs the Colorado civil rights division (division) to include "harassment" as a basis or description of discrimination on any charge form or charge intake mechanism;
• Adds a new definition of "harass" or "harassment" and repeals the current definition of "harass" that requires creation of a hostile work environment;
• Adds protections from discriminatory or unfair employment practices for individuals based on their "marital status";
• Specifies that in harassment claims, the alleged conduct need not be severe or pervasive to constitute a discriminatory or unfair employment practice;
• For purposes of the exception to otherwise discriminatory practices for an employer that is unable to accommodate an individual with a disability who is otherwise qualified for the job, eliminates the ability for the employer to assert that the individual's disability has a significant impact on the job as a rationale for the employment practice;
• Specifies that it is a discriminatory or an unfair employment practice for an employer to fail to initiate an investigation of a complaint or to fail to take prompt, reasonable, and remedial action;
  
• Specifies the requirements for an employer to assert an affirmative defense to an employee's proven claim of unlawful harassment by a supervisor; and
• Specifies the requirements that must be satisfied for a nondisclosure provision in an agreement between an employer and an employee or a prospective employee to be enforceable; and
• Requires an employer to maintain personnel and employment records for at least 5 years and, with regard to complaints of discriminatory or unfair employment practices, to maintain those records in a designated repository.

The bill appropriates a total of $1,248,170 from the general fund for the 2023-24 state fiscal year, allocated as follows to the following state departments and offices, to implement the bill:

• $152,866 to the department of corrections;
• $23,469 to the department of education;
• $35,415 to the office of the governor;
• $23,363 to the department of health care policy and financing;
• $129,081 to the department of human services;
• $146,894 to the judicial department;
• $46,833 to the department of labor and employment;
• $17,708 to the department of law;
• $76,276 to the department of natural resources;
• $89,090 to the department of personnel;
• $52,912 to the department of public health and environment;
• $52,912 to the department of public safety;
• $266,298 to the department of regulatory agencies;
• $47,045 to the department of revenue; and
• $88,008 to the department of transportation.

SB23-058 – Job Application Fairness Act – Senate Considered House Amendments – Result was to Concur – Repass

Starting July 1, 2024, the bill prohibits employers from inquiring about a prospective employee's age, date of birth, and dates of attendance at or date of graduation from an educational institution on an initial employment application.

An employer may request an individual to verify compliance with age requirements imposed pursuant to or required by:

• A bona fide occupational qualification pertaining to public or occupational safety;
• A federal law or regulation; or
• A state or local law or regulation based on a bona fide occupational qualification.

The department of labor and employment (department) is charged with enforcing the requirements of the bill and may issue warnings and orders of compliance for violations and, for second or subsequent violations, impose civil penalties. A violation of the restrictions does not create a private cause of action. The department is directed to adopt rules regarding procedures for handling complaints against employers.

For the 2023-24 state fiscal year, the bill requires the general assembly to appropriate $56,468 from the general fund to the department for use by the division of labor standards and statistics for program costs related to labor standards.

HB23-1030 – Prohibit Direct-hire Fee Health-care Staff Agency – Sent to the Governor

The bill prohibits a supplemental health-care staffing agency (staffing agency) from including in a contract or agreement with a health-care worker nursing care facility, or assisted living residence or health-care facility a provision for liquidated damages, employment fees, or other compensation to be paid to the staffing agency if the nursing care facility or assisted living residence health-care facility hires the health-care worker as a permanent employee either prior to or after the termination of the contract or agreement. If a staffing agency that violates the prohibition commits a civil infraction and is subject to a monetary penalty. Further,

for repeated or willful violations, the executive director of the department of labor and employment may impose monetary or administrative penalties against the staffing agency unlawfully collects or attempts to collect liquidated damages, employment fees, or other compensation from a health-care worker or health- care facility, the health-care worker or health-care facility may bring a legal action for damages, a civil penalty not to exceed $5,000 per violation, and injunctive relief.

HB23-1078 – Unemployment Compensation Dependent Allowance – Introduced in Senate – Assigned to Business, Labor, & Technology

The bill creates a dependent allowance for an individual receiving unemployment compensation (eligible individual) for each of the eligible individual's dependents. The dependent allowance starts on July

1, 2025 2026, is $35 per dependent per week, and increases annually for inflation if necessary. The bill defines "dependent" as a child of an eligible individual who receives at least half of the child's financial support from the eligible individual and who is:

• Under 18 years of age; or
• 18 years of age or older and incapable of self-care because of a mental or physical disability.

The bill requires the division of unemployment insurance to report to the general assembly regarding the dependent allowance annually, beginning August 31, 2025 2026, and by August 31 of each year thereafter. The bill appropriates $655,530 to the department of labor and employment for the 2023-24 state fiscal year to implement the act.

HB23-1076 – Workers’ Compensation - Introduced in Senate – Assigned to Business, Labor, & Technology

Section 1 of the bill increases the limit on medical impairment benefits based on mental impairment from 12 weeks to 36 weeks. Section 2 removes language authorizing an employee to petition the division of workers' compensation in the department of labor and employment (division) prior to receiving a replacement of any artificial member, glasses, hearing aid, brace, or other external prosthetic device, including dentures. Section 3 allows an employee to request a hearing when the employee's temporary total disability benefits end based on an attending physician's written release to return to regular employment.

Section 4 specifies that when a physician recommends medical benefits after maximum medical improvement, the benefits admitted by the insurer or self-insured employer are not limited to any specific medical treatment.

Current law requires an insurance carrier to provide an independent medical examiner and all other parties a complete copy of all medical records in its possession pertaining to an injury. Section 5 limits the medical records required to be provided to records relevant to the injury. Section 5 also specifies how the division is required to determine the amount and allocation of costs to be paid by the parties for an independent medical examination. Section 6 allows a prehearing administrative law judge to issue interlocutory orders resolving disputes regarding the content and format of the independent medical examiner's medical record packet, indigency status, and the allocation of independent medical examiner costs.

Current law states that a contingent attorney fee exceeding 20% of the amount of contested benefits is presumed to be unreasonable. Section 7 increases the amount to 25%.

SB23-231 – Amend Fund to Allow Payment Overdue Wage Claims – Governor Signed

Joint Budget Committee. The bill amends the wage theft enforcement fund (fund) to allow the division of labor standards and statistics (division) in the department of labor and employment (department) to use money in the fund to pay employees who are owed money from their employers due to obligations and liabilities related to the payment of wages or other compensation. If an employer fails to fulfill the order to pay an employee that results from a wage claim or an investigation within 6 months after the division issues a citation and notice of assessment to the employer or, if the employer requests a hearing, within 6 months after the hearing officer issues a decision, the bill allows the division to pay the employee, from the fund, the amount of money owed by the employer. The bill specifies that after the division pays the employee, the employee cannot recover that payment amount from the employer, the division shall continue to pursue payment from the employer, and any money recovered from the employer by the division will be credited to the fund.

The bill requires the division to promulgate rules specifying procedures for employees to request payments and criteria for the division to make determinations on employee requests.

The bill also continuously appropriates money in the fund to the division for the purpose of making payments to employees and excludes the fund from the limit on cash fund reserves.

For the 2023-24 state fiscal year, the bill appropriates $12,657 from the fund to the department for use by the executive director's office for personal services.

Compliance Calendar

May

Nothing this month

June

06/01 – Prescription Drug Data Collection Reporting (group health plans and health insurers submit data regarding drug costs to the Department of Treasury, Department of Labor, and Health and Human Services.

July

07/01 – 2022 EEO-1 Component 1 Data Collection Opening (all private sector employers with 100 or more employees, and federal contractors with 50 or more employees meeting certain criteria must submit)

07/31 – Form 5500 Filing Deadline (calendar year plans) 07/31 – Form 941 Filing Deadline (second quarter) 07/31 – PCORI Fee Deadline