The Rocky Mountain Employer

“On April 10, 2026, the U.S. Department of Justice (“DOJ”) announced a settlement with International Business Machines Corporation (“IBM”) that resolved allegations that IBM violated the False Claims Act (“FCA”) by failing to comply with anti-discrimination requirements in its federal contracts (the “Settlement”).  This Settlement marks the first instance where the DOJ has utilized the FCA to combat what it considers to be  unlawful diversity, equity, and inclusion (“DEI”) practices after the DOJ announced its intent to utilize the FCA as such in May of 2025. This development, which employers receiving federal funding or operating as government contractors should especially be aware of, reflects the DOJ is holding true to its commitment to utilize the FCA to combat allegedly unlawful DEI practices in the private sector.”

“President Trump’s Executive Order entitled, “Addressing DEI Discrimination by Federal Contractors,” (the “Order”) builds on the Administration’s earlier anti-DEI Executive Orders by defining what it views as prohibited “racially discriminatory DEI activities” in federal contracting. The Order focuses on preventing race- or ethnicity-based disparate treatment in recruiting, hiring, promotion, contracting, mentoring, training, leadership programs and similar opportunities by requiring covered federal contracts to include a lengthy clause controlling federal contractors’ conduct related to racially discriminatory DEI activities and by imposing penalties, such as the termination of contracts, on federal contractors who do not comply with the clause. The Order does not mention discriminatory DEI activities based on sex.”

“On March 9, 2026, Colorado legislators introduced House Bill 26-1327 titled, Large Employer Health-Care Support Enterprise Act (the “Bill”) for the Colorado General Assembly’s consideration.  By doing so, Colorado legislators supporting the Bill are aiming to reduce the costs of state-subsidized medical assistance benefits by imposing a fee of $2,300.00 on large employers for every employee receiving said benefits.”

“On February 26, 2026, the National Labor Relations Board (“NLRB”) issued a rule withdrawing the 2023 joint employer rule, which had expanded potential employer liability by allowing a finding of joint-employer status based on reserved or indirect control over an employee’s terms and conditions of employment, even if such control was not exercised. The joint employer standard—used to determine whether two entities are considered employers of the same employees—was thereby narrowed, as the NLRB reinstated the more control-based 2020 standard. This latest development reflects another shift in federal labor policy and underscores the ongoing fluctuation in how joint employment is defined under the National Labor Relations Act (“NLRA”).”

“Colorado lawmakers are considering two competing bills that would change agricultural overtime rules. One bill, SB 26-081, would lower the current overtime threshold for agricultural employes from 48 hours to 40 hours per workweek to match the rules that generally apply to other Colorado workers. The other, SB 26-121, would raise the threshold to 60 hours per week. For agricultural employers, the debate matters because either bill could materially change labor costs, scheduling practices, and recordkeeping obligations.”

“On March, 4, 2026, Colorado legislators introduced House Bill 26-1319 titled, Right to Be Out at Work (the “Bill”) for the Colorado General Assembly’s consideration.  The Bill seeks to expand the Colorado Anti-Discrimination Act’s (“CADA’s”) protections of LGBTQ+ employees by generally prohibiting employers from taking adverse employment actions against employees who disclose their gender identity, sexual orientation, transgender or nonbinary status in the workplace, including by referring to themselves or others by their chosen names, pronouns, or personal titles. Further, the Bill would require certain employers to take affirmative steps to accommodate LGBTQ+ employees, such as implementing training programs to ensure inclusive workplaces for LGBTQ+ employees, adopting a transition plan for transitioning employees, and allowing employees to use sick or personal leave to change their legal name or obtaining gender-affirming care. “‍ ‍

“On February 26, 2026, the Department of Labor (“DOL”) announced a proposed rule (the “Proposed Rule”) that would reinstate a modified version of the 2021 employer-friendly “economic reality” test used to determine whether a worker is properly classified as an independent contractor or employee under the Fair Labor Standards Act (“FLSA”), the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act.”

“A new state-level workplace safety enforcement system designed to fill potential gaps in the federal Occupational Safety and Health Administration’s (“OSHA”) enforcement of its regulations contained in House Bill 26-1054 (the “Bill”), is being heard on February 26, 2026, in the Colorado House Business Affairs and Labor Committee. While the Bill mirrors parts of the federal Occupational Safety and Health Act (“OSH Act”), it goes much further, especially by establishing its own workplace standards; allowing private rights of action to enforce safety standards; expanding penalties for workplace safety violations; and giving the Colorado Division of Labor Standards and Statistics (the “Division”) broad rulemaking authority.”

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“On February 6, 2026, the United States District Court for the District of Colorado dismissed a King Soopers employee’s (acting on behalf of a class) case, pursuant to the non-statutory labor exemption, alleging The Kroger Company (“Kroger”) and Albertsons Companies, Inc. (“Albertsons”) unlawfully colluded during Kroger and United Food and Commercial Workers Local 7’s (the “Union’s”) negotiations of the renewal of their collective bargaining agreement.  Specifically, the employee alleged Albertsons agreed with Kroger not to hire any of Kroger’s striking workers in an effort to hamper the Union’s bargaining strength with Kroger in violation of Colorado’s antitrust statute (the “Agreement”). However, the Court determined that the Agreement was exempt from antitrust scrutiny and dismissed the case.”

“Recent federal developments have prompted renewed attention to disparate impact liability in the context of reductions in force (“RIF”). In April of 2025, the Trump administration issued  Executive Order 14281 directing federal agencies, including the U.S. Equal Employment Opportunity Commission (“EEOC”), to de-prioritize disparate impact as a litigation and enforcement tool. Because disparate impact claims frequently arise from workforce reductions, the administration’s announcement has drawn attention to whether this shift meaningfully alters employer risk.”

“On February 1, 2026, two key rules from the Colorado Department of Labor and Employment (“CDLE”) took effect: The Colorado Overtime and Minimum Pay Standards (“COMPS”) Order #40 and the 2026 Publication and Yearly Calculation of Adjusted Labor Compensation (“PAY CALC”) Order. Together, these rules set Colorado’s minimum wage and pay standards for the year. “

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Earlier this month, the U.S. Department of Labor’s Wage and Hour Division (“DOL”) issued Opinion Letter FLSA2026-2 (“Opinion Letter”), providing additional guidance on when bonus payments must be included in an employee’s “regular rate of pay” for purposes of calculating overtime under the Fair Labor Standards Act (“FLSA”).

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On January 5, 2026, the U.S. Department of Labor (“DOL”) issued an opinion letter explaining that leave taken under the Family and Medical Leave Act (“FMLA”) to attend medical appointments may include the time spent traveling to and from the appointment. This is true even when an employee’s medical certification from a health care provider confirms the need for the appointment but does not address the associated travel time.

“In December 2024, Rocky Mountain Employer examined the Colorado labor movement’s push to eliminate the Colorado Labor Peace Act’s (“LPA”) requirement that employees approve union security agreements through a second election subject to a heightened approval threshold. That effort culminated in the General Assembly’s passage of Senate Bill 25-005 (“SB25-005”) in 2025, which Colorado Governor Jared Polis vetoed. As discussed in a previous Rocky Mountain Employer article analyzing the veto, the Governor’s decision preserved Colorado’s status as a modified right-to-work state, while signaling that renewed legislative efforts were likely. Those efforts have now resumed. At the outset of the 2026 legislative session, Democratic lawmakers have reintroduced House Bill 26-1005, which is substantially similar to the 2025 version, once again placing the LPA’s second-election requirement at the center of Colorado’s labor policy debate.”

“On January 1, 2026, the Colorado Department of Labor and Employment’s Division of Family and Medical Leave Insurance (the “Division”) issued an emergency amendment (the “Amendment”) to its regulations concerning employee and employer rights and responsibilities under Colorado’s Paid Family and Medical Leave Insurance Act and program (“FAMLI”). The Amendment extends the time period to comply with certain tax reporting and withholding requirements issued by the IRS.”

“The National Labor Relations Board (“NLRB” or “Board”) is structured as a five-member body, but the National Labor Relations Act (“NLRA”) requires at least three Senate-confirmed members for the Board to exercise its full authority, including issuing decisions, resolving appeals, and setting binding precedent under federal labor law. For much of 2025, the Board has operated below that three-member quorum, leaving it unable to issue Board-level decisions even as regional offices and enforcement functions have remained active, effectively preventing the Board from carrying out its core adjudicatory role. This dynamic is likely to shift in 2026, as the confirmation of pending nominees would restore the Board’s quorum and allow it to again issue binding decisions and provide long-awaited clarity to employers and employees.”

“As 2026 draws near, a few important statutory and regulatory updates are set to take effect on January 1 that will require Colorado employers to revise policies, payroll configurations, and internal leave administration. While the list is not exhaustive, the changes that are to take effect carry implications for employers navigating parental leave, minimum wages and wage thresholds, and compliance planning in the year ahead.”

“On June 30, 2026, Colorado’s Senate Bill 24-205 (“SB24-205”), also known as the Colorado AI Act, goes into effect. The law requires employers to exercise reasonable care when using high-risk AI systems to prevent algorithmic discrimination. SB24-205 authorizes the Colorado Attorney General (“AG”) to treat violations as deceptive trade practices and to impose civil penalties for violations.”