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Colorado Compliance Connection - July 2022

July 28, 2022

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Federal Compliance Update 

EEOC Updates COVID-19 Guidance to Require Justification for Testing


On July 12, 2022, the Equal Employment Opportunity Commission (EEOC) issued updated guidance on whether and when employers may test their employees for COVID-19. While the previous guidance generally allowed employers to require testing for all employees entering a workplace, the new guidance requires an individualized assessment of current circumstances.


The Americans with Disabilities Act (ADA), which is enforced by the EEOC, prohibits employers from conducting medical examinations of employees unless they can show that an examination is “job-related” and “consistent with business necessity.” Early in the pandemic, the EEOC indicated that, for COVID-19 testing, these standards would virtually always be met for any employees entering a workplace with other people.

Updated Testing Guidance

In its updated guidance, the EEOC makes clear that, going forward, employers will need to assess whether current pandemic circumstances and individual workplace circumstances justify COVID-19 testing requirements.

Assessment Factors

Possible factors to consider in making the assessment include community transmission levels, types of contact between employees and others in the workplace, transmissibility rates of current COVID-19 variants, types of contact employees may have with others in the workplace, and the potential impact on operations if an employee enters the workplace with COVID-19.

In making these assessments, employers should check the latest guidance from the Centers for Disease Control and Prevention (and any other relevant sources) to determine whether testing is appropriate for their employees. 

DHS Ends Temporary COVID-19 Policy for Form I-9 Expired Documents

On May 1, 2022, the U.S. Department of Homeland Security (DHS) ended the COVID-19 Temporary Policy for List B Identity Documents. As a result, employers are no longer allowed to accept expired List B documents when individuals fill out their Form I-9. In addition, if an employee presented an expired List B document between May 1, 2020, and April 30, 2022, employers are required to update their Form I-9 by July 31, 2022.

Temporary Policy

DHS issued the temporary policy in response to the challenges many individuals experienced with renewing List B documents during the COVID-19 pandemic. 

Now that document-issuing agencies have reopened and provide alternatives to in-person renewals, the DHS has ended this flexibility. Employers will need to update Form I-9 for employees who used expired documents from List B. 

Required Form I-9 Updates

Employers must use the “Additional Information” field in the form’s Section 2 to enter the title, issuing authority, number, and expiration date of the unexpired document. Employees may present a renewed List B document, a different List B document or a document from List A. Employers must also initial and date these changes. 

Employers should note that no action is required for individuals who used expired List B documents if: 

  • They are no longer employed; or
  • The List B document was auto extended by the issuing authority (the document is considered unexpired when presented).

Federal: Court Finds EEOC Guidance Unenforceable in Certain States

On July 15, 2022, the U.S. District Court, Eastern District of Tennessee at Knoxville held that the Equal Employment Opportunity Commission (EEOC) guidance about sexual orientation and gender identity employment discrimination is unenforceable in certain states. However, it's still illegal for employers to discriminate based on sexual orientation and gender identity under Title VII of the Civil Rights Act of 1964.

Temporary and Limited Ruling

The court's ruling is temporary (at least for now) and only applies in the states that sued (Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, and West Virginia). The ruling also only controls the EEOC and doesn't prevent employees from suing for gender discrimination because of sexual orientation or gender identity.


In 2020, the Supreme Court of the United States held in Bostock v. Clayton County that Title VII's prohibition on employment discrimination because of sex includes discrimination on the basis of sexual orientation and gender identity. In response, the EEOC issued guidance that elaborates on these employment protections, providing several scenarios that it considers violate Title VII. Several states sued the EEOC about its guidance, seeking for the guidance to be thrown out.  A court has now put a hold on the EEOC enforcing its guidance while the lawsuit proceeds.

Proposed Rule Would Amend Section 1557 Sex Discrimination Regulations

On July 25, 2022, the Department of Health and Human Services (HHS) issued a proposed rule that would revise existing regulations for the Section 1557 nondiscrimination protections under the Affordable Care Act (ACA). The proposed rule is intended to solidify protections against discrimination based on sex, including sexual orientation and gender identity.

ACA Section 1557

Section 1557 prohibits discrimination based on sex in any health program or activity that receives federal funds or is administered by a federal agency. A 2016 HHS rule defined “sex” to include sex stereotypes and gender identity, along with pregnancy termination and other pregnancy-related conditions.

In 2020, HHS issued new regulations that changed the 2016 definition of “sex” to allow for distinctions based on “the biological binary of male and female.” However, a federal court blocked HHS from enforcing the 2020 version of the rule. On May 10, 2021, HHS announced that it would now interpret and enforce the Section 1557 prohibition on discrimination based on sex to include discrimination based on sexual orientation and gender identity.

Proposed Rule

The proposed rule attempts to address gaps identified in prior regulations to advance protections under Section 1557. It would, among other things:

  • Clarify the application of Section 1557 nondiscrimination rules to health insurance issuers that receive federal financial assistance;
  • Codify nondiscrimination protections on the basis of sex as including discrimination based on sexual orientation and gender identity;
  • Clarify that sex discrimination includes discrimination based on pregnancy or related conditions, including “pregnancy termination;” and
  • Require covered entities to have Section 1557 policies and training.

Proposed Overtime Rule Expected in October 2022

In its recent spring regulatory agenda, the U.S. Department of Labor (DOL) announced its plans to issue a proposed overtime rule in October 2022. According to the agency’s regulatory agenda, this proposed rule is expected to address how to implement the exemption of executive, administrative and professional employees from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime requirements.

The DOL provided a similar notice last fall but has yet to specify what changes it may be considering. In recent years, some experts note that the agency has contemplated modifying the duties test and salary thresholds for exempt employees.

What Will the Proposed Overtime Rule Address?

This proposed overtime rule could provide clarity for classifying exempt employees and increasing their salary levels under the FLSA. Some experts believe the DOL could even create automatic annual or periodic increases to exempt employees’ salary levels by linking them to the consumer price index, allowing exempt employees’ salary thresholds to adjust without formal rule-making. The current annual salary threshold for exempt employees is $35,568.

The DOL has held several calls with industry stakeholders and recently conducted multiple regional listening sessions to gather information. Still, there’s no firm date for when the agency will release the proposed overtime rule. Changes to minimum wage and overtime requirements under the FLSA could impact compliance costs and litigation risks for employers.

What’s Next?

Regulatory agendas outline a federal agency’s goals for the upcoming months. Although these agendas aren’t set in stone, they give insight into the current administration’s priorities and activities.

Once the DOL publishes a proposed rule in the Federal Register, there will be time designated for the public comment. Subsequently, the agency will review comments and determine whether to move forward with a final rule.

Even after the DOL publishes the proposed overtime rule, it will likely be some time before this rule becomes final, if ever. Employers are not obligated to change how they classify or pay employees until the DOL’s proposed rule becomes final. However, potentially impacted employers will want to follow the DOL’s rule-making process closely.

We will keep you apprised of any notable updates.

State Compliance Update

Colorado Adopts Final Wage Payment Notice Requirement


On June 3, 2022, Colorado adopted Senate Bill (SB) 161. Among other things, SB 161 requires employers to provide notice of wage deductions within 10 days of termination. This section of SB 161 becomes effective January 1, 2023.

Notice Requirements

SB 161 requires employers to provide notice before deducting from an employee’s final wages or compensation any amount of money or property the employee failed to return or repay upon the termination of employment. 

Employers must provide notice of final wage payment deductions within 10 days of termination. The notice must include: 

  • A written account specifying the amount of money or the specific property the employee failed to pay or return;
  • The replacement value of the property; and
  • To the extent known, the time when the money or property was provided to the employee and when the employer believes the employee should have paid the money or returned the property to the employer.

SB 161 also requires employers to pay the deducted amount within 14 days if employees repay the money or return the property within 14 days of receiving the notice.

Penalties for Unpaid Wages

SB 161 imposes penalties of up to twice the amount of the unpaid wages or $1,000 on an employer that fails to pay all past-due wages, whichever is greater. 

Penalties increase to three times the amount of unpaid wages or $3,000 for a willful refusal to pay or violation. Employers with a second or subsequent violation within a five-year period may be found to have willfully refused to pay wages as required by law.

Family and Medical Leave Act Insurance (FAMLI)

Most Colorado employers will be required to comply with the Family and Medical Leave Act Insurance (FAMLI) effective January 1, 2023.  For the proposed rules for FAMLI as of July 28, 2022, click here.

Type of benefit: Paid family and medical leave with partial wage replacement funded through employer and employee payroll taxes and administered by a state agency. Leave is job-protected for workers with 180 days’ employment with their current employer. 

Eligible employees: Workers are eligible if they perform labor or services for the benefit of another, and if they have earned at least $2,500 during the first four of the last five completed calendar quarters before the benefit year.

Paid leave duration: Workers may take up to 12 weeks of leave per year, or 16 weeks for a serious health condition related to pregnancy or childbirth complications.

Paid leave benefits: 90% of the worker’s weekly wage that is 50% of the state average weekly wage (SAWW). 50% of any portion of the weekly wage higher than 50% of the SAWW. Benefits are capped at 90% of the SAWW and (for leave beginning before Jan. 1, 2025) at a weekly benefit amount of $1,100.

Program funding: Funding is split evenly between employers and employees, although employers with fewer than 10 employees are exempt from contributing, and employers may pay part or all of the employee’s share. Beginning Jan. 1, 2023, all employers must remit premiums to the state, in the total amount of 0.9% of the employee’s wages. The employee portion may be collected as a wage deduction. Starting in 2025, the premium rate will be set by the Division of Family and Medical Leave Insurance, at up to 1.2% of employee wages. The amount of wages subject to premium assessment is capped at the maximum subject to social security tax.

Benefit administration: The program will be administered by a newly created state Division of Family and Medical Leave Insurance.

Compliance Calendar


8/1 – Form 5500 Deadline (calendar year plans)

8/1 – Form 941 Filing Deadline (second quarter)

8/1 – PCORI Fee Deadline

8/1 – VETS-4212 Filing Open (federal contractors)


9/30 – VETS-4212 Filing Deadline (federal contractors)


10/14 – Medicare Part D Creditable/Noncreditable Coverage Notice

10/30 – Form 941 Filing Deadline (third quarter)


Lighthouse HR Support (LHRS) provides practical human resource information and guidance based upon our knowledge and experience in the industry and with our clients. LHRS services are not intended to be a substitute for legal advice. LHRS services are designed to provide general information to human resources and/or business professionals regarding human resource concerns commonly encountered. Given the changing nature of federal, state and local legislation and the changing nature of court decisions, LHRS cannot and will not guarantee that the information is completely current or accurate. LHRS services do not include or constitute legal, business, international, regulatory, insurance, tax or financial advice. Use of our services, whether by phone, email or in person shall indicate your acceptance of this knowledge.

Written By:

Kelly Murphy

Kelly Murphy

Senior HR Business Partner

Kelly brings a wealth of knowledge with nearly 30 years of human resource experience. She provides expertise in various human resource categories, including employee relations, performance management, HR Form creation/review (employee handbooks, job descriptions, etc.), employee/management training, workplace investigations, etc. Her human resource certifications include PHR (Professional Human Resources) and SHRM-PC (Society for Human Resource Management Certified Professional). 

Kelly attended Colorado Mesa University and Waldorf University, where she earned a degree in Human Resource Management and Business Administration with Summa Cum Laude honors. She was named Western Colorado Human Resource Association Professional of the Year, 2013, and currently serves on the Board of Directors. She also is a member of the WCHRA Skills Development Committee, the WCCA Education Committee, and the Members/Events Committee. She serves as an Ambassador for both the Fruita and Palisade Chamber of Commerce.