Second Regular Session Seventieth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 16-0232.02 Bart Miller x2173 HOUSE BILL 16-1154 HOUSE SPONSORSHIP DelGrosso, SENATE SPONSORSHIP (None), House Committees Senate Committees Local Government A BILL FOR AN ACT Concerning clarification of the construction of the definition of "employer" dealing with the employer-employee relationship to include a requirement that an employer must exert a level of control over an employee, and, in connection therewith, providing that a franchisor is not an employer of a franchisee or a franchisee's employees. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The bill clarifies that the definition of "employer" only includes a person that possesses authority to control an employee's terms and conditions of employment and actually exercises that authority directly. The bill specifies that a franchisor is not considered an employer of a franchisee's employees unless a court finds that a franchisor exercises a type or degree of control over the franchisee or the franchisee's employees not customarily exercised by a franchisor for the purpose of protecting the franchisor's trademarks and brand. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 8-1-101, add (7) (c) as follows: 8-1-101. Definitions. As used in this article, unless the context otherwise requires: (7) (c) Except as specifically provided in this subsection (7), nothing in this subsection (7) creates an employment relationship between an employer and an employee unless the employer possesses authority to control the employee's terms and conditions of employment and actually exercises that authority directly. SECTION 2. In Colorado Revised Statutes, add 8-1-101.5 as follows: 8-1-101.5. Franchisors not employers - franchisee employees. (1) In this title, "franchisee" and "franchisor" have the meanings assigned by 16 CFR 436.1. (2) For purposes of this title, a franchisor is not an employer of: (a) A franchisee; or (b) A franchisee's employees. (3) With respect to a specific claim for relief under this title made by a franchisee or a franchisee's employee, this section does not apply to a franchisor who is found by a court of competent jurisdiction in this state to have exercised a type or degree of control over the franchisee or the franchisee's employees not customarily exercised by a franchisor for the purpose of protecting the franchisor's trademarks and brand. SECTION 3. In Colorado Revised Statutes, 8-3-104, add (11) (g) as follows: 8-3-104. Definitions. As used in this article, unless the context otherwise requires: (11) (g) Except as specifically provided in this subsection (11), nothing in this subsection (11) creates an employment relationship between an employer and an employee unless the employer possesses authority to control the employee's terms and conditions of employment and actually exercises that authority directly. SECTION 4. In Colorado Revised Statutes, 8-4-101, amend (6) as follows: 8-4-101. Definitions. As used in this article, unless the context otherwise requires: (6) (a) "Employer" means every person, firm, partnership, association, corporation, migratory field labor contractor or crew leader, receiver, or other officer of court in Colorado, and any agent or officer thereof, of the above mentioned classes, employing any person in Colorado; except that the provisions of this article shall not apply to the state or its agencies or entities, counties, cities and counties, municipal corporations, quasi-municipal corporations, school districts, and irrigation, reservoir, or drainage conservation companies or districts organized and existing under the laws of Colorado. (b) Except as specifically provided in this subsection (6), nothing in this subsection (6) creates an employment relationship between an employer and an employee unless the employer possesses authority to control the employee's terms and conditions of employment and actually exercises that authority directly. SECTION 5. In Colorado Revised Statutes, 8-5-101, amend (5) as follows: 8-5-101. Definitions. As used in this article, unless the context otherwise requires: (5) (a) "Employer" means the state and every county, city, town, and body corporate and politic therein and every person, corporation, partnership, and association, including those operating in a representative capacity. (b) Except as specifically provided in this subsection (5), nothing in this subsection (5) creates an employment relationship between an employer and an employee unless the employer possesses authority to control the employee's terms and conditions of employment and actually exercises that authority directly. SECTION 6. In Colorado Revised Statutes, 8-13.5-103, amend (1) as follows: 8-13.5-103. Definitions. As used in this article, unless the context otherwise requires: (1) (a) "Employer" means a person engaged in business who has one or more employees. "Employer" includes the state and any political subdivision of the state. (b) Except as specifically provided in this subsection (1), nothing in this subsection (1) creates an employment relationship between an employer and an employee unless the employer possesses authority to control the employee's terms and conditions of employment and actually exercises that authority directly. SECTION 7. In Colorado Revised Statutes, 8-40-201, amend (7) as follows: 8-40-201. Definitions. As used in articles 40 to 47 of this title, unless the context otherwise requires: (7) "Employer" has the meaning set forth in section 8-40-203 and the scope of such term is set forth in section 8-40-302. Except as specifically provided in this subsection (7) and sections 8-40-203 and 8-40-302, nothing in this subsection (7) or section 8-40-203 or 8-40-302 creates an employment relationship between an employer and an employee unless the employer possesses authority to control the employee's terms and conditions of employment and actually exercises that authority directly. SECTION 8. In Colorado Revised Statutes, 8-70-103, amend (9) as follows: 8-70-103. Definitions. As used in articles 70 to 82 of this title, unless the context otherwise requires: (9) "Employer" has the meaning set forth in section 8-70-113. Except as specifically provided in this subsection (9) and section 8-70-113, nothing in this subsection (9) or section 8-70-113 creates an employment relationship between an employer and an employee unless the employer possesses authority to control the employee's terms and conditions of employment and actually exercises that authority directly. SECTION 9. Act subject to petition - effective date. This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 10, 2016, if adjournment sine die is on May 11, 2016); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2016 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.