Colorado’s Final Overtime Law, Effective Jul. 1, 2020 (and Other Wage & Hour Changes, Effective Mar. 16, 2020)
On Jan. 22, 2020, the Colorado Department of Labor adopted the final Colorado Overtime and Minimum Pay Standards Order #36 (“COMPS Order”). This newly adopted law makes significant changes for both exempt and non-exempt employees. It will see hundreds of thousands more Colorado workers qualifying for overtime.
Most provisions of this order will become effective Mar. 16, 2020. However, the increased salary thresholds for employees that fall under the “white-collar” exemptions will not take effect until Jul. 1, 2020.
Minimum Salary Threshold Increases – Beginning Jul. 1, 2020
Beginning this July, the minimum exempt salary in Colorado will rise annually. After 2024, the salary level will adjust according to the Consumer Price Index. As a result, the salary level will fall in line with Colorado’s state minimum wage.
Although the Federal Overtime Law recently changed, Colorado employers will need to comply with the new state standards in the recent COMPS Order. This is because the general rule of thumb in employment law is that businesses must comply with the law that gives the most protection for the employee. For the moment Colorado’s minimum exempt salary level and the federal level are the same. But beginning in 2021 they will differ.
The minimum exempt salary level in Colorado is set to increase on the following timeline:
- Jul. 1, 2020 – minimum exempt salary will rise to $684.00 per week ($35,568 per year)
- Jan. 1, 2021 – minimum exempt salary will rise to $778.85 per week ($40,500 per year)
- Jan. 1, 2022 – minimum exempt salary will rise to $865.38 per week ($45,000 per year)
- Jan. 1, 2023 – minimum exempt salary will rise to $961.54 per week ($50,000 per year)
- Jan. 1, 2024 – minimum exempt salary will rise to $1,057.69 per week ($55,000 per year)
- Jan. 1, 2025 – minimum exempt salary will rise to the 2024 salary adjusted by the same Consumer Price Index as the Colorado Minimum Wage
Changes for Non-Exempt Employees – Effective Mar. 16, 2020
Colorado’s prior wage and hour rules applied only to employees in certain industries. These industries include retail/service, food/beverage, commercial support, and health/medicine. Under the new COMPS Order, all employees in Colorado will be covered unless a specific exclusion applies.
Those excluded employees include:
- In-residence workers.
- Interstate transportation workers.
- Owners or proprietors who are full-time employees “actively engaged in managing the business” and own at least a bona fide 20% equity interest in the employer.
- Work-study students.
This expansion means all non-exempt employees will be subject to Colorado’s daily overtime, meal and rest break rules.
Colorado’s overtime rule requires overtime for hours worked in excess of either 12 hours per workday, or 12 consecutive hours regardless of the start and end time of the workday, or 40 hours per workweek.
Colorado’s meal break rule requires a 30-minute uninterrupted break for shifts exceeding 5 hours. To the extent to which it is practical, the break must be taken at least one hour after the shift begins or at least one hour before the shift ends.
Colorado’s rest break rule requires a 10-minute rest period for every 4 hours of work. To the extent to which it is practical, this break must be taken in the middle of each 4 hour work period. However, this is not always possible. Due to this, the COMPS Order adds new components to this rule, allowing for employers and employees to enter into agreements concerning break time. These agreements would clarify that if an employee was not permitted the required 10-minute break for every 4 hours of work, they will receive an additional 10 minutes of compensation.
Requirements for Notifying Your Employees of the Changes
Every employer must display a COMPS Order poster published by the Division of Labor Standards and Statistics. However, if the workplace conditions make physically displaying this poster impractical, employers must distribute it to employees upon hire and make it available to employees upon request.
Employers must also include a copy of the COMPS Order or poster in their employee handbook. If the employer already requests acknowledgment of their handbook or policies, they must also have the employee sign an acknowledgment of having been provided with the COMPS Order or poster.
Further, if an employer has an employee with limited English language abilities, they must provide that employee with a version of the COMPS Order and poster in the appropriate language. If an employer needs a copy of the COMPS Order or poster in a language other than English or Spanish, they may contact the Division of Labor Standards and Statistics to request it.
- “Colorado Overtime and Minimum Pay Standards Order (COMPS ORDER) #36.” Colorado Department of Labor and Employment, 22 January 2020.
- Gunzenhauser, Nancy L., et al. “Colorado Officially Increases the Minimum Salary Threshold for Exempt Employees and Makes Changes for Non-Exempt Employees Too.” The National Law Review, 11 February 2020.
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