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Changes to Overtime Threshold Proposed

We need your feedback on a critical policy issue impacting Colorado employers and employees. Last month, the Colorado Department of Labor and Employment announced a proposed update to the Minimum Wage Order. This order outlines important information for Colorado employers and employees, including who is covered by minimum wage, the threshold for paying overtime and requirements for meal and rest breaks.

The rule is reviewed annually, but this year, we want to make sure you are aware of some big changes. The Minimum Wage Order #35 will be replaced by the Colorado Overtime and Minimum Pay Standards Order (COMPS Order) #36.

There are two key changes in the COMPS Order we want your feedback on. First, the COMPS Order will expand those who are covered by the order. Historically, there were four broad categories of covered employees:

  1. Retail and Service
  2. Food and Beverage
  3. Commercial Support Service
  4. Health and Medical

The revised rule expands the order to cover all employees and then spells out specific exemptions. To read the exemptions, see pages 3-4 of the full order. We want to know if the changes in who is covered overlooks past exemptions that might have unintended consequences.

The second change – an increase in the overtime threshold – has really caught our attention. On January 1, 2020, Colorado’s overtime threshold will be $35,308 a year. That means any full-time employee who makes less than $35,308 annually must be paid overtime for any time over 12 hours in a day or 40 hours in a week. Under the newly proposed rule, the threshold would increase to $42,500 on July 1, 2020, and then by $3,000 each year until 2026 when it will be $57,500 a year.

This rate places Colorado significantly higher than the federal level, and we fear this could threaten the flexibility that many Chamber members are able to provide to their employees. This one-size-fits-all approach doesn’t take into account variations in our economy across the state, additional meaningful benefits like health insurance and retirement programs, or seasonal fluctuations in hours. A number of industries share this seasonal cyclical nature – from nonprofits in a heavy grant-making season to seasonal construction jobs.

We also recognize that with less flexibility, employers may not be able to provide employees with learning and professional growth opportunities because they can’t afford the overtime. These opportunities could be special projects that are on a deadline or big events that teammates often aspire to work on for the experience.

We worry that the overtime threshold could be particularly damaging to businesses in rural Colorado where unemployment is higher and average wages are lower.

It’s not clear to us the rationale for this specific increase, so we’re working to better understand how the level was determined and have proposed we work to develop a methodology that is fair to everybody and predictable.

The Chamber wants to ensure your specific issues are part of our message, so we are seeking more insight into how these changes affect you. Please let us know by filling out this very short survey.

We’re proud to represent you and appreciate your attention to this update. At the end of the day, we all want to do right by our employees. We care deeply about their success and the success of our organizations – we know with your feedback we can help find the right solution this time as well.

Kelly Brough is the president and CEO of the Denver Metro Chamber.