Last week, the Colorado Department of Labor and Employment (CDLE) adopted its final rules for the Colorado Overtime & Minimum Pay Standards (COMPS). These are rules that cover overtime pay, exempt employee status and meal and break times.
While Colorado has always followed the federal standards (which increased on Jan. 1, 2020, to $35,568, from the previous level of $23,660), the new state rule adopts a different overtime threshold for the state of Colorado.
Under the rule, the threshold going forward will increase to:
- $40,500 on Jan. 1, 2021
- $45,000 on Jan. 1, 2022
- $50,000 on Jan. 1, 2023
- $55,000 on Jan. 1, 2024
- Starting in 2025, it will be adjusted by the same consumer price index as the Colorado minimum wage each year on Jan. 1.
This means employees, regardless of their level of authority or autonomy, making less than the salary listed above must be paid overtime for time worked over 40 hours in a workweek or 12 hours in a workday. To be exempt from earning overtime, an employee must earn more than the salary minimum threshold AND meet specific criteria:
- The employee is an administrative employee who directly serves an executive.
- The employee is an executive.
- The employee is a supervisor who supervises at least two full-time employees.
- The employee is a professional working in a knowledge-based field like law, education or medicine.
- Additionally, other employees are exempt if they are outside salespeople, certain commissioned employees, some members of the ski industry or bona-fide volunteers.
You can read the full list of exemptions here.
For employers, we must re-examine who is exempt and non-exempt on our teams and ensure they are categorized appropriately based on this rule. Further, for those who don’t meet the exempt criteria, we need to track hours and pay overtime to those employees.
You’ll recall that when we learned of the proposed changes to this rule late last year, we shared several concerns with the Colorado Department of Labor and Employment (CDLE) through meetings, public comment and testimony. While we continue to be concerned about the level of salary threshold, we were successful in advocating for a delay in increasing the overtime threshold, which was initially proposed to increase this July.
It’s estimated this new rule will impact as many as a quarter of a million workers in Colorado. We think it will be challenging to manage these changes, especially in rural Colorado, as they remove flexibility for employees and employers. We shared our perspective recently with The Colorado Sun.
While the overtime threshold doesn’t increase until Jan. 1, 2021, the rule goes into effect on March 16, 2020, so employers will need to ensure they continue to align with all other components of the rule (which largely remains unchanged from prior years). That includes things like providing a 30-minute meal for any shift that exceeds five hours and providing a 10-minute rest period for each four hours of work in a shift.
Policy Update: Paid Family and Medical Leave
Proponents of paid family and medical leave have filed two measures with the Colorado Legislative Council, beginning an effort to put an initiative on the November ballot should a paid leave policy not pass this legislative session.
Read more coverage of this issue in the Denver Business Journal, The Denver Post, Colorado Public Radio and Fox 31.
While the Chamber strongly supports employers providing paid leave, a $2 billion tax increase to fund a state startup is the most inefficient, risky and ineffective way to do it. A state-run program that mandates a one-size-fits-all approach for our smallest businesses up to our largest corporations isn’t the answer. We want to ensure more Coloradans have access to leave, but in a manner that assures it’s there when they need it most. A bill has not been presented yet, but we are continuing discussions with legislators working on this issue and will update you on that progress.
Things are moving fast this legislative session, and you can keep up with how we’re working for you at the Capitol in our policy newsletter.
Kelly Brough is the president and CEO of the Chamber.