Significant New Changes to Colorado’s Overtime, Minimum Wage Rules Proposed for 2020

December 4, 2019 Advisory

The Colorado Department of Labor and Employment has proposed significant changes to overtime and minimum pay standards to take effect on March 1, 2020. The new exempt salary threshold would become effective on July 1, 2020. The Colorado Overtime and Minimum Pay Standards (COMPS) Order #36 would replace Minimum Wage Order #35 and expand coverage and create a new salary threshold for exemption. COMPS Order #36 contains several rules that specify the new requirements:

COMPS Order Coverage. Previous wage protection rules covered only four broad industries (retail and service; food and beverage; commercial support service; and health and medical) and allowed only some employees to receive wage order protection depending on the employee’s duties and line of business. The new rule would create presumptive wage protection coverage for all employees, unless specifically exempted under Rule 2, which identifies numerous exemptions, some of which span all employers of certain types, while others are job-specific.

Salary Thresholds for Exemption. To be exempt from overtime and break requirements under COMPS Order #36, an employee must have exempt duties (e.g. executive/supervisory, professional, etc.) and be paid a salary that meets or exceeds the new salary threshold.  Federal law sets a minimum exempt annual salary of $35,568. Under the Fair Labor Standards Act, states may adopt higher salary exemptions and minimum wage rates. COMPS Rule 2.5 adopts a six-year phase-in minimum salary for exemptions. As previously noted, the new exempt salary threshold of $42,500 would take effect on July 1, 2020. After 2021, the minimum salary would rise by $3,000 per year until reaching $57,500 in 2026, at which time it would adjust annually in accordance with the Consumer Price Index.

COMPS Order #36 only applies to employees with exempt duties (e.g. executive/supervisory, professional, etc.). The rule parallels the federal wage law in requiring no minimum salary for doctors, lawyers and teachers. Employers may choose how to comply by electing to:

  1. pay the exemption salary;
  2. instead pay an employee hourly with overtime at any rate at or above the Colorado minimum wage; or
  3. shift hours among employees to minimize overtime hours.

Clarification of How Federal, State and Local Wage Laws Apply. COMPS Rule 3.2 clarifies that an employer must pay the greater of whatever federal, state or local wage rules apply. For example, if Boulder has a higher minimum wage than COMPS Order #36 (2020—$12 per hour/$8.98 for tipped employees), then the employer that has employees in Boulder must pay those employees the higher minimum wage rate.

Rest Periods. COMPS Rule 5.2 provides:

  1. “to the extent practicable,” rest periods shall be provided in the middle of each four-hour work period, because a rest period at the start or end of a shift fails to serve its purpose; and
  2. an employee who is not allowed a 10-minute paid rest period is owed 10 minutes’ pay. 

Deductions, Credits and Charges. COMPS Rule 6.2 allows employers to reduce wages by taking a “credit” for providing meals or lodging, but modifies previous rules as follows:

  1. accepting a meal (which must be provided at cost or value, without added profits) must be voluntary for the employee, which eliminates the previous requirement that a meal must be consumed before deductions are permitted; and
  2. credit is allowed for lodging that is voluntary for the employee, not primarily for the employer’s own convenience, appropriately documented, and no greater than the smaller of
    1. the employer’s cost,
    2. the fair market value, or
    3. $25 per week for a room in a shared residence, dorm or hotel, or $100 for a private apartment or house.

Rule 6.3 no longer allows employers to require a “deposit” as “security” for a required uniform.

Overtime Pay Calculation When Pay is Not Hourly. COMPS Rule 1.7 clarifies how to calculate regular and overtime pay rates for non-exempt workers with non-hourly pay, and allows a fluctuating workweek calculation where the hourly rate may vary each week by dividing the weekly salary by the number of hours the employee worked that week. The calculation is permissible as long as the employee is actually paid the required overtime in addition to the weekly salary. For non-exempt employees denied overtime, the hourly rate equals the weekly salary, divided by 40 (the number of hours that were compensated if the employee was not paid any of the required overtime pay).

More Transparency and Language Inclusiveness in Wage Poster Rules. Employers are required to display a wage order poster. COMPS Rule 7.4 modifies the requirement in three ways:

  1. If an employer distributes a handbook or policies to employees, it should include a copy of the COMPS Order or poster. If the work site or other conditions make a physical posting impractical, the employer can instead provide a copy of the COMPS Order or poster to each employee.
  2. Employers that have employees with limited English skills should post a Spanish poster the Division will provide, or the employer can ask the Division for a translation in any other language.
  3. An employer that fails to post as required is ineligible for any employee-specific credits or exemptions.

Armstrong Teasdale’s Employment and Labor practice routinely guides employers in their efforts to comply with the broad landscape of wage and hour laws and will issue additional alerts as the Colorado minimum pay and overtime rules continue to evolve.

Contact Us
  • Worldwide
  • Boston, MA
  • Denver, CO
  • Dublin, Ireland
  • Edwardsville, IL
  • Jefferson City, MO
  • Kansas City, MO
  • Las Vegas, NV
  • London, England
  • Miami, FL
  • New York, NY
  • Orange County, CA
  • Philadelphia, PA
  • Princeton, NJ
  • Salt Lake City, UT
  • St. Louis, MO
  • Washington, D.C.
  • Wilmington, DE
abstract image of world map
Boston, MA
800 Boylston St.
30th Floor
Boston, MA 02199
Google Maps
Boston, Massachusetts
Denver, CO
4643 S. Ulster St.
Suite 800
Denver, CO 80237
Google Maps
Denver, Colorado
Dublin, Ireland
Fitzwilliam Hall, Fitzwilliam Place
Dublin 2, Ireland
Google Maps
Edwardsville, IL
115 N. Second St.
Edwardsville, IL 62025
Google Maps
Edwardsville, Illinois
Jefferson City, MO
101 E. High St.
First Floor
Jefferson City, MO 65101
Google Maps
Jefferson City, Missouri
Kansas City, MO
2345 Grand Blvd.
Suite 1500
Kansas City, MO 64108
Google Maps
Kansas City, Missouri
Las Vegas, NV
7160 Rafael Rivera Way
Suite 320
Las Vegas, NV 89113
Google Maps
Las Vegas, Nevada
London, England
Royal College of Surgeons of England
38-43 Lincoln’s Inn Fields
London, WC2A 3PE
Google Maps
Miami, FL
355 Alhambra Circle
Suite 1250
Coral Gables, FL 33134
Google Maps
Photo of Miami, Florida
New York, NY
7 Times Square, 44th Floor
New York, NY 10036
Google Maps
New York City skyline
Orange County, CA
19800 MacArthur Boulevard
Suite 300
Irvine, CA 92612
Google Maps
Philadelphia, PA
2005 Market Street
29th Floor, One Commerce Square
Philadelphia, PA 19103
Google Maps
Philadelphia, Pennsylvania
Princeton, NJ
100 Overlook Center
Second Floor
Princeton, NJ 08540
Google Maps
Princeton, New Jersey
Salt Lake City, UT
222 South Main St.
Suite 1830
Salt Lake City, UT 84101
Google Maps
Salt Lake City, Utah
St. Louis, MO
7700 Forsyth Blvd.
Suite 1800
St. Louis, MO 63105
Google Maps
St. Louis, Missouri
Washington, D.C.
1050 Connecticut Avenue NW
Suite 500
Washington, DC 20036
Google Maps
Photo of Washington, D.C. with the Capitol in the foreground and Washington Monument in the background.
Wilmington, DE
1007 North Market Street
Wilmington, DE 19801
Google Maps
Wilmington, Delaware