Colorado’s New Colorado Overtime and Minimum Pay Standards Order Could Result in Big Changes for Employers

employer resourcesColorado Overtime and Minimum Pay Standards

Effective March 16, 2020, Colorado Overtime and Minimum Pay Standards Order (“COMPS Order”) #36 will go into effect, replacing Colorado Minimum Wage Order #35 and all prior minimum wage orders in Colorado. The COMPS Order sets a new state minimum wage, expands the COMPS Order applicability to all employers, implements new overtime requirements, and places other affirmative requirements on employers. This blog provides a brief overview of some of the big changes with COMPS, but is not intended to be inclusive of all changes or to serve as legal advice. Employers should consult with an employment law attorney to understand how these changes might affect their business.

Scope of Coverage

With certain exceptions specifically set forth in the COMPS Order, the COMPS Order now applies to all employers and employees (whereas previously, Colorado’s minimum wage orders extended only to certain categories of employees). In addition, the COMPS Order sets forth a new, novel test for determining who is an employee for COMPS Order purposes (which arguably may affect certain independent contractor classifications that would otherwise be acceptable classifications under federal law).

The COMPS Order exemptions have been further defined, and as a result, some employees who were exempt under previous minimum wage laws and federal law may no longer qualify for the exemption. Employers should closely examine the new guidance on exemptions (in addition to the new salary requirements) in order to determine whether a certain employee is, or is not, exempt from the Order.

Minimum Wage

The COMPS Order sets the minimum wage for all non-exempt Colorado employees at $12.00/hour. The minimum wage may be reduced by 15% under certain specific legally-qualifying criteria, which should be evaluated on a case-by-case basis.

Overtime

Under the COMPS Order, a non-exempt employee who works over 40 hours per week, 12 hours per workday, or a 12-hour period, regardless of start or end time, must be paid overtime at the rate of time and a half. In addition, non-exempt employees who work five or more consecutive hours must be provided with a 30-minute lunch break. The COMPS Order also mandates that non-exempt employees must be provided with a certain number of 10-minute rest periods depending on the number of consecutive hours worked.

In addition, the COMPS Order changes the definition of compensable time to cover any work which takes longer than one minute, including, but not limited to, putting on or removing required work clothes or gear (but not a uniform worn outside of work as well), receiving or sharing work-related information, security or safety screening, remaining at the place of employment awaiting a decision on job assignment or when to begin work, performing clean-up or other duties “off the clock,” clocking or checking in or out, or waiting for any of the preceding events to occur. Employers will need to closely evaluate how non-exempt employees are recording their time to ensure compliance with this new standard.

Exempt-Employee Salary Threshold

The COMPS Order sets salary thresholds for certain exemptions at $684.00 per week ($35,568 per year), starting July 1, 2020, which shall increase in scale through 2025. Regardless of the other exemption requirements, if an employee does not meet the salary requirements for a given year, they cannot be considered exempt from the COMPS Order coverage. Employers should keep in mind that even if an employee satisfies the exempt salary requirements, they also must meet the multi-part “duties” test to qualify as an exempt employee under federal law.

Additional Requirements

The COMPS Order requires employers to retain records related to employee pay for specific amounts of time. In addition, employers must post the COMPS Order poster and must update their employee handbooks to provide proper notification. Employers should consult with a lawyer to ensure compliance with these requirements.