The Weekly Guide to Employment Law Developments

The Rocky Mountain Employer

Labor & Employment Law Updates

Colorado Enacts New Salary Threshold for Employees Exempt from Overtime

By Alison Lungstrum MacNeill

The Colorado Department of Labor and Employment (“CDLE”) adopted its final rules for the Colorado Overtime & Minimum Pay Standards Order #36 (“COMPS Order”), which covers overtime pay, exempt employee status, and meal and break times.FN1 While Colorado previously followed the federal standards setting the minimum salary a worker must make to be exempt from overtime requirements (which increased on January 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 moving forward.

Under the new increasing threshold in the COMPS Order, employees, regardless of their level of authority or autonomy, must be paid overtime for time worked over 40 hours in a workweek or 12 hours in a workday if they make less than the following salariesFN2:

• $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 January 1.

The COMPS Order now also covers all industries unless specifically excluded, rather than the four previous categories of retail and service, food and beverage, commercial support service, and health and medical. As such, the pool of workers covered by the COMPS Order’s various wage rights and responsibilities, including rest and meal breaks, is expanded.

Takeaway

Employers should review their employee classifications to determine whether employees are properly categorized as exempt or non-exempt based on this rule and ensure that they are accurately tracking hours and overtime pay for non-exempt employees. Please contact Campbell Litigation, P.C. with questions and for assistance with this review.

Footnotes:

FN1 - 7 CCR 1103-1 (2020) (replacing Minimum Wage Order #35 (2019)).

FN2 – To be exempt from earning overtime, an employee must earn more than the salary minimum threshold and must also fall under one or more of the following exemption (1) an administrative employee who directly serves an executive; (2) an executive; (3) a supervisor who supervises at least two full-time employees; and/or (4) a professional working in a knowledge-based field like law, education or medicine. There are additional exemptions for employees who are outside salespeople, certain commissioned employees, some members of the ski industry or bona-fide volunteers. For a full list of exemptions, see https://www.colorado.gov/pacific/sites/default/files/7%20CCR%201103-1%20Adopted%20COMPS%2036%20Clean.pdf?utm_source=Denver+Metro+Chamber+of+Commerce&utm_campaign=93d2cc8a26-EMAIL_CAMPAIGN_2020_01_16_06_00_COPY_01&utm_medium=email&utm_term=0_6a7a81ce1f-93d2cc8a26-264179733.