Colorado Rejects Codifying a Joint Employer Definition
By Aaron Chaet
On May 25, 2020, the Colorado Department of Labor and Employment (“CDLE”) issued the final Colorado Overtime and Minimum Pay Standards Order (“COMPS Order”) #36.FN1 The COMPS Order is notable because it removed a proposed definition and detailed framework for “joint employment” which was first included in an emergency measure in its April 15, 2020 proposal.FN2 The purpose of the proposed definition was to resurrect the definition provided by the U.S. Department of Labor’s Wage & Hour Division in 2016, which has had been removed by the current administration’s revised Final Rule on Joint Employer Status.FN3
The proposed definition in the April 15, 2020 COMPS Order #36 for joint employment provided, in part, that an employee’s hours can be aggregated to determine wage and hour obligations that each employer is jointly and severally liable for wage compliance.FN4 The definition also provided a non-exhaustive list of factors to determine joint employment, which included but was not limited to: (1) the potential joint employer’s power to control and supervise the worker; (2) the potential joint employer’s power to set pay or other employment terms or conditions; and (3) the extent to which work is integral to the business of the potential joint employer.FN5 It also permitted the evaluation of “economic dependence of the worker and the nature of the work.
After a public hearing and short public comment period in early May, the CDLE ultimately rejected the joint employment definition and framework and did not include it in the recently published COMPS Order #36.FN6 Consequently, in Colorado, joint employment will be determined under the current U.S. Department of Labor’s Final Rule on Joint Employer Status, which adopted a four-factor balancing test.FN7
Takeaway
Although Colorado has not codified “joint employment” in its COMPS Order #36, employers should still be aware that they may liable as a joint employers under the U.S. Department’s Final Rule on Joint Employer Status. Please contact the attorneys at Campbell Litigation, P.C. for guidance regarding joint employment liabilities.
Footnotes:
FN1: Colorado Minimum Wage Order No. 36, 7 CCR 1103-1, see https://www.colorado.gov/pacific/sites/default/files/7%20CCR%201103-1%20ADOPTED%20COMPS%20Order%20%2336_Clean_0.pdf.
FN2: Proposed Colorado Minimum Wage Order No. 36, 7 CCR 1103-1, April 15, 2020, see https://www.colorado.gov/pacific/sites/default/files/7%20CCR%201103-1%20COMPS%20Order%20%2336_Redlined_0.pdf
FN3: Joint Employer Status under the Fair Labor Standards Act, 29 CFR 791, 85 FR 2820, see https://www.federalregister.gov/documents/2020/01/16/2019-28343/joint-employer-status-under-the-fair-labor-standards-act
FN4: Proposed Colorado Minimum Wage Order No. 36, 7 CCR 1103-1, April 15, 2020, see https://www.colorado.gov/pacific/sites/default/files/7%20CCR%201103-1%20COMPS%20Order%20%2336_Redlined_0.pdf
FN5: Id.
FN6: Colorado Minimum Wage Order No. 36, 7 CCR 1103-1, see https://www.colorado.gov/pacific/sites/default/files/7%20CCR%201103-1%20ADOPTED%20COMPS%20Order%20%2336_Clean_0.pdf.
FN7: Whether the potential joint employer is directly or indirectly controlling the employee, assessing whether the potential joint employer:
• hires or fires the employee;
• supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
• determines the employee’s rate and method of payment; and
• maintains the employee’s employment records.
See 29 C.F.R. § 791.2.