Colorado Wage & Hour Changes

The Colorado Department of Labor and Employment recently adopted the Colorado Overtime and Minimum Pay Standards Order #36 (COMPS Order).  This collection of wage and hour changes relate to employee coverage, minimum exempt salary threshold, and expanded break rights. The new laws will go into effect on March 16, 2020.

Below is a summary of the significant changes and how employers should prepare.

Employee Coverage

Previously, the state’s wage and hour laws only applied to employees working in a few specific industries: (1) retail and service; (2) food and beverage; (3) commercial support service; and (4) health and medical industries. After March 16th, the changes will apply to most, if not all, workers in Colorado..

However, worker and industry-specific exemptions will continue and will include certain administrative employees, professional employees, salespersons, and workers in the agricultural industry. A full list of exemptions can be found under COMPS Order Rule 2.2 through Rule 2.4.

Exempt Employees Minimum Salary Threshold

Currently, the federal salary threshold for salaried, exempt employees is $35,568. This threshold will remain in effect through December 2020. It will increase for Colorado employers on January 1, 2021 – to $40,500 – and will continue to incrementally increase through January 1, 2024, and plateau at $55,000. Thereafter, the threshold will adjust annually for inflation.

There are only two exceptions for the 2020 salary threshold: (1) non-profit employers with annual total gross revenue of under $50 million; and (2) for-profit employers with annual total gross revenue of under $1 million.

Colorado employers must pay the higher of the state or federal thresholds in order to retain their employees’ overtime exemptions.

Expanded Break Rights

Colorado has also implemented new rest period requirements. In addition to the existing requirements and expressly stating how and when employers can divide up 10-minute rest periods, the Order clarifies that the following schedule applies for granting rest periods:

Work Hours Rest Periods Required
2 or Fewer 0
Over 2 and up to 6 1
Over 6 and up to 10 2
Over 10 and up to 14 3
Over 14 and up to 18 4
Over 18 and up to 22 5
Over 22 6