Colorado Overtime and Minimum Pay Updates

At a Glance

• Colorado Department of Labor and Employment announced changes to the Colorado Overtime and Minimum Pay Standards Order.
• Effective dates vary
• Updates to Salary Thresholds, Overtime requirements, and Meal & Rest Break requirements
• Provides clarifications on compensable time worked, pre & post time and splitting rest periods
• Applies to all industries except those on the exclusions list
• *UPDATE 03/18/2020: the COMPS 36 order includes additional overtime exemptions, changes to employer wage statement requirements, and additional clarification on the “Joint Employment” standard effective March 16, 2020.

On Wednesday, January 22, 2020, the Colorado Department of Labor and Employment replaced the Colorado Minimum Wage Order #35 and updated to the Colorado Overtime and Minimum Pay Standards Order (“COMPS Order”) #36. The new rules will go into effect on March 16, 2020 with the Salary Threshold Requirements going into effect on July 1, 2020.

UPDATE 03/18/2020: Partially due to the Corona Virus, Effective March 16, 2020, the Colorado Department of Labor and Employment has updated the COMPS order with additional exemption for direct care/support “companions” who are Medicaid funded and work shifts of 24 hours or longer. Additionally, employer obligations as to what information must be in wage statements issued every pay period has been reduced (modified Rules 7.2-7.3). The “joint employment” standard has not changed under Colorado wage and hour law, despite the federal change to “joint employment” standard (modified Rule 1.6).

Employee Coverage 

Employers in all industries will need to review the updated COMPS Order as the new update will cover all employees, unless specifically excluded. Previously, the law only applied to employees within the Retail, Food & Beverage, Health & Medical, and Commercial Support Services.

UPDATE 03/18/2020: “Joint Employment” shall be defined under the Colorado Wage and Hour law based on the FLSA regulations (CFR 791.2 Labor Subtitle B, Chapter 5) that were in effect as of May 16, 2016 when H.B. 19-1267 was enacted by the state of Colorado.

Wage Statement

UPDATE 03/18/2020: An itemized earning/wage statement must be provided each pay period, effective March 16, 2020. The statement must include:

• The employee name
• The employer name
• Regular rate(s) of pay
• Record of credits claimed and tips
• Total hours worked in the pay period
• Gross wages earned
• Withholdings made
• Net amounts paid

Salary Thresholds 

The new minimum salary threshold for exempt employees in Colorado will rise to $35,568 (which is the same as the current exempt salary threshold under federal law). See below for timeline of thresholds.

 Note: For any employer that is not subject to the $684 per week salary for all or part of 2020, the required salary is the equivalent of the Colorado $12.00 minimum wage for all hours worked in a workweek.

The industries that are specifically excluded from the new Overtime requirements are; certain salespersons or mechanics, commission sales, ski industry, medical transportation employees, and healthcare employees whom follow the eight and eighty rule.

Overtime Requirements 

Employees should be paid time and half their regular rate of pay for any work more than forty hours a week, 12-hours in a workday, or 12 consecutive hours without regard to start and end time.

Note: The requirement to pay overtime for work in excess of 12 consecutive hours will not alter the employee's established workday or workweek, as previously defined.

The specific professions that are excluded from the Salary Threshold requirements are; doctors, lawyers, teachers whom qualify as professional employees, and employees in a highly technical computer related field.

UPDATE 03/18/2020: An additional exemption has been made for those with direct care or direct support “companions” who are funded by Medicaid or other governmental sources (at least 75% of total revenue) and who work shifts of 24 hours or longer, and provide services within Medicaid home and community based services waivers. These workers are not subject to the 12-hour overtime rule. This is effective March 16, 2020.

Meal and Rest Breaks 

Employees are entitled to an uninterrupted and duty-free meal period of at least a 30-minute duration when the shift exceeds five consecutive hours. Employees must be completely relieved of all duties and permitted to pursue personal activities for a period in order for their meal period to qualify as non-work, uncompensated time. If circumstances make an uninterrupted meal period impractical, the employee shall be permitted to have an on-duty meal while performing work related activities. Employees must permitted to fully consume a meal of choice on the job and be fully compensated for the on-duty meal period without any loss of time or compensation.

Every employer must allow a compensated 10-minute rest period for each 4 hours of work, or major fractions thereof, for all employees, as follows:

Next Steps 

Employers should review their pay structures and overtime requirements to ensure they are in line with COMPS Order #36. Should you have questions regarding calculation of overtime within our systems, please contact your Account Manager.

For more information, please click here. 

Thank you for choosing Paylocity as your Payroll Tax and HCM partner. 

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.