Big Changes to Colorado Wage and Hour Regulations

Colorado Overtime and Minimum Pay Standards Order (COMPS Order) #36 became effective on March 16. It replaces last year’s order, Colorado Minimum Wage Order Number 35. You may have noticed that the title of the wage order has changed. The new title is only the beginning. COMPS Order #36 heralds some significant revisions to Colorado wage and hour law.

As you probably know, the wage order issued each year by the Colorado Department of Labor and Employment (CDLE) notifies employers, workers, and the public of the state minimum wage. It also addresses overtime exemptions, meal and rest periods, and other aspects of state wage and hour law. While COMPS Order #36 marks several changes to Colorado wage and hour law, I will mention only some of the major changes.

Until this year, Colorado’s wage order applied to only four industries: Retail and Service; Commercial Support Service; Food and Beverage and; Health and Medical. COMPS Order #36 covers “all employers and employees for work performed within Colorado,” subject to the limited exceptions described in the order. Consequently, if your company was not covered by previous versions of the wage order, it is almost certainly covered by COMPS Order #36.

Under COMPS Order #36, the exemptions from overtime regulations are similar to the federal exemptions, but there are some differences. For example, Colorado’s exemption for “executives or supervisors” differs from the federal exemption for executives in several ways. A key difference is that COMPS Order #36 requires that the employee “spend a minimum of 50% of the workweek in duties directly related to supervision.”

Under both federal and Colorado law, exempt employees must be paid a salary, rather than an hourly wage, and the salary must meet a prescribed minimum. The federal minimum was recently increased to $684 per week (substantially less than the Obama administration had proposed). Under Colorado law the minimum for 2020 is also $684 per week; however, it will increase each year and, therefore, will probably be higher than the federally-required minimum for the foreseeable future. COMPS Order #36 spells out the increases.

Bear in mind that the federal Fair Labor Standards Act provides that, if a state’s wage and hour laws conflict with federal law, the employer is required to comply with the law that is most beneficial for the worker. Therefore, in Colorado, non-exempt employees must be paid the state minimum hourly wage and exempt employees must be paid a salary equal to the state minimum requirement.

On a related matter, in 2019 the Colorado General Assembly repealed the law prohibiting local minimum wage ordinances, and the governor signed the bill. Although the new law includes some restrictions, local jurisdictions in Colorado are now permitted to enact local minimum wage rates. Denver promptly passed a minimum wage ordinance establishing a minimum wage higher than the state minimum wage. Employers need to be aware of any local minimum wage rates that apply to their employees.

You can access COMPS Order #36 here.

You can access the workplace poster here.