COMPS Order #37 Brings More Changes

November 30, 2020

Early this year, COMPS Order #36 made substantial changes in Colorado wage law. (See my article below, posted 5/20/2020.) While not nearly as dramatic, COMPS Order #37, which becomes effective January 1, 2021, does include some important changes. This article summarizes the key changes.

Transportation Worker Exemption

A new rule in COMPS Order #37 (Rule 2.4.6) provides that drivers and driver’s helpers who are subject to the Federal Motor Carrier Act (MCA) are exempt from Colorado’s overtime and rest and meal period requirements while and to the extent that they are:

1. working on MCA-covered non-passenger vehicles, or on MCA-covered passenger vehicles qualifying as “commercial motor vehicles” requiring a “commercial driver’s license” (as those terms are defined in the federal regulations) and;

2. paid compensation equivalent to at least 50 hours at Colorado's minimum wage with overtime, regardless of whether the pay is hourly, salaried, piece rate, or on another basis.

This new rule significantly expands the exemption for motor carrier employees. Under COMPS Order #36, the exemption applied only to workers who actually crossed state lines in the course of their employment; but under COMPS Order #37, drivers and driver’s helpers do not have to cross state lines to be exempt. Although very helpful to Colorado businesses that employ transportation workers, the new rule is still more restrictive than federal law. For example, the federal exemption also applies to loaders and mechanics, but the Colorado exemption does not. Furthermore, Colorado law imposes a higher minimum pay standard than does federal law.

Administrative Employee Exemption

Under COMPS Order #36, the administrative employee exemption (Rule 2.2.1) applies to “a salaried employee, paid at least the applicable salary in Rule 2.5, who directly serves the executive….” In COMPS Order #37 that sentence is revised to read “who serves an executive” (rather than “the” executive).

In its Statement of Basis, Purpose, Specific Statutory Authority, and Findings, the CDLE explains that it has received inquiries “indicating a belief and/or concern that by exempting only an employee ‘who directly serves the executive,’ Rule 2.2.1 might be interpreted as exempting (A) only those serving a CEO, owner, or other top-level official who is ‘the’ executive of an employer, and (B) only those who serve that top-level executive ‘directly.’” The change was made because the CDLE does not intend for the provision to be interpreted that narrowly.

Professional Employee Exemption

The federal Fair Labor Standards Act (FLSA) has long recognized two types of professional exemptions: the “Learned Professional Exemption” and the “Creative Professional Exemption.” In COMPS Order #37, the professional exemption (Rule 2.2.3) has been revised to include creative professionals. The exemption is similar to the FLSA exemption.

Minimum Wage and Salary Thresholds

Effective January 1, 2021, the state minimum wage will increase to $12.32 an hour. The minimum direct wage for tipped employees will increase to $9.30 an hour. The maximum tip credit ($3.02) will not change.

The salary threshold for exempt employees will increase from $684.00 per week ($35,568 per year) to $778.85 per week ($40,500 per year). Employees in highly technical computer-related occupations must be paid at least $778.85 per week or $28.38 an hour.

COMPS Order #37 is here. For those who are interested, the Statement of Basis, Purpose, Specific Statutory Authority, and Findings can be found here.