New Year, New Laws: What Colorado Employers Need to Know

Ah, the new year: a time for celebration, overly-optimistic resolutions and a plethora of new laws, regulations and legal challenges. Starting soon, new and revised labor and employment laws will take effect for Colorado employers that have the potential to cause significant disruption. Employers need to be aware of major updates and potential changes coming to wage and hour regulations, local minimum wages and vacation policies.

Statewide Wage and Hour Regulations

The Colorado Department of Labor and Employment (CDLE) has planned revisions to many of the regulations concerning the state’s wage and hour laws. These proposed changes can be found in what the CDLE is calling the Colorado Overtime & Minimum Pay Standards (COMPS) Order. The two most significant updates are:

• Whereas previously Colorado wage and hour law only applied to employees working in four specific industries  ̶  retail and service, food and beverage, commercial support service and the health and medical industries  ̶  starting March 1, 2020, state wage and hour laws will now presumptively apply to all workers in all industries. Like before, there will continue to be a series of worker and industry-specific exemptions.
• Starting July 1, 2020, the minimum salary certain white-collar employees must earn to avoid being eligible for overtime is $42,500. This is an increase from the current 2019 minimum of $26,600. The $42,500 figure will increase by $2,500 each year until 2026 when the salary threshold reaches $57,500. Each year after 2026, the salary limit will be adjusted to track the consumer price index.

However, the COMPS Order also:

• Exempts owners of a business and proprietors of a nonprofit, while removing an exemption for companions and other domestic workers;
• Modifies exemptions for “interstate drivers, driver helpers and loaders or mechanics of motor carriers” as well as for taxi drivers, student resident workers, property managers and patient workers in institutional laundries, and those in highly technical computer occupations;
• Clarifies that localities may set higher wage and hour law standards than the state or federal government;
• States that employees who do not receive their regularly scheduled, paid 10-minute rest break must receive an additional 10 minutes’ worth of compensation;
• Modifies the rules surrounding meal and lodging credits;
• Prohibits employers from requiring a security deposit from employees for their uniforms;
• Clarifies how to calculate regular and overtime pay rates for non-exempt workers with non-hourly pay;
• Defines reprisal in conformance with retaliation and obstruction statutes;
• States that employee handbooks must include a copy of the COMPS Order or the COMPS Order poster explaining workers’ rights and remedies. Moreover, if employees sign a handbook acknowledgment, they must also sign an acknowledgment stating they received either the COMPS Order or the COMPS Order poster;
• Employers must provide a copy of the poster to each employee if the employer’s workplace makes physical posting of the information impractical;
• Instructs employers with Spanish-speaking employees to display a Spanish version of the COMPS Order poster. If an employer has employees who do not speak English or Spanish, then the employer must contact the CDLE and request a copy of the COMPS Order poster in the employees’ spoken language; and
• Prohibits employers from claiming any employee-specific credits or exemptions if the employer has not displayed or distributed the COMPS Order poster.

Although these updates are not technically finalized and binding, the CDLE is on track to finalize (perhaps with minor revisions) by Jan. 10, 2020. Once completed, all changes will become effective March 1, 2020, except for the salary threshold, which will become effective July 1, 2020. As you can imagine, these sweeping revisions will impact nearly every employer doing business in Colorado.

Denver Minimum Wage

Starting Janu. 1, 2020, employers in Denver were required to pay their employees a minimum wage of $12.85 per hour. That is $0.85 higher than the new statewide minimum wage of $12.00 per hour. Because a new law now allows local governments to establish minimum wages that are higher than the state’s, employers in other jurisdictions should keep an eye out for changes to their local minimum wages.

Potential Changes to Vacation Policies

The law surrounding the permissibility of “use it or lose it” vacation policies is currently in flux. Earlier this year, the Colorado Court of Appeals ruled that in certain circumstances, earned but unused vacation could be forfeited. The CDLE disagrees with that ruling, however, and has issued updated regulations stating that, in most situations, earned but unused vacation must be paid out to an employee upon separation of employment. To add uncertainly, the Court of Appeals decision is now pending before the Colorado Supreme Court. The takeaway for employers is that you should review your vacation policies with an attorney to ensure they are well written and recognize that further policy changes may soon be necessary.  

David Roth, an attorney in the Fisher Phillips Denver office, helps employers of all sizes and from many industries with the entire spectrum of labor and employment matters. He can be reached at [email protected].