Written by Daniel Crespo

On March 16, 2020, the Colorado Overtime and Minimum Pay Standards Order (COMPS) went into effect and replaced the Colorado Minimum Wage Order (CMWO).[1] For employers, the COMPS Order increases the overtime pay exemption threshold statewide and imposes several new requirements related to break time and the scope of the Order’s applicability, including:

Clarifying that the Order applies to employers in all industries.

Raising the minimum salary required to be exempt from wage protections to $35,568 in July 2020 and gradually adjusting to $55,000 in 2024.

Clarifying certain ambiguous wage rules under CMWO that had generated litigation and confusion for employers and employees.

Expanding overtime pay requirements for employers.

Increasing worker’s access and rights to breaks and down time.

The biggest change brought by COMPS appears to be the expansion of the order’s scope to cover all industries. Although COMPS is significantly broader than the former CMWO it replaces, it is worth noting that partial exemptions will still exist for certain positions and in certain industries. As such, employers will want to take a close look at the regulations and their job duty descriptions to determine whether and to what extent certain partial exemptions to overtime pay may exist, as well as considering the extent to which job duties can be modified or reassigned.

With respect to the heightened exemption salary threshold imposed by COMPS, is worth noting that the new $35,568 threshold for 2020 is identical to the revised federal threshold exemption level that had already gone into effect on January 1, 2020.[2] As such, 2020 is largely a wash in terms of how COMPS will affect employee exemption status since employers should already be in compliance with the federal rule that had gone into effect prior.

The issue to keep an eye on here comes down to COMPS’s provision for annual upward adjustments, ultimately reaching $55,568 by 2024. As such, employers will need to review their payrolls annually to ensure that employees who may have been exempt in 2020 are still exempt in 2021. Planning will be key here to ensure that employers are fully complying with COMPS each year as an increasing number of employees will find themselves in non-exempt roles over the next four years.

In addition, a new Colorado bill  signed into law in May 2019  gave cities and counties permission to set their own minimum wages at or above the state or federal minimum wage levels starting in January 1, 2020, with those new wages taking effect as soon as January 2021.[3]  This far, Denver has increased its minimum wage[4] and prior to the pandemic other cities like Boulder had begun considering increases as well.  Although Boulder in particular has not come to a final decision yet, the city has a stated objective of achieving a living wage for City employees and Lawrence Associates anticipates the city will likely vote to increase its minimum wage above the state minimum in the relatively near future.[5]

Lawrence Associates has been analyzing solutions for employers concerned with how COMPS may affect their businesses, especially as the rule takes effect amid the COVID-19 pandemic. If you have any questions about COMPS and how it might affect your organization, please feel free to contact us for more information.

[1] Colorado Dept. of Labor and Employment, Colorado Overtime and Minimum Wage Standards “COMPS”, Order No. 36, as adopted Jan. 22, 2020,  7 CCR 1103-1 (2020) available at: https://www.colorado.gov/pacific/sites/default/files/Temporary%207%20CCR%201103-1%20COMPS%2036_Clean.pdf

[2] 29 C.F.R 541 (2020) as adopted Sept. 27, 2019 available at: https://www.federalregister.gov/documents/2019/09/27/2019-20353/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and; see also U.S. Dept. of Labor, Fact Sheet #17G: Salary Basis Requirement and the Part 541 Exemptions Under the Fair Labor Standards Act (FLSA), available at: https://www.dol.gov/agencies/whd/fact-sheets/17g-overtime-salary

[3] See Colorado HB 19-1210 (2019) as adopted May 28, 2019, available at: https://leg.colorado.gov/sites/default/files/2019a_1210_signed.pdf

[4] James Leary, “Denver Becomes First Colorado City To Set Its Own Minimum Wage”, CBS, Nov. 28, 2019, available at: https://denver.cbslocal.com/2019/11/28/denver-minimum-wage/

[5] City of Boulder, Human Services, Statement on Living Wage, available at: https://bouldercolorado.gov/community-relations/living-wage