The Colorado Department of Labor and Employment released the final wage order on overtime pay for Colorado employees yesterday.
The new Colorado Overtime and Minimum Pay Standards Order, which takes effect March 16, offers expanded overtime for Colorado workers. It also offers expanded rights to breaks, designed to better protect public health and extend a greater work-life balance.
The new order includes three significant changes:
- It applies to all industries.
- It raises the minimum salary required to be exempt from overtime wage protections — starting at $35,568 in July 2020, gradually adjusting to $55,000 in 2024 (equal to the proposed $57,500 by 2026), then adjusting for inflation.
- It clarifies ambiguous wage rules that had generated litigation and confusion for employers and employees.
The salary exceptions will be phased in gradually to sync with Colorado’s economy, according to a news release from the Department of Labor.
The order gives employers three options. They can pay (a) the exempt salary or (b) any hourly wage plus overtime; or (c) limit overtime hours. The gradual phase-in, starting at $35,568 in 2020, parallels Colorado’s approach of gradually raising the minimum wage.
Based on input from various specific industries, the order retains partial exemptions for specific jobs that are traditionally exempt or that require added flexibility for employers: for field staff in seasonal camps and outdoor education programs, a reduced salary threshold; for ski workers, exemption from 40-hour weekly overtime pay; and for Medicaid home service workers and agricultural workers, additional rest break flexibility.
The Department of Labor and Employment heard testimony from more than 1,000 workers and employers over a 10-month comment period before promulgating the final rule.
Based on public comments, the department accommodated employers by lowering and slowing the salary phase-in from the proposed $42,500 for 2020-21. The department also accommodated worker requests to reach the full salary level sooner — in 2024 rather than 2026.
Many people testified they felt the previous wage order was unclear in defining which workers are covered and what criteria make an employee exempt from the various protections in the wage order.
The Division of Labor Standards and Statistics has issued a “Statement of Basis, Purpose, Specific Statutory Authority and Findings,” a comprehensive overview of its findings. In addition to providing greater detail, the document outlines foundational research and supporting analysis. It can be accessed here.
For a deeper dive into the new order, see the Jan. 31 edition of the Business Journal.