Colorado Wage and Hour Update: Denver Minimum Wage Increased on Very Short Notice, with Major Changes in Colorado Wage and Hour Law Expected in 2020
Colorado employers face major changes in wage and hour requirements in 2020, as the Denver City Council has approved an increase Denver’s minimum wage to $12.85 an hour, effective January 1, 2020, and the Colorado Department of Labor and Employment (CDLE) has issued a proposed rule expanding coverage of Colorado’s minimum wage requirements.
Denver’s Minimum Wage Increased Above Statewide Rate
Denver’s City Council has unanimously approved a minimum wage hike that makes Denver the first Colorado city to set a rate above the state minimum wage.FN1 Under the ordinance, Denver’s minimum hourly wage increases to $12.85 on January 1, 2020 ($0.85 above the 2020 state minimum wage), $14.77 on January 1, 2021, and $15.87 on January 1, 2022.
CDLE Proposes Expansion of State Minimum Wage and Salary Thresholds for Exemptions
The CDLE has announced significant proposed changes to state minimum wage and overtime rules. Some of these changes are described below.FN2
1. Expansion of covered employees: Under the current the current wage order, only four industries are covered by Colorado’s minimum wage requirements—retail and service, food and beverage, commercial support service, and health and medical—and employees in many industries, including construction, generally are not covered. Under the CDLE’s proposal, the minimum wage requirements will cover all workers unless specifically excluded under exceptions for administrative employees, outside salespersons, and agricultural workers, among others.FN3
2. Increased Salary Threshold for Overtime-Exempt Employees: Employees who perform certain duties, including those in administrative, executive, professional, and outside salesperson roles, are exempt from overtime and break requirements under Colorado law. Colorado presently does not have its own salary threshold for such exemptions. However, the proposed rule increases the minimum salary threshold for exempt employees to $42,500.00 starting on January 1, 2020 (more than $7,500.00 more than the threshold under federal law), and increases $3,000.00 annually, until reaching $57,500.00 in 2026.FN4
The proposed rule also adds an exemption for full-time employees actively engaged in management who either (a) own at least 20% equity interest in the employer; or (b) for non-profit employers, are the highest-ranked and highest-paid employee and meet the salary threshold exemption.
3. Wage Poster Updates: The proposed rule modernizes the minimum wage posting requirement in three ways:
i. First, if the work site makes centralized posting impractical (such as a mobile or online workforce), then employers must provide a copy of the Colorado Overtime & Minimum Page Standard Order (COMPS Order) or poster to each employee directly within his or her first month of employment.FN5
ii. Second, employers who distribute employee handbooks, manuals, and/or policies to its workers must include a copy of the COMPS Order or poster; and
iii. Lastly, employers with employees with limited English skills must use and provide a Spanish-language version of the COMPS Order and poster, and/or ask the CDLE for a poster in any other language needed.
Although these are merely proposed rules, we expect the CDLE will make them final in large part after a comment period. A public hearing on the CDLE’s proposed rules is set for December 16, 2019 and the deadline to comment is December 31, 2019. The CDLE expects to adopt a final rule in early January 2020 and effective dates shortly thereafter. We will keep you posted.
Footnotes:
FN1: See Minimum Wage Increase for Denver Workers Adopted, Mayor’s Office (November 25, 2019), https://www.denvergov.org/content/denvergov/en/mayors-office/newsroom/2019/minimum-wage-increase-for-denver-workers-adopted.html. After 2022, Consumer Price Index-based adjustments will be made on an annual basis. As discussed in a previous blog, Colorado’s minimum wage is increasing to $12.00 an hour effective January 1, 2020.
FN2: Colorado Overtime & Minimum Pay Standards Order (COMPS Order) #36, 7 CCR 1103-1, (proposed 2020), https://www.colorado.gov/pacific/sites/default/files/7%20CCR%201103-1%20Colorado%20Overtime%20%26%20Minimum%20Pay%20Standards%20Order%20%28COMPS%29.pdf. The public hearing is set for December 16, 2019; the deadline to comment on the proposed rule is December 31, 2019; and the adoption of the final rule is set for January 10, 2020.
FN3: COMPS Order #36 §§ 2.1, 2.2.
FN4: COMPS Order #36 § 2.5.
FN5: COMPS Order #36 § 7.4.