The Colorado Department of Labor and Employment’s Division of Labor Standards and Statistics (the Division) recently adopted Colorado Overtime and Minimum Pay Standards Order # 36 (COMPS), which will take effect on March 16, 2020.[1] COMPS will replace the Colorado Minimum Wage Order, which had largely remained substantively unchanged for two decades. With the adoption of COMPS, the Division seeks to broadly expand Colorado’s wage-and-hour regulations, limit the reach of exemptions, and require more complete and accurate payment for all time worked.

The Division spent most of 2019 conducting extensive workplace, economic, and legal research and began an eight month pre-rulemaking comment period on March 6, 2019. Over 1,300 people submitted comments. The commenters spanned nearly all industries and regions in Colorado, including workers, employers, public officials, unions, policy analysts, and advocates for both labor and employers. Given the number of comments received, the deadline to submit comments was extended. The Division’s policy team met repeatedly over five months, making modifications to COMPS before adopting it.

As adopted, COMPS will make three significant changes to Colorado’s wage-and-hour regulations:

  • COMPS dramatically expands the coverage of previous minimum wage orders to presumptively embrace all employees and all industries, unless specifically exempted. This broadened scope marks a major departure from the four narrowly defined industries that were previously covered.
  • COMPS progressively raises the minimum salary required for exempt employees, such as administrative workers, and executives or supervisors. The minimum salary will be phased in over the next four and a half years as follows:
    • $35,568 from July 1, 2020 to December 31, 2020
    • $40,500 from January 1, 2021 to December 31, 2021
    • $45,000 from January 1, 2022 to December 31, 2022
    • $50,000 from January 1, 2023 to December 31, 2023
    • $55,000 from January 1, 2024 to December 31, 2024

Every January 1 after 2024, the minimum salary will be adjusted using the same Consumer Price Index metrics that annually adjust the Colorado minimum wage.

  • COMPS expressly disallows the de minimis defense and clarifies that any activity that is reasonably expected to take one minute or more must be compensated.

Additionally, COMPS makes technical changes to the following: (i) certain exemption requirements; (ii) the rules regarding rest periods; (iii) credits towards minimum wages; and (iv) posting and distribution requirements. For example, COMPS grants flexibility for required 10-minute rest periods to now be taken as two five-minute breaks.

We will continue to monitor developments and provide updates regarding COMPS as additional information becomes available. In the meantime, if you have any questions or concerns regarding whether your pay practices and policies comply with COMPS, please do not hesitate to reach out to the authors of this post or any member of Reed Smith’s Labor & Employment Group.

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[1] Adopted Rule: Colorado Overtime & Minimum Pay Standards (COMPS) Order #36, Colorado Department of Labor and Employment, https://www.colorado.gov/pacific/cdle/adopted-rule-colorado-overtime-minimum-pay-standards-comps-order-36 (last visited February 12, 2020).