Significant Changes to Colorado Minimum Wage Order Proposed by Colorado Department of Labor

December 5, 2019

By: Colin A. Walker

The Colorado Department of Labor and Employment has proposed changes to the Colorado Minimum Wage Order which would substantially change a number of key wage/hour regulations. For many years, the Colorado Minimum Wage Order has regulated minimum wage in Colorado as well as other workplace issues, such as break periods and overtime. Each year, the Department has issued a new numbered Minimum Wage order (the latest was Minimum Wage Order #35), which made changes to the previous order. In recent years, these changes have been relatively insignificant, such as incremental changes in the amount of the minimum wage. The Department is now proposing significant changes.  

The first is a name change. The order would now be called the “COMPS” Order (Colorado Overtime & Minimum Pay Standards Order). The Department felt that the name “Minimum Wage Order” gave the incorrect impression that the order only governed minimum wage when in fact, it regulated many workplace issues.  

The Department also proposes to expand the coverage of the order. Previously, it applied only to four specific industries: (1) Retail and Service, (2) Food and Beverage, (3) Commercial Support Services, and (4) Health and Medical. The COMPS Order would presumptively cover all industries with certain exceptions. Numerous exceptions are specified in the rule, some of which apply to certain employer types and other to specific positions. 

The new COMPS Order would also add a salary threshold for exemptions from the minimum wage and overtime requirements of the Order, similar to the federal salary threshold under the FLSA and federal regulations, which have become so controversial in recent years. The Obama Administration proposed to raise the threshold to approximately $47,476. That rule, however, was overturned by a federal court and, rather than appeal the ruling, the Trump Administration chose to adopt a much lower threshold, $35,568.  Previously, the Minimum Wage Orders did not impose a salary threshold for Colorado exemptions (though the federal threshold applied to those employers subject to the FLSA). The new COMPS Order would impose a salary threshold for Colorado exempt employees of $42,500, which would increase by $3,000 per year until reaching $57,500 in 2026. Thereafter, it would be adjusted annually by the Consumer Price Index (“CPI”).  

The COMPS order would add new exemptions which track federal law, such as an exemption for owners of businesses. It would also add others not present under federal law, such as exemptions for high-ranking officers of non-profit companies.  

Other less significant changes have also been proposed. A full discussion of all of the changes are beyond the scope of this article but more information can be found here

A public hearing with be held on Monday, December 16, 2019. The comment deadline is December 31, 2019. Adoption of the final rule will occur on Friday, January 10, 2020, and the effective date will be March 1, 2020.