Compliance Snapshot:

  • Employers should determine whether COMPS Order #37 applies, and if so, to which employees;
  • Employers must display a poster version of the new COMPS Order #37 (or ensure employees receive a copy within the first month of employment);
  • Employers must distribute a copy of COMPS Order #37 or the official poster to their employees and must provide a translated version to employees with limited English proficiency;

The Colorado Department of Labor and Employment’s Division of Labor Standards Statistics (the Department) adopted the Colorado Overtime and Minimum Pay Standards (COMPS) Order #37, replacing COMPS Order #36. According to the Department, the COMPS Order is the source of key wage rights and responsibilities, including eligibility for minimum wage; overtime pay for work over 40 hours a week or 12 hours a day; meal and rest breaks; rules on wage deductions; and rules on what work time must be paid. We previously wrote about the significant changes brought by COMPS Order #36, aspects of which are now clarified and expanded via COMPS Order #37. This article reviews the key changes effective January 1, 2021.

Who is a Covered Employer?

These wage and hour rules apply to all employers in Colorado in any industry who meet the definition of employer under the Fair Labor Standards Act (“FLSA”). The FLSA defines “employer” broadly, as “any person acting directly or indirectly in the interest of an employer in relation to an employee.”

Who is a Covered Employee?

COMPS Order #37 applies to all Colorado workers in the private sector unless a specific exemption applies (as outlined in section 2.2 of the COMPS Order) and based on the type of work they perform.

Changes to Colorado Minimum Wage Order Effective January 1, 2021:

  • COMPS Order #37 implements the increased minimum wage and white-collar exemption minimum salary thresholds from COMPS Order #36. Effective January 1, 2021, the Colorado minimum wage will increase to $12.32 per hour for nonexempt employees;
  • The minimum salary threshold for exemptions requiring a salary (such as for administrative, executive, and professional employees) will increase to $778.85 per week ($40,500.20 per year);
  • COMPS Order #37 clarifies that for the purposes of the administrative employee exemption (see section 2.2.1 of the COMPS Order), the employee only needs to serve an executive to qualify, but must regularly exercise independent judgement and discretion;
  • The professional employee exemption now more closely tracks the same exemption under the FLSA;
  • There is no longer an exemption for interstate transportation workers and instead COMPS #37 adopted a new partial exemption that closely tracks the Federal Motor Carrier Act;
  • COMPS #37 defines wages or compensation to include paid sick leave under the Healthy Families and Workplaces Act (“HFWA”);
    • For more information about the HFWA, please visit our blog post.

What are the Posting and Notice Distribution Requirements?

There is a notice posting requirement that must be located in an “area frequented by employees where they may be easily read during the workday.” The Department has released an official poster that satisfies this requirement. If a physical posting is impractical (for example, if employees work from home, or the work site lacks a break room), the employer must provide a copy of the COMPS Order #37 or poster to each employee within the first month of employment. It must also be made available upon request.

Employers that distribute “any handbook, manual, or written or posted policies” to their employees must also distribute a copy of either the COMPS #37 Order or poster. If an employer requires employees to sign an acknowledgment of receiving any materials mentioned above, the employer must also require a signed acknowledgement that employees were provided a copy of the COMPS Order #37 or poster.

In sum, employers should be aware of the changes above and are encouraged to review their current wage and hour practices and work with counsel to ensure legal compliance with changes under COMPS Order #37 as well as any other applicable other federal or local laws.

Additional Resources

Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2021 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved

Lizet Ramirez – Lizet is a Client Compliance Manager for Sequoia One, where she works with our clients to optimize and streamline benefits compliance. In her free time, Lizet enjoys live music, travel, hiking and spa days.