SPECIAL BULLETIN – for Colorado Employers (Human Resources)

Provided by Employer Representatives Inc.   www.erius.biz

The Colorado Department of Labor and Employment (CDLE) made significant revisions to the existing Minimum Wage Order #35 and it affects the majority of Colorado private employers. Most of these changes take effect March 16, 2020 and we want to ensure Colorado employers are ready.

The following serves as a summary of the changes employers must prepare for. We encourage all employers to read the final rule (click this link to read the final rule COMPS #36).
Employers: The definition of covered employers expanded to virtually all private employers, including the manufacturing, oil and gas, and construction industries.

Time Worked: Defined as all time for which the employer requires or permits the employee to work that requires over one minute to perform the task. For instance, if an employer permits an hourly employee to check their email off campus, this time must be recorded and compensated. In addition, if an employee is required to wear work clothes or gear that may not be worn outside of work, the employee is compensated for the time to change clothes.

These are just a few examples of newly defined compensable time requirements.

Rest Periods: In the past, employers must provide a 10-minute rest period for employees working more than four (4) hours at a time for each four (4) hour segment. Now, the employer must permit and authorize this action or compensate the employee for the time they worked. For example, if a laborer is not permitted and authorized to take a 10-minute break in a four (4) hour shift due to the demands of the job, the employer must compensate the employee 10 minutes for every 10-minute break not permitted. Therefore, in a regular eight (8) hour day, the employer will owe the employee 20 minutes if they do not permit the employee to take the break.

An employee and employer may enter a written agreement for up to one year that they may take two (2) 5-minute breaks in lieu of the single 10-minute break as long as this allows the employee time to use the restroom and/or use a “bona fide” break area. Additionally, some modified break scenarios may be applied to employees governed by a collective bargaining agreement.
Travel Time: The new rule clarifies that when an employee spends time on travel for the benefit of the employer, they shall be compensated for this time. Specifically, the rule states “normal home to work travel” may be excluded. For example, if a worker drives from their home to the Grand Junction plant, it is considered normal home to work travel if the Grand Junction plant is their “home base”. However, if they must travel from the Grand Junction plant to the Glenwood plant, this time is compensable as travel time.

Credits Toward Minimum Wages: The rule clarifies what deductions an employer may deduct from the employee’s paycheck:

• Lodging Credit. A lodging credit for housing furnished by the employer and used by the employee may be considered part of the minimum wage if it is:

(A) no greater than the smaller of
           (1) the reasonable and actual cost to the employer of providing the            housing,
           (2) the fair market value of the housing, or
           (3) $25 per week for a room (in a shared residence, dormitory, or hotel) or $100 per week for a private residence (an apartment or a house);

(B) accepted voluntarily and without coercion, and primarily for the benefit or convenience of the employee, rather than of the employer; and

(C) recorded in a written agreement (electronic form is acceptable) that states the fact and amount of the credit (but need not be a lease).

Meal Credit. A meal credit, equal to the reasonable cost or fair market value of meals provided to the employee, may be used as part of the minimum hourly wage. No profits to the employer may be included in the reasonable cost or fair market value of such meals furnished. Employee acceptance of a meal must be voluntary and un-coerced.

Uniforms: Historically, an employer may require a reasonable security deposit to ensure the employee would return the uniform if they left the company. Now, employers are prohibited from collecting such deposit.

Posting Requirements: Employers must display the COMPS Order poster in an area frequented by employees and where it may be easily read or (much like the existing labor poster requirements). If the employer does not have such a location, they must provide a copy of the COMPS poster (or the order itself) to all employees within the first month of employment and any time an employee requests a copy.

In addition, the COMPS Order must be included in any employee handbook, manual, or policy that is published or distributed to the employees. If the employer requires the employees to sign for the employee handbook, manual, or policy, the must also require the employees to sign an acknowledgement for the COMPS order.

Further, employers must provide the COMPS Order in a language other than English for employees with limited English language abilities.

Recording Requirements: Employers are required to keep the employee’s itemized earnings statements for at least three (3) years and “for the duration of any pending wage claim pertaining to the employee.”
Tracking Requirements: With the added burden of tracking the employee’s 10-minute break time, additional compensable time (when required or permitted to work), and the clarification as to what constitutes travel time,
it is more important than ever for employers to track, record, and ensure accurate compensation for hourly employees.

Employers must remember that the Colorado Failure to Pay Wages Bill (House Bill 19-1267) that went into effect January 1, 2020, makes wage discrepancies a criminal offense.

In addition, effective July 1, 2020, Colorado adopts new requirements for exempt status in addition to the federal Fair Labor Standards Act (FLSA). While many of the categories mirror the federal requirements, Colorado did modify several widely used categories, such as (this is not an all-inclusive list):

• Executive (or supervisors): “who supervises the work of at least two full-time employees and has the authority to hire and fire, or to effectively recommend such action. The employee must spend a
minimum of 50% of the workweek in duties directly related to supervision.” For example, if a superintendent does not spend a minimum of 50% of their time supervising the employees, they may not qualify for this exemption.

• Administrative: “who directly serves the executive and regularly performs duties important to the decision-making process of the executive.” For example, if an administrative assistant does not directly serve the executive of the company and does not make decisions important to/for the executive, they may not qualify for this exemption.
• Owners or proprietors: “This exemption covers a full-time employee actively engaged in management of the employer who either:
o      (A) owns at least a bona fide 20% equity interest in the employer; or
o      (B) for a non-profit employer, is the highest-ranked and highest-paid employee, and is paid at least the salary threshold in Rule 2.5.”

Further, these exemptions come with a new price tag as well. While the thresholds mirror the FLSA wage requirements in 2020, starting January 1, 2021, they deviate from the federal standard.

Beginning 2021, the minimum salary threshold for an exempt employee increases as follows:
• 1/1/21: $778.15 per week/$40,500.00 per year
• 1/1/22: $865.38 per week/$45,500.00 per year
• 1/1/23: $961.54 per week/$50,000.00 per year
• 1/1/24: $1,057.69 per week/$55,000.00 per year
• 1/1/25: minimum salary threshold may adjust based on the Consumer Price Index (CPI) currently used to determine minimum wage in Colorado.

Employer Representatives Inc. (ERI) provides practical human resources information and guidance based upon our knowledge and experience in the industry and with our clients. ERI services are not intended to be a substitute for legal advice. ERI services are designed to provide general information to human resources and/or business professionals regarding human resources concerns commonly encountered. Given the changing nature of federal, state and local legislation and the changing nature of court decisions, ERI cannot and will not guarantee that the information is completely current or accurate. ERI services do not include or constitute legal, business, international, regulatory, insurance, tax or financial advice. Use of our services, whether by phone, email or in person shall indicate your acceptance of this knowledge.

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