Colorado employers that were watching the new federal overtime rule might soon have an even bigger wage-and-hour compliance task — Colorado’s own overtime rule.
The Colorado Department of Labor and Employment seeks to expand the number of employees in the state who are eligible for overtime pay. The CDLE on Nov. 15 published a proposed rule to raise the minimum salary for exempt workers to $42,500 next year. The new threshold, scheduled to take effect July 1, will be higher than the federal overtime ceiling set to rise to $35,568 on Jan. 1.
An estimated 185,000 workers in Colorado would become newly non-exempt, according to the Bell Policy Center.
The proposed rule, known as Colorado Overtime & Minimum Pay Standards Order No. 36, would also make the vast majority of Colorado workers subject to the state’s wage-and-hour regulations, whereas they currently apply to workers in just four industry groups. Management-side employment lawyers say the proposed overtime requirements, assuming they take effect, will have many Colorado employers hurrying to make adjustments to comply by the summer effective date.
Colorado currently lacks its own minimum salary workers must earn to be exempt from overtime, so Colorado employers have defaulted to the federal threshold. Colorado’s wage-and-hour requirements tended to be overlooked in general because they have applied only to certain sectors, said Brooke Colaizzi, an employment lawyer and member at Sherman & Howard in Denver.
“It’s funny how many employers I work with who don’t pay much attention to state wage law … because they’ve never been covered,” Colaizzi said. But now, “all of a sudden,” they’re subject to overtime requirements that exceed the Fair Labor Standards Act, she added.
Previously, Colorado’s wage orders only covered four industries: retail and service; food and beverage; commercial support service; and health and medical. The new wage order would, with some exceptions, cover employees in all industries.