Colorado Department of Labor and Employment Adopts New Language for Wage and Hour Rules

New Wage and Hour Rules in Colorado

The Colorado Department of Labor and Employment (CDLE) has adopted the Colorado Overtime and Minimum Pay Standards (COMPS) Order #38 and new Wage Protection Rules as well as the 2022 Publication and Yearly Calculation of Adjusted Labor Compensation (PAY CALC) Order, which became effective January 1, 2022. Below is a summary of notable changes in the new rules.

Adopted Revisions for COMPS Order #38

• Overtime Regular Rate Calculation for an Employee Working Two or More Non-exempt Jobs: The regular rate for an employee working more than one non-exempt job at different hourly rates is now calculated according to either a weighted average based on adding together all the wages earned while performing each job divided by the number of hours worked in those jobs, or as a rate based on the job “actually performed during overtime hours.” In addition, when there is no previous agreement about regular rate for employees in the position, the regular rate is calculated using the weighted average method.
• Highly Compensated Employees and Other Exemptions: The COMPS Order includes a new exemption from the minimum wage and overtime rules for highly compensated employees. The exemption applies to employees who meet three criteria. First, the employee’s annual wage must be, at least weekly, the weekly salary for white-collar exempt employees as provided in the 2022 PAY CALC Order and, annually, at least 2.25 times the rounded annual salary for the white-collar exempt employees established in the 2022 PAY CALC Order. Second, the employee must customarily perform at least one of the exempt duties for the white-collar exempt roles. Third, the employee’s primary duty must be office or non-manual work. COMPS Order #38 also includes exemptions from the minimum wage and overtime rules for National Western Stock Show employees and, from the overtime rules, for direct support and care employees.
• 2022 PAY CALC Order: The salary threshold information for certain exempt employees, including for white-collar exempt employees, is located in the 2022 Pay CALC Order as are the statewide minimum wage requirements. The minimum wage for 2022 is $12.56/hour, and tipped employees must be paid an hourly wage of $9.54.
• Unpaid Rest Period Time: The updated language to this rule explains that Rule 5.2.4 applies to all required rest period time that is not provided to an employee. Rule 5.2.4 states that failure to allow an employee to take their 10-minute paid rest break effectively extends their shift by an unpaid 10 minutes, and the employer is required to pay the employee for the unpaid time worked. This change clarifies that the rule applies to all rest breaks regardless of duration.
• Posting Requirements: The new COMPS Order clarifies that every employer must post (or provide a copy of) a COMPS Order poster for the current year, and employers are not compliant if they try to reduce the effect of the posters or notices required by the COMPS Order (“such as by communicating positions contrary to, or discouraging the exercise of rights covered in,” such posters or notices). The rule states that the physical posting requirement is not necessary “if the work site or other conditions make a physical posting impractical” in which case, the employer must provide all new hires a copy of the current COMPS Order and provide a copy of the same to all employees upon request.
• Agricultural Labor Rights and Responsibilities Act: The COMPS Order includes language relating to the enforcement of the Agricultural Labor Rights and Responsibilities Act, passed in June 2021, throughout its provisions, and specifically under Rule 2.3. The majority of the changes between the proposed COMPS Order language and the adopted language is related to agricultural employees.
  

Adopted Revisions to the Wage Protection Rules

• Vacation Pay: Under the new rules, the definition of “Vacation Pay” includes “pay for leave, regardless of its label, that is usable at the employee’s discretion…rather than leave usable only upon occurrence of a qualifying event (for example, a medical need, caretaking requirement, bereavement or holiday).” This rule brings PTO policies squarely within the CDLE’s purview by significantly expanding the definition of vacation pay. As such, employees will not be required to forfeit PTO either at year-end under a use-it-or-lose it policy or at separation.
• Signatures: The new rules clarify that a complaint or other submission is considered signed if the document has an ink signature or another kind of electronic signature like a scanned signature or typed name entered by the party in the signature area.
  
• Pay rate and amount of HFWA leave: The pay rate under the Healthy Families and Workplaces Act (HFWA) is now calculated using the same rules as the employee’s “regular rate” under the COMPS Order except that bonuses are not included, the weighted average must be used for employees with multiple hourly rates (but the rate is calculated over 30 days), and the HFWA regular rate is measured over the span of 30 calendar days (or the longest period otherwise worked if the employee hasn’t worked 30 days) before the employee takes leave.
  
  In addition, the rules include guidance related to calculating the pay rate for indeterminate shifts (i.e., a shift that ends based on business needs instead of a certain number of hours worked). When this occurs, an employer can determine the number of hours of paid leave used by the employee based on the “hours actually worked by a replacement employee” or, if there isn’t a replacement, by the “number of hours actually worked by the employee” during their previous most similar shift. Further, “[o]n-call employees” are allowed to use paid leave for the hours they are “scheduled to work,” including hours the employer “actually requests” the employee work and hours that qualify as “time worked” under the COMPS Order but does not include time that the employee was asked to be available unless otherwise provided for by agreement.
• Employer Records of Accrued and Used Paid Leave Hours under the HFWA: Employers are now required to produce documents showing paid leave that the employee has available to use and leave the employee has already used, including leave under C.R.S. § 8-13.3-403 and supplemental public health emergency leave.
• Collective Bargaining Agreements: Collective Bargaining Agreements provide “equivalent or more generous paid sick leave” where they meet the requirements under Rule 3.5.4(A) and do not limit employee protections related to accrual and carryover, use and conditions, and protection and effectuation of paid sick leave rights.

The CDLE also proposed changes to the Colorado Whistleblower, Anti-Retaliation, Non-Interference, and Notice-Giving (WARNING) Rules. The final WARNING Rules, which are anticipated to be become effective in early 2022 but a definitive effective date has not been determined, have not yet been adopted. A summary of the proposed changes can be found below. In addition, a new Colorado Paid Leave and Whistleblower Poster became effective January 1, 2022.

Proposed Revisions to the WARNING Rules

• Definitions: The proposed changes will revise and extend several definitions provided in the WARNING Rules. For example, the revised rules will expand the definition of “Complainant” to include “whistleblower, key service provider, or other protected party with a Complaint or Claim.” The changes also amend the definitions of “Employee” and “Employer” to include agricultural employers and employees. In addition, the proposed revisions provide new definitions of “Protected Activity,” “Retaliation,” and “Interference” in Rule 2.11. These definitions will also include examples of Retaliation and Interference such as using the assertion of a protected right under the WARNING rules as a “negative factor” in any employment action for Retaliation or imposing stricter conditions upon the exercise of the right than provided by statute for Interference.
• Agricultural Labor Rights and Responsibilities Act: The rules will include language relating to the enforcement of the Agricultural Labor Rights and Responsibilities Act throughout the rules but specifically under rule 2.17 and 4.2.2.
• Deadlines: The rules will extend the time the CDLE has to assess whether it will investigate a Complaint and inform the Complainant of the decision to investigate or issue a Right to Sue from 30 days to 90. In addition, Rule 3.3.3 will clarify that a Complaint is received when the Complaint “has provided all the information and documents needed to process the Complaint, as requested in the Division Complaint form or by a Division investigator.”

The CDLE also proposed the Agricultural Labor Conditions Rules, which, if adopted, become effective May 1, 2022. Employers should review the adopted rules and proposed revisions to ensure compliance if and when they become effective in 2022.