2020 brings big changes in wage and hour law on both federal and state levels.
- Minimum Salary Threshold for Overtime Pay Exemptions is Increasing:
On January 1, 2020, the minimum salary level required for overtime exemption of the Fair Labor Standards Act (“FLSA”) is increased around 30%, to $684 a week / $35, 568 per year for the executive, administrative and professional exemptions. The “2019 Final Rule” supersedes a similar “2016 Final Rule” with an even higher increase, which was ultimately blocked in the court system. The mandatory minimum salary for employees in computer-related occupations is $684 per week while maintaining the alternative hourly rate at $27.63. The new Regulation also increases the minimum salary threshold for the “highly compensated employee” exemption to $107,432 per year with the additional requirement that at least $684 per week / $35,568 per year be paid on a salary or fee basis.
2. Proposed New Colorado Overtime and Minimum Pay Standards (“COMPS Order #36”)
COMPS 36 is a proposed rule from the Colorado Department of Labor and Employment, which is anticipated to be adopted as final by January 10, 2020 and will go into effect March 1, 2020. This new law will set Colorado specific wage rights and responsibilities beyond those provided by federal law.
- Colorado’s Salary Basis Requirement Will Now Be Higher Than The Federal Salary Basis Requirement: Beginning July 1, 2020, the Colorado salary basis test, one of the elements of qualifying for overtime exemption, will be $42,500.00 per year (compared to $35,568 for federal law). The salary threshold would increase $3,000 every year until reaching $57,500 in 2026.
- Expansion of Coverage To New Industries: Colorado’s minimum wage orders have historically covered employees working only in certain, limited industries, however COMPS Order #36 would cover all employees, in all industries, unless specifically excluded. Some changes by occupation include:
- Private Household Companions and Domestic Workers Are Now COVERED: COMP Order #36 removes a previous exemption for companions and domestic workers employed by households or family members performing duties in a private residence. Those workers would no longer be automatically exempt from Colorado’s minimum wage order requirements but may qualify as exempt “independent contractors” and not “employees” as defined.
- Additional Exemptions for Owners and Proprietors:: COMP Order #36 would add two new exemptions: (1) Business Owners defined as managers of a business who own at least a 20% equity interest in a company regardless of salary; and (2)” Proprietors” of non-profit employers defined as the highest ranking and highest paid employee meeting the minimum salary threshold.
- Changes to Meal and Rest Period Requirements.
- Rest periods. To the extent practical, a 10-minute rest period would be required in the middle of each four (4) hour work period or the employee entitled to an additional 10 minutes’ pay.
- Meal Credits. The existing requirement that a meal must actually be consumed before a deduction is allowed would be eliminated so long as the meal is accepted on a voluntary basis.
- Lodging Credits. The dollar limit would be raised to $100 for a lodging credit if voluntary and primarily for the benefit of the employee (and not primarily for the employer’s convenience).
- Uniform Pay Deductions. Would disallow deductions from an employee’s pay as a “deposit” or “security” for a required uniform.
- Notice Requirements.
- Employers must include COMPS Order #36 or its related poster in their policy or handbook distributions.
- Employers must put up a poster (obtained from the CDLE) explaining COMPS Order # 36 or if posting is impractical, a copy of the law must be given to each employee.
- Employers with Spanish-speaking employees must post a Spanish poster.
- Posters in other languages spoken by employees with limited English proficiency should be requested from the Division, which will provide a translation “if feasible.”
- Failure to comply with posting requirements would render an employer ineligible for any employee-specific credits or exemptions.
Please contact PSB Law at 303-442-5111 to learn more about these changes and how they may affect your employment or business.