Colorado Companies need to comply with sweeping new Wage Protection Rules
Recent rule changes, adopted Nov. 10, 2021, include Colorado Overtime and Minimum Pay Standards (COMPS) Order #38 and updated Wage Protection Rules go into effect January 1, 2022. Read the whole rules themselves because there are a lot of important wrinkles in them, but here are some key takeaways for Colorado companies:
Rest and Meal Period Penalties:
Colorado is following California’s footsteps and implementing penalties for Companies that don’t afford their non-exempt employees meal and rest period breaks.If a Colorado employee is not authorized and permitted to take a required 10-minute rest period, they are owed an additional 10 minutes of wages for the missed rest period. COMPS Order #38 clarifies that this “rest period penalty” applies to any required rest period time not provided, including incomplete rest periods, rest periods for employees not earning hourly wages, or rest periods under any other law providing rest periods of different duration. In other words, under this penalty, pay will be due for whatever amount of rest period time was not provided at whatever pay the employee would earn for such time. If Colorado is like California, litigation on this area will soon become very common place.
No 'Use-it-or-Lose-it' Policies for PTO:
Under the Colorado Wage Act, vacation pay is considered wages, and unused vacation pay must be paid to employees upon separation. In recent years, there was some confusion about whether and when an employee’s unused vacation pay could be forfeited. However, this is now clear – once vacation pay is accrued it cannot be forfeited, no matter what your company policy says .
To avoid paying out significant accrued vacation/PTO, employers should impose caps on accrual or consider flexible vacation/PTO policies. Note that nothing in the rules requires employers to offer vacation time. However, once it is accrued, it cannot be taken away.
New Highly Compensated Employee Exemption:
Colorado has a new exemption from minimum wage and overtime rules for highly compensated employees (HCE). The exemption largely tracks the FLSA’s HCE exemption, but there are some differences so read the whole thing for more information. In 2022, the HCE exemption covers an employee who is paid at least $865.38 weekly, and $101,250 annually. The weekly and annual amounts will increase each year.
These changes and the ones beyond the scope of this post are going to make Plaintiff’s law firms in Colorado very happy. Now more than ever, it’s wise to make sure you’ve got good policies in place and you consult with an attorney before you terminate any employees.
