Rules requiring overtime pay for as many as 100,000 Coloradans who haven’t been paid overtime in the past are about to change, under a proposal from the Polis administration.
The Colorado Department of Labor and Employment published new proposed rules on overtime pay, meal and rest periods on Friday. Those rules, known as Colorado Overtime and Minimum Pay Standards, or COMPS, Order, would cover almost anyone paid less than $42,500 per year and who hasn’t been eligible for overtime for working more than 40 hours per week.
The proposed rules do not apply to employees who have exempt duties, such as executives, supervisors, managers or other professionals, such as doctors, lawyers, teachers, and who are paid "a sufficient salary," according to a fact sheet published Friday by CDLE.
What that looks like: federal law sets a minimum exempt salary at $35,568 but also says that states can adopt higher minimums. The proposed rules sets the minimum in Colorado at $42,500 and raises it by $3,000 per year, beginning in 2021, and by $3,000 per year until it reaches $57,500 in 2026. After that, the minimum would be adjusted by the same Denver-Boulder-Greeley Consumer Price Index that also annually adjusts Colorado's minimum wage.
The proposed rules also apply to more than just the four defined industries listed in previous rules: retail/service, food/beverage, commercial support services; and health/medical. The reason for the change, according to the department, is that previous rules around overtime applied not just to duties but the employer’s industry. For example, a janitor at a retail store was covered, but a janitor for a construction company would not be. That caused confusion, the fact sheet said, and also led to more and costly wage disputes.
So how does an employer calculate overtime pay for a salaried employee, who is at the heart of these rules? The proposal says “employers need not pay employees on an hourly basis. If pay is on a piece rate, salary, commission, or other non-hourly basis, any overtime compensation is based on an hourly regular rate calculated from the employee’s pay” and presumably, based on a 40-hour week.
The proposal, however, exempts agricultural workers if they are exempt from minimum wage provisions of the federal Fair Labor Standards Act, and that has drawn the ire of several groups. including the Colorado Latino Leadership, Advocacy, & Research Organization .
The FLSA exempts workers employed on farms, dairies, ranches and related operations. According to the Colorado Office of Economic Development, about 115,600 are employed in agriculture in Colorado, although that also includes farm and ranch owners and managers.
But by excluding agricultural workers, the proposed rules don’t go far enough, according to CLLARO's Mike Cortés.
In a statement Tuesday, Cortés said farmworkers “are the poorest of the working poor,” and at a time “when labor law protections for most workers are being increased, Colorado government wants to deny protection to the people who need it most,”
Cortés called the exemption “mistreatment” of those workers. The state should not be following the federal government’s “bad example of encouraging employer abuse of farmworkers. Most people never see the people working brutally long and hard hours for poverty-level pay to harvest the food we eat.”
There is a bright side for those ag workers: the proposed rules mandate those workers receive a 10-minute break for every four hours worked, which hasn’t been included in previous rules.
But “failure to cover agricultural workers in the updated wage order exacerbates the problems of a workforce that is frequently left out of labor protections and too often exploited,” according to Zarah Levy, a CLLARO expert on human trafficking.
CLLARO also pointed out that most seasonal agricultural workers are of Mexican descent.
The lack of wage protection for ag workers also was raised by Towards Justice, a nonprofit law firm. Executive Director David Selgiman said they are “deeply troubled” that the proposed rules exempts farmworkers, who he called “the most marginalized and vulnerable workers in our state, and they’ve been historically excluded from many critical protections.” He also called for a faster timeline for the overall implementation, rather than the five years laid out in the proposal.
That was echoed by the Colorado Fiscal Institute. Kathy White said Monday that although the changes were long overdue – it's been at least 20 years since those rules were modified – "many workers will have to wait in order to be eligible due to a five-year phase-in of higher income eligibility for overtime. A quicker phase-in would mean even more workers would benefit from these changes.”
White applauded the modernization of the state's overtime rules. "Hundreds of thousands of workers who would not have been able to qualify for workplace protections such as overtime pay or even being paid the state minimum wage will now be eligible."
Several left-leaning groups also applauded the proposed rules for the good they will do.
A Better Balance, a Colorado-based organization that advocates for workplace fairness, said the proposed rules will help low-income women, single mothers and women of color,, who they said make up a disproportionate share of the low-wage workforce. And Scott Wasserman of the Bell Policy Center said that with so many Coloradans facing "flat wages and rising costs," the CDLE's decision to update the wage order "is a smart move in the right direction."
Business organizations have begun to weigh in on the impact of proposed rules. Tony Gagliardi, state director of the Colorado chapter of the National Federation of Independent Business, told Colorado Politics Tuesday that the proposal will put "upwards upwards pressure on the entire wage scale. As labor costs increase, businesses need to adjust. That can mean fewer hours for workers and slower job creation, he said.
Responses from the Colorado Chamber of Commerce and the Denver Metro Chamber of Commerce have not yet been released. This story will be updated should they provide a response.
A public hearing is scheduled for Dec. 16 and public comments will be accepted until Dec. 31. The rules are to be adopted on Jan. 10, 2020, and go into effect on March 1.