Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
On March 16, 2020, the Colorado Department of Labor and Employment, Division of Labor Standards and Statistics’ new Colorado Overtime and Minimum Pay Standards Order Number 36 (“COMPS Order 36”) officially went into effect. COMPS Order 36 applies to virtually all private employers in Colorado and overhauls wage and pay regulations, including overtime, meal and rest breaks, exemption tests, and numerous other areas. Detailed information regarding the requirements under COMPS Order 36 can be found here.
The Division made several minor changes to COMPS Order 36 as it took effect, including clarifying what information must be provided on employee paychecks. Critically, in light of workplace challenges surrounding the coronavirus pandemic, the Division provided a one-month grace period for employers to post, distribute, and have employees acknowledge receipt of the COMPS Order 36 poster. In addition, the Division will not find any employer in willful violation of the COMPS Order 36 if violations are remedied by April 16, and will not launch any Division-initiated investigations of alleged COMPS Order 36 violations until that date. Moreover, the Division will not send any new notices of claim to employers for any alleged violations of Colorado Wage and Hour Law until April 1.
One-Month Grace Period
The Division has instituted a one-month grace period – through April 16, 2020 – for purposes of compliance and enforcement. The grace period is limited to the following:
- Record-Keeping and Posting Requirements. Rule 7 of COMPS Order 36 includes extensive requirements for employers with respect to record-keeping, as well as posting and distribution of COMPS Order 36. Employers now have until April 16, 2020 to display a COMPS Poster in a place where employees may easily read it during the workday, or if a physical posting is impractical, to provide a copy of COMPS Order 36 or Poster to each employee. Employers also have an additional month to include a copy of COMPS Order 36 or Poster in their handbooks, manuals, or written or posted policies, to the extent the employer distributes those items, and to obtain employee acknowledgment.
- Division-Initiated Investigations. The Division’s Direct Investigations team launches its own investigations based on tips, leads, and known problem sectors. The Direct Investigations team will not launch new investigations based on violations of any new rules under the COMPS Order 36 until April 16, 2020. This delay does not apply to the Division’s investigation of any claims filed by employees, as the Division has a statutory obligation to investigate those claims, nor does it apply to any rules that were already in place under prior Minimum Wage Orders.
- Imposition of Penalties for Willfulness. Rule 8 of the COMPS Order 36 contemplates substantial penalties if an employer is found to have willfully refused to pay wages or compensation, or falsely denied the amount of a wage. To the extent a violation committed within the first month of COMPS Order 36 is solely of a new obligation under the Order, the Division will deem the violation not “willful,” so long as the employer remedies the violation by no later than April 16, 2020. Keep in mind, however, that these limitations apply to the imposition of willfulness penalties alone, so the possibility of back wage liability remains.
- Notices of Claim. By statute, a notice of claim starts a 14-day clock for the employer to avoid penalties by paying any wages due. The Division will not send any new notices of claim to employers until April 1, 2020. This applies to all wage claims, including those under COMPS Order 36.
Clarification Related to Exemptions from COMPS Order 36, Wage Statement Requirements, and Joint-Employment Standard
As a result of feedback from employee and employer representatives, the final COMPS Order 36 went into effect with the following changes:
- Additional Exemption for Direct Care/Direct Support Companions. Rule 2.2.7G of COMPS Order 36 now includes an additional exemption – from just 12-hour daily overtime – for companions designated as direct support professionals/direct care workers who are scheduled for, and work, shifts of at least 24 hours and who are Medicaid-funded, as defined in the Order.
- Wage Statement Requirements. Under Rules 7.1 and 7.3 of COMPS Order 36, employers are required to maintain records of an employee’s (a) name, address, occupation, and date of hire; (b) date of birth, if the employee is under 18 years of age; (c) daily record of all hours worked; (d) record of credits claimed and of tips; and (e) regular rates of pay, gross wages earned, withholdings made, and net amounts paid each pay period. These records must be maintained for a period of at least three years and for the duration of any pending wage claim pertaining to a given employee. Rule 7.2 clarifies that itemized earnings statements need only include the information in Rule 7.1(d)-(e), the total hours worked in the pay period, and the employee’s and the employer’s names. Many employers had expressed concern with their ability to include occupation, date of hire, and daily hours of work on paychecks, so this was a welcome revision. This clarification does not modify the Colorado Wage Act’s existing wage statement requirements. See C.R.S. § 8-4-103(4).
However, while occupation, date of hire, and daily hours of work need not appear on paychecks under the revised regulation, employers are required to provide employees with access to this information either (a) with the regular earnings statements; (b) through a functioning electronic portal (if the employer has an email address for the employee); or (c) for the entire calendar year by January 31 of the following year and, in addition, provide the information to an employee upon an employee’s request which may be made once per year.
- Joint-Employment Standard. In defining an “employer,” COMPS Order 36 incorporates the definition under the Fair Labor Standards Act, with some minor exceptions. Rule 1.6 of the Order now clarifies that the “joint-employment” standard remains as it has been under Colorado wage and hour law, notwithstanding the recent federal adoption of a narrower joint-employment standard for federal wage law. Permanent rulemaking regarding the joint-employment standard under Colorado law is expected.
The Division is expected to periodically issue additional guidance regarding COMPS Order 36 through Interpretive Notice and Formal Opinions. We will continue to carefully monitor the state’s interpretation and enforcement of these new legal requirements.