Colorado employers - act before December 31st!
As we’ve shared recently, the federal salary threshold for an exempt employee will be increasing effective January 1st, 2020. What should be just as, if not more important for Colorado employers to note though, is there is a proposed rule to swiftly increase our state’s minimum exempt salary level which could be effective as early as July 2020.
If you're hiring new employees or working on your budget for current employees' payroll and salaries, take a look at these numbers that might drastically impact budgeting.
As a refresher… Through 2019, the minimum salary an employee must be paid to be considered EXEMPT from minimum wage, overtime, timekeeping, and in Colorado - meals and rest breaks is $455/week or $23,660/year.
Effective January 1, 2020, the Federal rules are that the minimum salary an exempt employee must make is $684/week or $35,568/year. Up to 10% of that salary level may be provided through nondiscretionary bonuses, as long as it follows certain rules.
The proposed Colorado Overtime & Minimum Pay Standards (COMPS) Order #36 would bring the minimum salary for employees exempt from minimum wage and overtime to $817.31/week or $42,500/year effective July 1, 2020. Not only would our immediate salary threshold increase, but there would be scheduled increases of $3k to occur each year until we reach $57,500/year on January 1, 2026. And unlike the federal rule, there is no mention of any of that salary level coming from bonuses.
Here is a quick glimpse of the full schedule of increases.
Date Weekly Overtime-Exempt Salary (& Rounded Annual Equivalent)
July 1, 2020 $817.31 per week ($42,500 per year)
January 1, 2021 $817.31 per week ($42,500 per year)
January 1, 2022 $875.00 per week ($45,500 per year)
January 1, 2023 $932.69 per week ($48,500 per year)
January 1, 2024 $990.38 per week ($51,500 per year)
January 1, 2025 $1048.08 per week ($54,500 per year)
January 1, 2026 $1,105.77 per week ($57,500 per year)
January 1, 2027 The 2026 salary adjusted by the same CPI as the CO Minimum Wage
This is already in place, In addition to being paid a salary that meets these levels, employees must also be performing particular job duties that qualifies them as exempt. Generally speaking, the federal and Colorado rules are predominantly consistent and can be found here.
Exceptions do exist
Like any other rule, there are exceptions and fine print. Some of those exceptions include the agricultural industry, the ski industry, owners, doctors, lawyers, teachers, and a handful of others.
The Time is Now
There is the opportunity to attend a public hearing on the proposed COMPS Order on Monday, December 16, from 3:00 pm to 6:00 pm at the Colorado Division of Labor Standards and Statistics office in Denver. You may also submit written comments, anytime before the comment deadline of Tuesday, December 31, 2019, to firstname.lastname@example.org or on this google form.
All of the details and the Public Rulemaking Notice can be found here.
As always, please feel free to reach out if you have additional questions. We wish you and yours a wonderful and safe holiday season!