February 27, 2020

Mirroring National Trends, Colorado’s “COMPs Order” and Other State Employment Laws Favor Employees Over Employers

A Colorado employment law that goes into effect on March 16, 2020 (called the Colorado Minimum Pay Standards Order, or “COMPS Order”) makes numerous changes to the state’s wage-and-hour protocols. Employers in Colorado need to be aware of how this new law will affect their businesses (more on that below).

The law — as well as others that have been introduced at the state level in Colorado — indicates a trend in the state to provide an ever-increasing number of protections to employees in Colorado while increasing the legal burden on employers. Many of the laws being passed and/or introduced are indicative of national trends in employment law, though the Centennial State has been an early adopter of many of these trends.

Employers in Colorado should watch these updates vigilantly to ensure that they remain in compliance as the laws change (if you’re a CEDR Member, don’t worry — we’re watching them for you).

Here’s what you need to know:

New Colorado Overtime and Minimum Pay Standards Order (“COMPS Order”)

Colorado’s expanded Wage and Hour regulations, or “COMPS Order,” goes into effect on March 16, 2020, with new exempt salary requirements being implemented on January 1 of the following year. Stipulations of the new law include:

Requiring uniform deposits is no longer acceptable

Employers can no longer ask employees to pay a deposit for required uniforms. If you asked for a security deposit for uniforms in the past, that money must be returned in full.

Poster and handbook requirements

Employers are now required to display a poster with the requirements of the new COMPS Order in the workplace where employees will see it, including a Spanish version if you have employees that speak Spanish. You must also include this poster in your employee handbook (this is an update that we are working on in the background for all Colorado-based CEDR Members).

Increased salary thresholds for overtime-exempt employees

Salary minimums for exempt employees increase to $778.85 per week ($40,500 per year) beginning January 1, 2021 and will continue to increase on the first of the year each year moving forward.

Clarified 10-minute breaks + penalties for missed breaks

This is the portion of the new law that we think will have the greatest impact on Colorado employers, long-term.

The COMPS Order includes language clarifying that mandatory paid 10-minute breaks (for every four hours of work performed) can be broken up into two 5-minute breaks if the employee voluntarily agrees to that structure. If employees are unable  to take their breaks, employers must pay them for 10 minutes of extra work per missed break.

All Colorado employers should be asking themselves this critical question:

How will you be able to prove to the governing body that you are complying with the new rule? The solutions are pretty simple and technology can help.

The first method is “old school,” but it has serious drawbacks. You will likely be told that it’s as simple as having employees sign off on something every week saying that they had an opportunity to take their breaks, took them, or voluntarily did not take them as part of your payroll process. 

This seems like a great idea until you consider the following: After some period of time, the “sign off” is not going to reflect what is actually going on. After weeks, months, or years of signing off, the employee will be able to say, “Yes, I signed off, but I was not actually allowed to or did not take those breaks.” Remember, the rule is not that you have to get proof that they did or did not take the breaks. The rule is that employers must “authorize and permit” their employees to take the breaks.

Once the governing body or opposing counsel is able to show a few instances where employees are signing off and not taking breaks, you are in trouble. Why? Because those few instances mean that all of your documentation is now suspect. 

The second option, which is one that we have implemented in California for many years, requires employees to attest daily that they have taken their breaks and, if they haven’t, you are alerted by your daily report that there is a problem. This way you can take immediate action to correct the issue and add 10 minutes of additional pay to the employee’s paycheck for the day and/or issue a corrective action telling the employee that they must take their breaks. 

By the way, California has a much stricter and more punitive break rule than your state. Nonetheless, by using the daily sign-off software model we are going at the heart of the matter — because employers are responsible for “authorizing and permitting” the breaks, they must take proactive steps to ensure that the breaks happen. 

For this reason, it’s important to have a timekeeping system that keeps track of breaks, including an option for employees to indicate whether or not they were able to take their breaks at the end of each shift. 

CEDR Members already have this functionality through the Time & PTO Tracking application in the Members Area (click here to schedule a demo of your software). 

Nonmembers can try the HR Vault software for free to see for yourself how a customized timekeeping system helps protect your business and prove you are complying with the new rules.  

From here forward, employment law plaintiffs’ attorneys have a new question to ask all ex- employees: “Did you take a 10-minute break morning and afternoon every day, and can your employer prove it?” If the answer is “No,” then they can represent the employee by notifying the state on behalf of the employee. At that point, if you are found to be out of compliance, your ex-employee’s legal fees become your problem.

 

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Pending Legislation

In addition to the COMPs Order, Colorado legislators have also introduced other bills that may have an effect on employer legal compliance in the state. Though none of these bills have yet been made law, it is worth keeping an eye on them to prevent any potential lapses in compliance.

Employee Protection for Off-Duty Marijuana Use

Though legal off-duty activity by employees is protected in Colorado, the Colorado Supreme Court recently held that this did not extend to the use of marijuana since the substance is still illegal according to federal law.

Introduced to the State House of Representatives on January 10, 2020, House Bill 20-1089 would extend these protections to include activities that are permitted by state law even if they are not permitted by federal law (i.e., medical and recreational marijuana use).

Employee Protections for Natural Hairstyles

The CROWN Act, which stands for “Creating a Respectful and Open World for Natural Hair,” offers protection against discrimination based on hair texture and natural styles. Specifically, this bill is intended to prevent employees of African descent from being discriminated against for natural hairstyles like braids, locs, afros, cornrows, Bantu knots, and twists.

The CROWN Act passed the Colorado State House on Wednesday, February 12 and is now with the State Senate. Other locations that have already passed or are looking to pass similar legislation include California, New York, New Jersey, Minnesota, and Texas. The bill has also been introduced in the United States Congress.

Paid Family Medical Leave

Following in the footsteps of states like Oregon, New Jersey, Washington, California, New York, Connecticut, and Massachusetts, in May of 2019 the Colorado State Legislature authorized a task force to look into the process of establishing a Paid Family Medical Leave Insurance program for employees in the state. Once the task force has completed its work, employers can expect the state legislature to move forward with proposing and potentially passing such a program 

Sick Leave

Since the first wave of sick leave bills was introduced across 29 states in 2011, many states and localities across the nation have passed their own paid sick leave requirements for private employers. 

Similar legislation was introduced in Colorado in 2016 but was postponed indefinitely. Still, our instincts tell us that, given recent legislative trends in the state and nationally, Colorado employers should not be surprised to see laws relating to sick leave requirements reappear in upcoming legislative sessions.

Colorado’s Trend Toward Favoring Employees Over Employers

Since 2017, the State of Colorado has passed a number of laws to offer additional protections for employees, and all indications are that this trend will continue in Colorado and in the rest of the United States. 

March 2017: Employee Right to Access Their Personal Records

This law gave employees the right to request access to their personal files once per year and once after being terminated from a position.

June 2017: Wage Theft Transparency Act

Where employer wage violations had previously been kept private, this law made them a matter of public record. The law was meant to give employers additional incentive to adhere to the laws in place, or else risk damage to their reputation in the event that their business was found guilty of a wage and hour mistake.

June 2019: Colorado Bans the Box

In another move echoing employment law trends that seem to be sweeping the nation, Colorado made it illegal for employers with 11 or more employees to ask applicants about their criminal history. This law does not apply to positions that require employers to ask about criminal history or positions that require the employer to conduct a criminal background check.

June 2019: Wage Theft Becomes a Felony

Taking the Wage Theft Transparency Act from 2017 a step further, Colorado’s Wage Theft Law made it such that employers who commit deliberate and/or egregious wage and hour violations could be prosecuted in criminal court and even given jail time for the offense. This law took effect on January 1, 2020.

Conclusion

Across the nation, employment laws are trending more and more in favor of employees and Colorado appears to serve as a microcosm for that trend based on the employment law updates it has passed since 2017. 

Not only has recent legislation (such as the 2017 Wage Theft Transparency Act and a 2019 law criminalizing wage and hour violations) made it important for employers to keep an eye on shifts in the legal landscape, but pending legislation indicates that such changes are just the beginning of a state-wide employment law overhaul.

Employers need to keep abreast of these updates to make sure they remain in compliance as the laws change.

The most recent update to Colorado State employment laws is the Colorado Minimum Pay Standards (“COMPS”) Order, which includes a number of new guidelines that employers must adhere to beginning on March 16, 2020. 

The stickiest piece of that legislation is likely that it requires 10 minutes of additional pay for any missed break and only provides for a very limited exception to the 10-minute break rules, which really means that employers need to document daily whether or not employees were given the chance to take mandatory breaks for every four hours of work performed. Fortunately, CEDR offers technology that makes compliance with this law easy.

 

CEDR MEMBERS: this technology is already available to you as part of your membership. Click here to get set up.

NONMEMBERS: This technology is available to you as standalone software. It’s incredibly affordable and has all sorts of other benefits beyond just PTO tracking and timekeeping. Click here to use it free for 90 days — no credit card required to sign up!

 

Have questions about your business’ current state of compliance with federal, state, and local employment laws? Reach out for a free consultation with an HR expert or let us review your handbook for free!

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace individual guidance about a specific issue with an attorney or HR expert. The information on this page is general human resources guidance that is believed to be current as of the date of publication. Note that CEDR is not a law firm, and as the law is always changing, you should consult with a qualified attorney or HR expert who is familiar with all of the facts of your situation before making a decision about any human resources or employment law matter.

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