Fall 2021 Rulemaking

The Colorado Department of Labor and Employment (CDLE) has proposed revised language for the wage and hour rules that, if adopted, will become effective as early as January 1, 2022. Specifically, the Colorado Overtime and Minimum Pay Standards (COMPS) Order and Wage Protection Rules would become effective January 1, 2022 if adopted. The revisions to the Colorado Whistleblower, Anti-Retaliation, Non-Interference, and Notice-Giving (WARNING) Rules are anticipated to be become effective in early 2022 but a definitive effective date has not been determined. The proposed changes include revisions to the COMPS Order, Wage Protection Rules and WARNING Rules as well as the addition of new rules such as the 2022 Publication and Yearly Calculation of Adjusted Labor Compensation (PAY CALC) Order and the Agricultural Labor Conditions Rules (effective May 1, 2022 if adopted). Below is a summary of notable proposed revisions to the existing rules.

• Regular Rate Calculation: The regular rate for an employee with multiple hourly rates will be calculated according to either a weighted average based on adding together all the wages earned while performing each job divided by the number of hours worked in those jobs, or as a rate based on the job “actually performed during overtime hours.” In addition, when there is no previous agreement about regular rate, the regular rate is calculated using the weighted average method.
• Highly Compensated Employees and Other Exemptions: The Order includes an exemption from the minimum wage and overtime rules for highly compensated employees as well as employees working at the National Western Stock Show. It will also include an exemption from the overtime rules for Direct Support and Care employees.
• Agricultural Labor Rights and Responsibilities Act: The Order includes language relating to the enforcement of the Agricultural Labor Rights and Responsibilities Act, passed in June 2021, throughout its provisions, and specifically under Rule 2.3.
• 2022 PAY CALC Order: The salary threshold information for certain exempt employees, including for white collar exempt employees, will be moved to the 2022 PAY CALC Order as will the statewide minimum wage requirements.
• Posting Requirements: The Order clarifies that every employer must post (or provide a copy of) a COMPS Order poster for the current year, and employers are not compliant if they try to reduce the effect of the posters or notices required by the Rules (such as by communicating positions contrary to, or discouraging the exercise of rights covered in, such posters or notices).

• Vacation Pay: The rules amend the definition of “Vacation Pay” to include “pay for leave, regardless of its label, that is usable at the employee’s discretion…rather than leave usable only upon occurrence of a qualifying event (for example, a medical need, caretaking requirement, bereavement or holiday).” This proposed revision would bring PTO policies squarely within the Division’s purview by significantly expanding the definition of vacation pay; employees could not be required to forfeit PTO either at year-end under a use-it-or-lose it policy or at separation.
• Signatures: The rules clarify that a complaint or other submission is considered signed if the document has an ink signature or another kind of electronic signature like a scanned signature or typed named entered by the party in the signature area.
• Pay rate and amount of HFWA leave: The new language in the rules changes how the pay rate and amount of leave for the Healthy Families and Workplaces Act (HFWA) is calculated. Under the proposed changes, the pay rate will be calculated using the same rules as the employee’s “regular rate” for overtime under the COMPS Order except that bonuses are not included, the weighted average must be used for employees with multiple hourly rates (but the rate is calculated over 30 days), and the HFWA regular rate is measured over the span of 30 calendar days (or the longest period otherwise if the employee hasn’t worked 30 days) before the employee takes leave.

In addition, the rules now provide guidance related to calculating the pay rate for indeterminate shifts (i.e., a shift that ends based on business needs instead of a certain number of hours worked). When this occurs, an employer can determine the number of hours of paid leave used by the employee based on the “hours actually worked by a replacement employee…or a similarly situated employee who works the same shift or who has worked a similar shift in the past.” Further, “[o]n-call employees” are allowed to use paid leave for the hours they are scheduled to work, which does not include time that the employee was asked to be available “unless the employee is performing work, including any ‘time worked’ as defined” in the COMPS Order.

• Employer Records of Accrued and Used Paid Leave Hours: Employers will also be required to produce documents showing paid leave that the employee has available to use and leave the employee has already used, including leave under C.R.S. § 8-13.3-403 and supplemental public health emergency leave.
• Collective Bargaining Agreements: Collective Bargaining Agreements will only be considered to provide “equivalent or more generous paid sick leave” where they meet the requirements under Rule 3.5.4(A) and do not limit employee protections related to accrual and carryover; use and conditions; and protection and effectuation of paid sick leave rights.

• Definitions: The proposed revisions revise and extend several definitions provided in the WARNING Rules. For example, the revised rules will expand the definition of “Complainant” to include “whistleblower, key service provider, or other protected party with a Complaint or Claim.” The changes also amend the definitions of “Employee” and “Employer” to include agricultural employers and employees. In addition, the proposed revisions provide new definitions of “Protected Activity,” “Retaliation,” and “Interference” in Rule 2.11. These definitions also include examples of Retaliation and Interference such as using the assertion of a protected right under the WARNING rules as a “negative factor” in any employment action for Retaliation or imposing stricter conditions upon the exercise of the right than provided by statute for Interference.
• Agricultural Labor Rights and Responsibilities Act: The rules include language relating to the enforcement of the Agricultural Labor Rights and Responsibilities Act throughout the rules but specifically under rule 2.17 and 4.2.2.
• Deadlines: The rules extend the time the Division has to assess whether it will investigate a Complaint and inform the Complainant of the decision to investigate or issue a Right to Sue from 30 days to 90. In addition, Rule 3.3.3 clarifies that a Complaint is received when the Complaint “has provided all the information and documents needed to process the Complaint, as requested in the Division Complaint form or by a Division investigator.”

The CDLE hosted a public hearing on November 1, 2021 for comments related to these proposed revisions to the COMPS Order and the Wage Protection Rules and is set to have another hearing discussing the proposed changes to the WARNING Rules on December 9, 2021. It is anticipated that the CDLE will post final language after those hearings. Employers should review the revised rules to ensure compliance if and when they become effective in 2022.

Faegre Drinker will continue to monitor and provide insights with respect to COMPS Order #38, the Wage Protection Act rules, and the WARNING Rules, as well as other wage and hour topics in Colorado.