© 2021 American Payroll Institute, Inc. Colorado Proposes Sweeping Changes to Wage and Hour Requirements The Colorado Division of Labor Standards and Statistics (DLSS) announced proposed changes to wage and hour regulations that would expand the definition of vacation pay to include paid time off (PTO), create a new highly compensated employee overtime exemption, make changes to regular rate of pay calculations for overtime and paid sick leave (PSL) purposes, and adjust agricultural worker minimum wage and overtime pay requirements [DLSS, Proposed/Adopted Rules, Colorado Overtime and Minimum Pay Standards (COMPS) Order #38, 7 CCR 1103-1 2022 Publication and Yearly Calculation of Adjusted Labor Compensation (2022 PAY CALC) Order, 7 CCR 1103-14 Wage Protection Rules, 7 CCR 1103-7]. PTO payout on termination requirement Amendments in the Wage Protection Rules order would define vacation pay to mean pay for leave, regardless of its label, that is usable at the employee’s discretion (subject to notice and approval of particular dates by the employer), rather than leave usable only upon occurrence of a qualifying event (e.g., medical need, caretaking requirement, bereavement, holiday). The expansion of the definition of vacation pay to include any PTO would clarify that the DLSS intends for the payment on termination requirement that applies to accrued vacation pay to apply more broadly to PTO policies, which can include a combination of vacation, sick, and personal time off. Even floating holidays would fall within this new requirement. The Colorado Supreme Court decision earlier this year (see PAYSTATE UPDATE, Issue 13, Vol. 23), which determined that company policies that provide for the forfeiture of earned vacation pay are unenforceable under Colorado law, applied specifically to accrued vacation pay, but did not address company PTO policies. Highly compensated employee overtime exemption Proposed amendments would create a new highly compensated employee exemption, which would apply to an employee who: (1) is paid annual wages of at least (a) the weekly salary threshold for the state executive, professional, or administrative exemptions, and (b) an annual salary of at least 2.5 times the rounded annual salary equivalent of the executive, professional, or administrative exemption and (2) customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative, or professional employee under state requirements and whose primary duty is office or non-manual work. Regular rate of pay calculations Amendments specify the regular rate for an employee working two or more nonexempt jobs at different hourly pay rates for the same employer within a specific workweek should be calculated either based on a weighted average or based on the job actually performed during the overtime hours. The rate based on a weighted average is determined by adding together all the wages earned performing each job, then dividing that amount by the total number of hours worked in all jobs, consistent with the federal Fair Labor Standards Act (FLSA) and resulting in a weighted average rate of pay for the workweek. The rate based on the job actually performed during overtime hours would be the employee’s regular rate of hourly pay for the job being performed during the actual overtime hours. The employer would be required to use the weighted average method of calculation unless there is a signed written agreement made with the employee stating that the other method of calculation would be used. Pay rate for PSL Amendments would require the pay rate for PSL purposes to be calculated using the same rules applicable to calculating an employee’s regular rate for overtime purposes except that: (1) bonuses included in the regular rate calculation are excluded from the PSL pay rate calculation and (2) only the weighted calculation method may be used for employees with variable hourly rates, except that the rate is measured over a 30-day period (rather than a week) based on the 30 calendar days preceding the leave. If the employee has not yet worked 30 days, the longest available period must be used. Agricultural worker minimum wage, overtime protections Amendments would apply all minimum wage laws and rules to employees of agricultural employers unless they are range workers who are paid at least the required annual minimum salary for range workers (specified in the PAY CALC Order for the applicable year) during periods when they are “principally engaged in the range production of livestock on the open range” and are provided without cost or deduction any housing, food, transport, and equipment required for H-2A visa range workers by federal regulations. November 15, 2021 Volume 23 Issue 22
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