Exemptions: Overtime & minimum wage - Colorado

Summary of differences between federal and state regulations

Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional, and outside sales employees. Section 13(a)(1) and Section 13(a)(17) also exempt certain computer employees.

To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684 per week. Job titles do not determine exempt status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the Department’s regulations.

This salary minimum does not apply to outside sales employees, teachers, and employees practicing law or medicine. Exempt computer employees may be paid at least $684 on a salary basis or on an hourly basis at a rate not less than $27.63 an hour.

The state’s Department of Labor and Employment (CDLE) adopted the final rule for the Colorado Overtime and Minimum Pay Standards Order (COMPS), which went into effect on March 16, 2020. COMPS replaced the Colorado Minimum Wage Order (CMWO).

Three key components include:

1. It applies to all industries (limited exemptions);
2. It clarifies ambiguous wage rules that confuse employers and employees, such as when pre- and post-work time (for travel, clothes/gear, screenings, meetings, etc.) does or does not count as paid work time.
3. It raises the annual minimum salary level for “white collar” exempt employees as follows:

Colorado employees who are administrative, executive/supervisor, professional or outside sales are exempt from minimum wage. Those exempt from overtime include the following: salespersons, parts persons, mechanics, sales people on commission, ski industry employees, medical transportation employees.

Note that Colorado uses different definitions for the “white collar” exemptions than those adopted by the federal Wage & Hour Division, as follows:

Administrative employee: a salaried individual who directly serves the executive, and regularly performs duties important to the decision-making process of the executive. Said employee regularly exercises independent judgment and discretion in matters of significance and their primary duty is non-manual in nature and directly related to management policies or general business operations.

Executive or supervisor: a salaried employee earning in excess of the equivalent of the minimum wage for all hours worked in a workweek. Said employee must supervise the work of at least two full-time employees and have the authority to hire and fire, or to effectively recommend such action. The executive or supervisor must spend a minimum of 50% percent of the workweek in duties directly related to supervision.

Professional: a salaried individual employed in a field of endeavor who has knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study. The professional employee must be employed in the field in which they are trained to be considered a professional employee. Note: the requirement that a professional employee must be paid on a salary basis does not apply to doctors, lawyers, teachers, and employees in highly technical computer occupations earning at least $27.63 per hour.

Outside salesperson: any person employed primarily away from the employer’s place of business or enterprise for the purpose of making sales or obtaining orders or contracts for any commodities, articles, goods, real estate, wares, merchandise or services. Such outside sales employee must spend a minimum of 80% of the workweek in activities directly related to their own outside sales.

Note that Colorado does not reference (and may not recognize) the “highly compensated employee” exemption for those earning more than $107,432 per year.

State

Contact

Colorado Department of Labor and Employment

Regulations

Colorado Minimum Wage Order

(5) Exemptions from The Wage Order:

(6) Exemptions from Overtime:

www.colorado.gov/pacific/cdle/exemptions

Federal

Contact

The Department of Labor is the federal agency that monitors hours worked.

Regulations

Regulations for exempt employees can be found in CFR 29 Part 541, Defining And Delimiting The Exemptions For Executive, Administrative, Professional, Computer And Outside Sales Employees