New state rules could make more Colo. workers eligible

State labor official: A quarter-million employees might be covered

More Coloradans will be eligible for overtime pay under new rules released Wednesday by the Colorado Department of Labor and Employment.

Among the major changes in the state’s wage rules is the minimum salary a worker must make to be exempt from overtime requirements. Starting in July, people must make at least $35,568, the current federal level, before they’re exempt from overtime. The minimum salary will increase in steps to $55,000 in 2024.

Currently, the minimum salary varies with the number of hours worked, which is complicated, said Scott Moss, director of the Division of Labor Standards and Statistics.

The Colorado Overtime and Minimum Pay Standards Order, which takes effect March 16, also covers all industries rather than the four previous broad categories: retail and service; food and beverage; commercial support service; health and medical. The new rule covers all workers unless specifically excluded.

Many modern jobs are hard to fit into those categories, state officials said in the order. Much of the substance of the existing rules was written decades ago.

Construction and manufacturing employees not covered by federal law will be eligible for overtime pay, rest and meal breaks under state law.

The changes clarify ambiguous rules that have generated litigation and confusion for employers and employees, labor officials said in a statement.

The Division of Labor Standards and Statistics said its research showed that expanding overtime rights increases job opportunities because employers spread more work to more workers.

The research also showed that reducing long work hours and providing breaks helps increase worker productivity, decreases turnover and the premature retirements common in certain industries, such as construction, state officials said.

Moss said it’s difficult to say how many new workers will be covered by the rules,

but estimated it could be as many as a quarter of a million.

“This rule is a huge improvement over current law,” said Elliot Goldbaum with the Colorado Fiscal Institute, which focuses on the effect of policies on working families.

Goldbaum said in an email he appreciates that state labor officials listened to businesses, workers and other leaders who called for a presumption that workers should be included rather than excluded from the protections.

However, Goldbaum said the institute would have liked more protections for agricultural workers and a higher starting threshold for overtime pay.

The rules expand rights to breaks on the job. Agricultural workers will get 10-minute breaks every four hours of work.

The new order also gives employees different options in handling overtime, including limiting overtime hours. The rules retain partial exemptions for specific jobs that traditionally have been exempt, including a lower salary threshold for field staffers in season camps and outdoor education programs and an exemption for ski workers from the 40-hour weekly overtime law.

The Department of Labor and Employment said more than 1,000 workers and employees gave input on the proposed wage rules. After hearing from employers, the state decided to phase in the increases more slowly for the minimum salary.

State officials said they also responded to worker requests to reach the full salary level sooner, in 2024 rather than 2026.

David Seligman of the nonprofit law firm Towards Justice called the new rules a good outcome for employees, including the expansion of overtime pay for salaried workers.

“We are grateful that more salaried workers will gain access to their hardfought overtime protections sooner under the final rule,” Seligman said in a statement.