Legal Updates – February 2020

The New Colorado Overtime and Minimum Pay Standards (COMPS) Order #36

It is important for Colorado employers to take steps now to ensure compliance with COMPS Order #36 as violations of the rule may expose them to both civil and criminal liability.

COMPS Order #36, issued by the Colorado Department of Labor and Employment, Division of Labor Standards and Statistics, includes significant changes to Colorado law regarding minimum pay and overtime for private employers.  The new order will replace Minimum Wage Order #35 and takes effect March 16, 2020.

An increase in salary thresholds for exempt employees is one of the most substantial changes included in COMPS Order #36.  This salary increase is substantially higher than those provided by federal law, which took effect January 1, 2020.  The new federal minimum exempt salary threshold is $35, 568, which breaks down to $684 per week.  The new Colorado minimum annual salary for exempt employees, effective July 1, 2020 through December 31, 2020, will match the federal threshold of $35,568.  However, starting on January 1, 2021, the COMPS Order will raise the minimum annual salary for exempt Colorado employees to $40,500 ($778.85 per week).  The COMPS Order will continue to increase the minimum exempt salary threshold annually, on January 1, until it reaches $55,000 ($1,057.69 per week) on January 1, 2024.  After that, the exempt salary threshold will be adjusted by the same Consumer Price Index as the Colorado minimum wage.

Under the COMPS Rule, the minimum salary basis for exemption from overtime in 2020 will be $817.31 per week, starting July 1, 2020.  If exempt employees are not paid at least that amount, the employer has several options:

1. Pay the exemption salary; or
2. Pay hourly with overtime at any rate at or above the Colorado minimum wage; or
3. Shift hours among employees to minimize overtime hours.

Additionally, COMPS Order #36 will cover all employees, unless specifically excluded.  This is another significant departure from Minimum Wage Order #35, which only applied to employees in the retail and service, commercial support service, food and beverage, and health and medical industries.  Some of the employees excluded from COMPS Order #36 are:

• Interstate transportation workers;
• Taxi cab drivers;
• In-residence workers (including casual babysitters, property managers, student residence workers and laundry workers);
• Bona fide volunteers;
• Work-study students;
• Elected officials and their staff;
• Certain agricultural workers, salespersons, mechanics and ski industry workers.

COMPS Order #36 also modifies Colorado law regarding employee rest periods.  To the extent practical, the new rule will require employers to provide a 10-minute rest period in the middle of each four-hour work period.  Employees who do not receive this 10-minute rest period will be entitled to an additional 10 minutes of pay.

Importantly, the new rule clarifies the ban on “reprisals,” which will now include any form of reprisal against actual or anticipated participation in any investigation, hearing, complaint or procedure relating to wage claim, right or rule.

COMPS Order #36 also clarifies posting requirements.  If an employer distributes a handbook or policies to employees, it should include a copy of the COMPS Order or poster.  Given the increasingly mobile workforce and the fact that many employers may not have traditional break rooms, the Order states that if the work site or other conditions make a physical posting of COMPS Order #36 impractical, the employer must instead provide a copy of the COMPS Order to each employee.  Further, employers who have employees with limited English language ability should provide a copy of the poster in Spanish.  Employers can request that the Division of Labor Standards and Statistics provide a translation of the poster into any other language, which the Division will provide to the extent possible.

The full text of COMPS Order #36 can be found here.  This Fact Sheet, provided by the Colorado Department of Labor and Employment, outlines the substantive changes to the law.

 

The EEOC Releases Fiscal Year 2019 Enforcement and Litigation Data

For fiscal year 2019, retaliation was again the most frequently filed charge, making up almost 53.8 percent of all charges filed.  This reality is critical for employers to note in setting workplace standards and investigating workplace complaints, because in addition to charges of discrimination or harassment, complaints frequently include retaliation allegations.  It is imperative that employers have systems in place to protect employees from retaliation and for them to have a company culture that does not tolerate retaliation.

Disability discrimination (33.4 percent), race discrimination (33 percent) and sex discrimination (32.4 percent) are the next most frequently filed charges, which is consistent with past years.

The agency received 7,514 sexual harassment charges, 10.3 percent of all charges, a 1.2 percent decrease from fiscal year 2018.  Regardless of the decrease from last year, sexual harassment charges still make up a significant proportion of the EEOC’s caseload.

Another continuing trend – the number of EEOC charges filed alleging LGBTQ-based sex discrimination increased again to 1,868 charges in fiscal year 2019, from 1,811 the prior year.  The Supreme Court is expected to rule this year about whether these kinds of claims are viable under Title VII’s statutory framework.

On the litigation side, the EEOC’s enforcement numbers decreased slightly, with 157 lawsuits filed in fiscal year 2019, compared to 217 the previous year.  Similarly, the EEOC’s recover on behalf of complainants dropped from $53.6 million to $39.1 million.  Despite these decreased numbers, the enforcement activity at the EEOC continues at a strong pace and employers should bear that in mind when considering workplace training and management practices.

The full list of statistics from the EEOC is available here.

The Coronavirus – Key Issues for Employers

The recent outbreak of the 2019 Novel Coronavirus (2019-nCoV) raises challenging issues for employers, particularly those that have multiple locations, provide a variety of services, and employ a global workforce that may travel routinely for business.  Employers planning for and responding to a potential pandemic should focus on three key issues: (1) how to maintain a safe workplace; (2) how to maintain operations in the face of a pandemic; and (3) how to minimize exposure to potential liabilities that may result.

Are you prepared? Here is a checklist to help employers:

Maintaining a safe workplace

An employer’s first priority is to protect the health and safety of its workforce. Employers should take the following specific steps to reduce employee exposure to the virus, and to minimize the likelihood of its spread:

☐ Appoint a coordinator.

• The first step you take should be to appoint someone who will be responsible tracking the latest developments and reviewing guidance from any governmental agencies. This person can also serve as a point of contact for concerned employees.

☐ Identify the location of all employees.

• It is important that you keep track of all employee locations. With a virus that spreads quickly, it will be vital that you remain abreast of where your employees are located and how to remove them from a country if it becomes necessary.
• Communicate frequently with employees and their families.

☐ Understand what your obligations are in each affected jurisdiction.

• Review applicable government health alerts and requirements for reporting.
• Review local laws on employee privacy, association, potential for discrimination and leave/benefit/wage & hour entitlements. The balance between privacy and public health is achieved differently in different countries and you should know the requirements for each area in which you have employees located.

☐ Address business travel concerns head on.

• Find other means to do business in countries where the virus is particularly active. Use teleconference, webinar or video conference rather than sending employees to areas of concern. Note that in the US, the Centers for Disease Control and Prevention (CDC) currently recommends that travelers avoid all nonessential travel to China.

☐ Share information from the relevant health authorities on how to prevent the spread of the virus.

• The CDC recommends the following steps to prevent the spread of repertory illnesses:
• Wash your hands often with soap and water for at least 20 seconds, especially after going to the bathroom; before eating; and after blowing your nose, coughing, or sneezing.
• If soap and water are not readily available, use an alcohol-based hand sanitizer with at least 60% alcohol. Always wash hands with soap and water if hands are visibly dirty.
• Avoid touching your eyes, nose, and mouth with unwashed hands.
• Avoid close contact with people who are sick.
• Stay home when you are sick.
• Cover your cough or sneeze with a tissue, then throw the tissue in the trash.
• Clean and disinfect frequently touched objects and surfaces using a regular household cleaning spray or wipe.

Maintaining operations in the face of a pandemic

Employers may have to operate with reduced or limited workforce in certain areas. Furthermore, local or national government actions may greatly restrict business options. In such instances, employers should:

☐ Identify the key positions and functions essential to sustain business continuity.

• Identify and, if necessary, cross-train back-up personnel to ensure critical functions are not compromised.

☐ Identify contact information for key suppliers, utilities, and local and national governments.

• Maintain a list and update it regularly so that you are able to quickly contact suppliers and governments as situations evolve.

☐ Consider employment law implications of a shutdown, and of asking certain employees in the affected areas to work remotely if feasible to reduce the potential transmission of the virus.

• Understand that wage and hour obligations are triggered, even in a pandemic. Employer obligations to provide pay during a shut-down will vary by jurisdiction.
• Before implementing any changes to the terms and conditions of employment, employers should be aware of the laws and regulations of the applicable jurisdiction, including any duty to consult with unions, work councils or other employee representative bodies, and government agencies.

Minimize exposure to potential liabilities that may result

☐ Review all legal obligations.

• Know in advance what steps you are legally permitted to take and what will not be allowed with respect to employees, suppliers and customers in the event of a cutback or shutdown of operations.

☐ Review all vendor and client contracts.

• Determine whether the contracts impose any reporting obligations on the company with respect to communicable diseases/viruses. Some third parties do in fact require companies to report if certain infectious diseases have entered their workforce.

☐ Review insurance coverage.

• Confirm that policies provide the right types and levels of coverage for crisis situations and are responsive to any changes in the business. Coverage and service levels can vary dramatically, and employers need to ensure the losses they are seeking to guard against (e.g., pandemics) are covered. Likewise, employers should determine whether policies in fact cover the individuals they want covered, including independent contractors or local nationals.

Be prepared to act quickly in an ever-evolving environment.  Stay organized and calm in this time of stress for many employees.  Your contact person will be essential to minimizing disruptions to your operations.  They will be the face to the company when it comes to addressing concerns of employees and coordinating next steps as this virus moves globally.