Colorado Legislative Updates

At a Glance

• Vacation ‘Use It or Lose It’ Requirements
• Healthy Families & Workplaces Act Amendment to regular rate of pay
• Regular Rate of Pay for Employees with Multiple Jobs
• Effective date is January 1, 2022

Summary

The Colorado Department of Labor and Employment (CDLE) published final rules on the Colorado Overtime and Minimum Pay Standards Order #38 (COMPS38) and updated the Wage Protection Rules.

These rules become effective January 1, 2022.

Vacation ‘Use It or Lose It’

The updated Wage Protection Rules state that employers must pay out any accrued and unused PTO or Vacation hours. This does not include leave for specific circumstances such as bereavement leave or jury duty.

The rule clarifies that employees cannot forfeit any accrued and unused PTO or Vacation time that is agreed upon in an employment agreement or policy. Employers may have policies that impose an annual cap on vacation pay, but under the rule, employees cannot forfeit any that has accrued.

HFWA Regular Rate of Pay

The new Wage Protection Rules provide some clarity on what rate paid sick leave should be paid out at.

• Bonuses do not need to be included in the HFWA pay rate;
• The HFWA rate is determined based on “the employee’s pay over the 30 calendar days prior to taking leave” (or the length of the employee’s employment, whichever is shorter); and
• The HFWA pay rate for employees with variable hourly rates should be calculated by adding all the wages for the 30-day period, and then dividing that amount by the total number of hours worked for that period.
• This rule is different from the regular rate of pay for overtime purposes.

Regular Rate of Pay for Employees with Multiple Jobs

COMPS 38 states there are two options for determining the regular rate of pay for employees working multiple jobs at different hourly rates for the same employer:

• The weighted method. The regular rate may be determined by adding all the wages earned performing each job, then “dividing that amount by the total number of hours worked in all jobs, consistent with the [FLSA], and resulting in a weighted average rate of pay.”
• Actual Rate of compensation. Alternatively, the regular rate may be determined by using “the regular rate of hourly pay for the job being performed during the actual overtime hours.”

Next Steps

Employers should review the requirements listed above in the coming weeks and, if necessary, make any applicable changes to their policies and handbooks.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.