Colorado finalizes new wage order, COMPS Order no. 36, 7 CCR 1103-1 (2020)

As noted in a previous post, Colorado proposed a new wage order in 2019. On January 22, 2020, the Colorado Division of Labor and Employment finalized its new order — now called COMPS order #36 — effective March 16, 2020.

As noted in the previous post, COMPS order #36 is  radical overhaul of Colorado’s prior wage orders. Among other things the changes include:

  • A title change: Reflecting the fact that this new order addresses far more than simple wages, its title will change from the “Colorado Wage Order” (WO) to the “Colorado Overtime and Minimum Pay Standards Order” (COMPS).
  • COMPS 36 will now reach almost all private employers in Colorado. Previous WOs had applied only to the following four industries: retail and service, commercial support service, food and beverage, and health and medical. COMPS will apply to all employers as a general rule, unless the employer falls within one of the newly defined exemptions set forth in prosed Rule 2 of COMPS. Therefore employers who previously considered themselves exempt from the WOs should now review COMPS to determine if it will become covered.
  • Minimum guaranteed salary: If covered COMPS will increase the minimum guaranteed salary to $42,500, effective 7/1/20, well above that in federal law. COMPS minimum will rise steeply thereafter, each year, to $57,500 effective 1/1/26 and be adjusted thereafter per the CPI.
  • Changes to particular job-specific exemptions have been proposed.
  • Changes to the timing of required rest periods and a requirement that employees who are not allowed their 10-minute rest period receive pay not only for the 10-minute rest period but an extra 10 minutes pay.
  • Changes to the ability to take credits and the ability to charge for uniforms.
  • Changes to the fluctuating workweek method of calculating overtime.
  • Expansion of anti-retaliation protections.
  • Expansion of employer obligations as to “transparency,” “language inclusiveness” and posters.

In addition, the as-finalized COMPS order #36 dramatically expanded the definition of an “employee” and “employer” in Colorado — in apparent reflection of similar narrowing in California — by mandating that a worker will be deemed an “employee” not an independent contractor who otherwise meets all requirements to be an independent contractor but who performs work that is itself part of the company’s own regular business. The CDLE explained this “entirely new factor to the ’employee’ analysis'” in its Statement of Basis, Purpose, Specific Statutory Authority, and Findings in support of COMPS Order #36, as follows:

For example: if a retail clothing store hires an outside plumber on a one-time or sporadic basis to make repairs as needed, the plumber’s services are not part of the store’s primary work — selling clothes. On the other hand, when a clothing manufacturer hires work-at-home seamstresses to make dresses, from cloth and patterns supplied by the manufacturer, that the manufacturer will sell, or when a bakery hires cake decorators to work on a regular basis on custom-designed cakes, the workers are performing the “primary work” of the hiring business.

Other changes to the prior draft order include a rule that workers who are putting on and taking off work clothes and gear (so-called “donning and doffing” cases) are engaged in work and accordingly must be paid for the such time if it takes “over one minute” and if it is not clothes/gear that is “worn outside work as well. Additionally COMPS order #36 will effectively require that, when a 10-minute break is otherwise required, nearly all such workers will need to be made to take their 10-minute breaks every 4 hours. Only workers who work under collectively bargained agreements that say otherwise will be allowed to take breaks outside a 4-hour period, as can some workers who work for certain Medicaid-funded entities.

Perhaps most importantly the final order also implemented a slower increase in the required guaranteed minimum salary for overtime exempt person in 2020 and 2021, then a steeper climb in 2023 to reach the previously planned 2024 minimum salary of $55,000.

Source: final COMPS Order #36 as redlined by the CDLE against its prior draft.

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EEOC Harassment Charges Reflect #MeToo’s Relevance

Interesting article from SHRM on post- #MeToo statistics at EEOC for sexual harassment charges.

On the one hand, there still has not been a flood of sexual harassment charges. In fact, their number remains lower than pre- #MeToo 2010-13 numbers but are slowly climbing back from their post- #MeToo 2014-17 dips.

The number of sexual-harassment charges filed with the EEOC dipped slightly in fiscal year 2019 from 2018 levels but remained much higher than in the immediately preceding years:

  • 2014—6,862
  • 2015—6,822
  • 2016—6,758
  • 2017—6,696
  • 2018—7,609
  • 2019 —7,514

The number of sexual harassment charges were at a high level before that, though they dropped from the beginning of the 2010s:

  • 2010—7,944
  • 2011—7,809
  • 2012—7,571
  • 2013—7,256

One has to wonder if these numbers aren’t the product of the the country becoming more educated on Title VII’s sexual harassment legal requirements; in other words, understanding what the law does and does not prohibit, fewer unsupported claims are being filed. Indeed, the EEOC’s recent statistics do suggest that the charges, which are being filed post- #MeToo, may be, by and large, the stronger claims, at least in the sense that they are producing higher dollar-amount settlements.

The monetary benefits from the agency’s sexual-harassment settlements have steadily risen over the past four years:

  • 2016—$40.7 million
  • 2017—$46.3 million
  • 2018—$56.6 million
  • 2019—$68.2 million

Source: “EEOC Harassment Charges Reflect #MeToo’s Relevance,” A. Smith, J.D. (1/24/2020), available here, www.shrm.org/ResourcesAndTools/legal-and-compliance/employment-law/Pages/EEOC-harassment-charges-MeToo.aspx

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DOL releases final joint employer rule

The DOL has issued a final rule regarding the Joint Employer doctrine.

Analysis of a joint employer issues under the Fair Labor Standards Act (FLSA), the DOL rule says, should start — and will generally end — with the following non-exclusive four factors (quoting the summary in the DOL’s Fact Sheet regarding its new rule):

  • hires or fires the employee;

  • supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;

  • determines the employee’s rate and method of payment; and

  • maintains the employee’s employment records.

The rule emphasizes that no one factor will be controlling and specifically states that the fourth (maintaining employment records) alone will never be sufficient to establish joint employer status. This is a particularly important principle for companies — like franchisors for example — that mandate the use of a software platform hosted by the principle company to encompass a variety of operational needs that include scheduling and HRIS.

The rule eliminates the prior “economic dependence” test that has proven so controversial. Likewise the rule specifies that the worker’s ability to recognize an independent profit or loss is not to be considered. The rule states that, under its application, franchisors, among others, will generally no longer be considered joint employers.  Indeed the rule states that the following are not to be considered indicators of joint employer status (again quoting the DOL’s own summary at its Fact Sheet, above):

  • operating as a franchisor or entering into a brand and supply agreement, or using a similar business model;

  • the potential joint employer’s contractual agreements with the employer requiring the employer to comply with its legal obligations or to meet certain standards to protect the health or safety of its employees or the public;

  • the potential joint employer’s contractual agreements with the employer requiring quality control standards to ensure the consistent quality of the work product, brand, or business reputation; and

  • the potential joint employer’s practice of providing the employer with a sample employee handbook, or other forms, allowing the employer to operate a business on its premises (including “store within a store” arrangements), offering an association health plan or association retirement plan to the employer or participating in such a plan with the employer, jointly participating in an apprenticeship program with the employer, or any other similar business practice.

Additional information, including a FAQ, is available on the DOL’s web page regarding its new rule.

Source: DOL final rule, “Joint Employer Status Under the Fair Labor Standards Act,” 85 Fed.Reg. 164 et seq. (1/16/20).

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NLRB returns to its historical standard for deferring to arbitration both before and after the arbitral award

The NLRB has reversed its 2014 Babcock & Wilcox standard for deciding when the Board will defer to arbitration, both before (“pre-arbitral” deferrals) and after (“post-“) the arbitration itself has occurred. Now the burden is on the party resisting deferral (typically a union) not the party urging deferral (typically an employer), and the question is only whether (simplifying a 4-part test) the arbitration has/will provide a fair and full opportunity to litigate the same facts, not whether the CBA expressly provides for arbitration of ULP’s (charges alleging violations of the NLRA, technically called “unfair labor practices”) or whether the parties actually have litigated (or will) litigate the ULP.

Source:  UPS, Inc., 369 NLRB No. 1 (12/23/19).

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