Restaurants in Colorado could see an increase in labor costs under a proposal aired yesterday to expand the pool of salaried employees who qualify for overtime pay.
Regulators from the state Department of Labor and Compensation (DLC) have recommended that supervisors paid an annual salary be entitled to time-and-a-half pay as of March 2020 if they earn less than $42,500 annually, an 80% jump from the current exemption threshold of $23,660. If approved, the state trigger would be about 20% higher than the new federal threshold of $35,568 that takes effect Jan. 1.
The proposal calls for raising the exemption level by $3,000 per year after 2021, until it hits $57,500 in 2026. Salaried employees earning less than those amounts would be entitled to time-and-a-half pay for hours exceeding 12 per day or 40 per week.
Supervisors with at least a 20% stake in the business they manage would be exempted from the overtime requirements.
If the new guidelines are adopted by DLC, Colorado would join California, New York and Pennsylvania in raising the overtime exemption threshold above the federal level. Proposals to set a higher bar are under consideration in New Jersey, Michigan, Massachusetts, Maine and Washington. The latter is considering resetting the trigger at $79,872.
The minimum wage in Colorado is currently $11.10 an hour and rises to $12 in 2020. Restaurateurs say they routinely offer much higher rates because a booming economy has depleted the pool of potential hires.
DLC said it plans to convene public hearings on the new overtime proposals in mid-December.