Colorado Capitol Report

Changes to Overtime Rules Will Impact Colorado Employers

Changes to Overtime Rules Will Impact Colorado Employers

Colorado Chamber of Commerce members should be aware of upcoming changes to Colorado’s current Minimum Wage Order regarding overtime and exempt salary standards.  The Colorado Division of Labor Standards & Statistics within the Department of Labor & Employment has chosen to make significant changes to the Order and will be holding a public hearing on their proposed changes on December 16th (additional details below).   We highly recommend attending this hearing or submitting comments if you have concerns with the changes that the Division is proposing. The Colorado Chamber has submitted public comments to the Division expressing Chamber member concerns regarding the proposed Order.

Background:  The Minimum Wage Order addresses Colorado wage rights and responsibilities, and includes:  eligibility for the Colorado minimum wage; overtime pay for work past 40 hours per week and 12 hours per day; meal and rest breaks; and other employee and employer rights and responsibilities.

The two major changes being proposed by the Division include:  (a) expanded coverage and (b) a new salary threshold for exemption.

Based on feedback received from our members at the latest Labor and Employment Policy Council, the Colorado Chamber has concerns about several aspects of this proposal. First, it imposes a very rapid implementation timeline for businesses to adjust to major changes in overtime salary standards, increasing the minimum exempt salary to $42,500 in July 2020. This timeline also presents budgetary challenges for businesses that weren’t anticipating such changes in the middle of the calendar year.

Many of our members also have concerns with whether the proposal’s minimum exempt salary level is appropriate statewide – and whether more rural areas of the state should be held to the same salary standard as the Denver metro and other urban areas.

Please see the following details regarding the Division’s proposed overtime changes:

Details on Public Hearing:

Date:                December 16, 2019
Time:                3:00 pm to 6:00 pm
Location:          Colorado Division of Labor Standards and Statistics,
12th Floor Conference Room, 633 17th Street, Denver, CO 80202

Proposed Timeline for Implementation of the Rule:

Pre-rulemaking comment period:      March 6, 2019
Pre-rulemaking public testimony:       August 28, 2019
Proposed rule:                                      November 15, 2019
Public hearing:                                      December 16, 2019
Comment deadline:                              December 31, 2019
Adoption of final rule:                         Friday, January 10, 2020
Effective date of rule:                           ​March ​1, ​2020, ​except July ​1, ​2020 ​for ​new ​exempt salaries

You may submit written comments regarding these proposed changes to the Minimum Wage Order at any time before the comment deadline of December 31, 2019. Comments can be submitted before or after the public hearing by mail, fax to 303-318-8400, or email to [email protected].

Please contact Loren Furman at [email protected] with any questions/concerns or comments regarding this matter.

Colorado Chamber Announces New Chair of Labor & Employment Council

We are pleased to announce that Daniel Combs will be serving as Chair of our Labor & Employment Council for the upcoming year.  Dan is a Shareholder at the law firm of Campbell Litigation, and represents employers in all aspects of federal and state court litigation and proceedings before federal and state administrative agencies.  He has also litigated claims under Title VII, the ADA, the ADEA, ERISA, and the FLSA, as well as state-law contract and court claims. He counsels employers on employee relations matters including hiring best practices, investigations, disciplinary actions, termination decisions, policies and procedures, confidentiality and restrictive covenants, protected concerted activities, and accommodation issues.  Dan also represents employers in NLRB representation and unfair labor practice proceedings, and has substantial hearing and trial work before the NLRB and in labor arbitration.

Dan has been very active on the Labor & Employment Council and often testifies on behalf of the Colorado Chamber and other organizations on the many employment bills introduced each Legislative Session.  Prior to joining Campbell Litigation, P.C., Dan was an attorney with Littler Mendelson, P.C. and the law firm of Sherman & Howard, LLC.

Labor and Employment Council Kicks Off First Meeting Ahead of 2020 Legislative Session

The Colorado Chamber’s Labor and Employment Policy Council held its first meeting in anticipation of legislative session, which begins in January. The Council heard from speakers from the Colorado Department of Labor and Employment (CDLE), discussed pending legislation impacting business, and welcomed its new Chair, Daniel Combs of Campbell Litigation.

Joe Barela, Executive Director at CDLE, broadly outlined Governor Jared Polis’ priorities for the department, including early education, workforce issues, and the Family and Medical Leave Insurance (FAMLI) Task Force.

Barelo and Patrick Teegarden, CDLE’s legislative liaison, have been helping facilitate the FAMLI Task Force discussions and provided an overview of the process for the Council. The Task Force will provide a report to the Legislature and Governor in January outlining options and recommendations for what a family and medical leave program should look like in Colorado.

Teegarden emphasized that regardless of how the Task Force ultimately votes, the report will include all options considered by the Task Force – including a potential private party option outlined by Pinnacle Insurance last month. Pinnacle’s proposal was modeled on the state’s existing worker’s compensation program, in which the state mandates that employers provide a certain level of core benefits that are then provided through a private insurer.

Scott Moss, Director of CDLE’s Division of Labor Standards & Statistics, addressed Gov. Polis’ recent overtime proposal, which would raise the state’s minimum exempt salary threshold starting next year. Colorado Chamber members have expressed several concerns over the proposal, including its rapid implementation timeline in the middle of the calendar year, the administrative burden of such a change, and whether the minimum exempt salary level is appropriate statewide.

The Council also discussed legislation that is expected to be filed in the upcoming legislative session that will impact labor and employment in Colorado, including bills on employment discrimination and data privacy.

The next Labor and Employment Policy Council meeting will be held on January 22, 2020.

Who Really Pays? Final Public Option Health Plan Isn’t So Healthy …

The Colorado Division of Insurance (DOI) and the Department of Health Care Policy & Financing (HCPF) released their final report meant to provide solutions for bringing down healthcare prices for individual uninsured and underinsured consumers.  However, some of the largest healthcare stakeholders say the final report takes a heavy-handed approach, leaving too many questions still unanswered, details for implementation and actuarial assessment of proposals too vague, and hospitals remain the primary paying target.

So who really pays? Rate-setting & mandates:

The final report gives two clear areas of focus:  1.)  Rate-setting for how hospitals will be reimbursed for care, and 2.)  How insurance carriers will be encouraged to cover areas of no competition, while reducing costs through prescription drug rebates and a 5% reduction in allowable profit.

Despite the best of intentions to reduce the cost of healthcare, there is market evidence that the third “payer” in this scenario will actually be Coloradans with employer-sponsored health plans — due to cost-shifting under the burden of a competitive market structure being forcing to operate with mandatory price settings.

  • Hospitals: The public-option plan would reimburse hospitals at set rate of 175% – 225% of Medicare rates (based on a matrix of factors), while DOI and HCPF say they are committed to ensuring rural hospitals aren’t hurt by the changes.   For some hospitals, this could be a change of nearly 500% reimbursement reduction due to the markets they cover.
  • Insurance carriers: The proposal requires insurance carriers to adjust to a new medical loss ratio of $.85 on the dollar of money collected in premiums to pay for patient care (from the previous $.80 on the dollar); broker commissions would be an additional cost. The report also mandates that prescription drug rebates paid by manufacturers to insurance carriers must be used to reduce the price of individual policies, with few details on implementation.
  • Employer-sponsored coverage & learning from reinsurance: The final public-option proposal would bring at least $235 million in cuts to healthcare providers in the first year and potentially as much as $1.5 billion in cuts to healthcare providers over five years – meaning those costs would likely be shifted to the 53% of Coloradans with employer-sponsored healthcare.

Additionally, the model being pursued would have the unintended consequence of reducing federal subsidies for 114,000 Coloradans currently using Connect for Health Colorado.  Similarly to the reinsurance bill (HB19-1168), individual premium markets will be reduced by roughly 20% in 2020, but actual premiums for subsidy-eligible Coloradans will increase 19%.

Noteworthy changes from proposal to final report: 

  • The final proposal will only focus on insurance carriers in the individual market. The initial proposal was to require every carrier, in any of the major medical markets (individual, small, large), to carry a public option.
  • Projected savings went from an estimated 9-18% to a projected 10% savings; 15% in high-cost areas.

Who the public-option covers:  ONLY the individual market, for now…

  • Roughly 8% of Colorado’s population are seeking healthcare through the individual market, representing roughly 225,000 – 250,000 individuals.
  • However, the report acknowledges that less than 2% of Colorado’s uninsured would gain coverage under the plan, leaving a significant cost on the table by not reaching the broadest number of those in need of coverage, while reducing access and choice to others.
  • Did you know?: Roughly 60% of uninsured Coloradans are already eligible for existing public coverage programs but are not currently enrolled.

Framework: 

The final proposal maintains a public-private partnership model between the two government entities (DOI and HCPF) overseeing the public option, and the licensed insurance carriers who administer those plans – based on an understanding of voluntary participation.

Colorado currently has 22 counties served by just one carrier and the final proposal asks that carriers ‘partner’ with the State to provide affordable care.  However, there is additional language which authorizes DOI to require carriers to provide public options in counties without competition.  Significant questions remain about how the state would determine which carriers would be mandated to provide options in counties where a voluntary second carrier is not secured.

“If we feel the hospitals are not participating, we will require their participation.” – HCPF Executive Director Kim Bimestefer

Timing:

As proposed, the public option would be rolled out in just two years on January 1, 2022, for the individual market, followed by a small-group roll-out in an additional two to three years.  DOI and HCPF have reserved the ability to evaluate whether there should be a large-group public-option in the future.

Background:  As required by House Bill 19-1004, DOI and HCPF were directed to study and make recommendations for a “competitive state option for more affordable health care coverage.”

DOI and HCPF held 14 statewide listening sessions and a public comment period through October 25, 2019.  The final report was sent to the Colorado General Assembly on November 15, 2019.

It is now up to the Colorado General Assembly to determine next steps in pursuing implementation of an individual public option plan through legislation.

Sign Up Now to Sponsor a Council Meeting

As the 2020 legislative session approaches, we want to invite you to once again participate in Colorado Chamber of Commerce’s Policy Councils. Councils offer a unique opportunity for Colorado Chamber members to add their expertise to our policy-making and influence legislation and regulations that impact business. Council meetings provide an open and frank dialogue between our members, key legislators and state agency leaders. The following Councils are available to all our members:

  • Energy and Environment Council
  • HealthCare Council
  • Labor and Employment Council
  • Governmental Affairs Council
  • Tax Council

Each Council will meet at noon at the Colorado Chamber of Commerce office throughout the session. Lunch is served at each meeting. Sponsorship of council meetings by our members is crucial to maintaining the practice of providing lunch during these important council meetings. We need sponsors for every meeting, so we would like to encourage members to sign up now to sponsor a lunch! Sponsors receive recognition in both email reminders for the meeting and our online Events Calendar, as well as during the meeting. The Colorado Chamber of Commerce does all of the ordering and setup of the lunch and the sponsorship is always a flat rate of $650. Please contact Laura Moss for more details or to sign up as a sponsor. We appreciate your ongoing support!

Please see the below for specific dates for each council. Councils always meet from Noon to 1:15 p.m. in our conference room at 1600 Broadway, Suite 1000.

2019-2020 Council Meeting Dates

Energy & Environment Council:
January 29, 2020
February 25, 2020
March 24, 2020
April 29, 2020

Governmental Affairs Council:
January 28, 2020
February 11, 2020
March 31, 2020
April 27, 2020

HealthCare Council:
December 17, 2019
January 16, 2020
February 13, 2020
March 12, 2020
April 16, 2020

Labor & Employment Council:
November 20, 2019
January 22, 2020
February 19, 2020
March 18, 2020
April 22, 2020

Tax Council:
December 4, 2019
January 17, 2020
February 7, 2020
March 6, 2020
April 17, 2020