The Complex World of Overtime Calculations Under the Colorado Minimum Wage Order

Many of our members have employees who work longer shifts. These shifts can span multiple work days and can also bleed into different workweeks. For those employers subject to the Colorado Minimum Wage Order, overtime calculations can be confusing. In this Bulletin article, we are going to break down how overtime is calculated under the Minimum Wage Order for employees who are working shifts that span more than one day, as well as shifts that span more than one workweek.

To start with the basics, Colorado law requires that employers subject to the Minimum Wage Order pay overtime to nonexempt employees for all hours in excess of:

  • 40 hours per workweek; or
  • 12 hours per workday; or
  • 12 consecutive hours, regardless of the start and end time of the workday.

The regulations provide that the employer must use whatever calculation results in the greatest payment of wages to the employee. Remember, however, that “an employee is not entitled to double-count overtime hours but is instead entitled to the calculation method that results in the greater overtime compensation from among the three options set forth in the regulation.” Lopez v. Redi Servs., LLC  (D. Colo. 2017).

Under the Minimum Wage Order, a workweek is defined as “a fixed and recurring period of 168 hours, seven (7) consecutive twenty-four (24) hour periods.” 7 CCR §1103.2. A workday is defined as “any consecutive 24-hour period starting with the same hour each day and the same hour as the beginning of the workweek.” Id. The workday and workweek are both set by the employer and generally should not change once set. Under both the Fair Labor Standards Act and Colorado wage law, employers may not attribute hours to different workweeks or average hours over more than one workweek.

Overtime Calculation for An Employee Working Overnight Shifts in the Same Workweek

Now that we’ve established some basic definitions, let’s take a look at how overtime would be calculated for an employee who works overnight shifts during the same workweek.

If we are looking at the totals for this week, and take into consideration the three different ways employees in Colorado can earn overtime, we would get the following totals:

  • Forty hours per workweek = One hour of overtime (41 total hours)
  • Twelve hours per workday = Two hours of overtime (Tuesday)
  • Twelve consecutive hours, regardless of workday = Five hours of overtime (Shift 1, Shift 3)

For this week, this employee would be entitled to five hours of overtime pay because this method of earning overtime resulted in the greatest payment of wages to the employee.

Employers in this situation are required to look at each workweek individually and determine the method of calculating overtime that entitles the employee to the greatest payment of wages. At first, this may seem like a serious administrative issue, but once an employer is able to establish well-thought-out tracking and reporting procedures, it is relatively easy to determine which method results in the greatest payment of wages to the employee.

Overtime Calculation for Shifts Spanning Two Workweeks

So what happens when an employee works an overnight shift that stretches across two workweeks? Let’s look at the following example:

For the purposes of this example, the established workday starts at 12 a.m. and ends at 11:59 p.m., and the established workweek starts at 12 a.m. Sunday and ends at 11:59 p.m. Saturday. As such, the hours worked on Thursday, Friday, and Saturday would be attributed to Workweek 1.

In this scenario, the employee would be entitled to two hours of overtime (under the requirement for overtime where an employee works more than 12 hours per day (Friday) or under the requirement to pay overtime for all hours in excess of 12 consecutive hours (Shift 1)–either metric would work in this situation) for Workweek 1.

But things are a little more complex when looking at the Saturday–Sunday shift. The Colorado Department of Labor and Employment expressly states that the requirement to pay overtime for work in excess of 12 consecutive hours does not alter the established workweek. However, there is not a lot of guidance related to how to calculate overtime where a shift in excess of 12 hours spans two workweeks. Given this gray area, our recommendations would be as follows:

The employee would be entitled to three hours of overtime for working in excess of 12 consecutive hours, regardless of the fact that this shift took place across two different workweeks. But keep in mind that employers will then need to consider what calculation of overtime hours would result in the greatest payment of overtime to the employee for Workweek 2, regardless of the fact that the employee is already entitled to at least three hours. To make that determination, employers should:

  • Note in the time log or elsewhere that the employee is entitled to three hours of overtime for working three hours in excess of 12 consecutive hours for their Saturday–Sunday shift. Employers should also note the total number of hours for that shift, although the first part occurred in a different workweek.
  • Count the 10 hours worked on Sunday toward the employee’s total hours for Workweek 2.
  • At the close of Workweek 2, review the employee’s total hours across all shifts to determine which method of overtime payment results in the greatest payment of overtime to the employee.
  • If another calculation results in the payment of more than three hours of overtime to the employee, then go with that calculation. However, if the employee does not work any overtime under any of the metrics established in the Colorado Minimum Wage Order in Workweek 2, you need to pay the three hours of overtime related to the Saturday to Sunday shift at this time.

For Example:

Here, the employee did not work more than 12 hours in a day, and only worked 37 hours in this workweek. However, the employee worked two shifts that were in excess of 12 consecutive hours (Shift 1 and Shift 3), so they would be entitled to six hours of overtime pay.

 As stated above, these calculations can seem daunting at first, but once employers establish a method of tracking and reporting hours, the whole calculation seems much less complex. If you have any questions, or if you need any assistance establishing methodology to manage these calculations, please reach out to your Employer’s Council Representative.