On January 1, 2025, the minimum wage for work performed on or in connection with federal contracts will increase as follows.
The minimum wage will increase to $13.30 per hour and the minimum base wage for tipped employees will increase to $9.30 per hour.
The minimum wage will increase to $17.75 per hour (for both tipped and non-tipped employees).
The Department of Labor has published helpful FAQs on Executive Order 13658 and Executive Order 14026. A side-by-side comparison of these executive orders, including the contracts covered by each, can be found here.
Notice of the minimum wage increase for contracts covered by Executive Order 13658 and Executive Order 14026 was published in the Federal Register on September 30, 2024.
On October 4, 2024, the IRS published Notice 2024-73 with guidance on the eligibility of long-term, part-time employees for participation in ERISA 403(b) plans under SECURE Act 2.0. This update clarifies how part-time employees can qualify for plan participation based on their tenure.
Additionally, the IRS announced plans to issue final regulations for long-term, parttime employee eligibility in ERISA 401(k) plans. These regulations, originally set to apply to plan years beginning after December 31, 2024, have been delayed and will now apply to plan years beginning on or after January 1, 2026, at the earliest.
The proposed minimum salary for exempt executive, administrative, or professional (EAP) employees will increase to
$1,086.25 per week, or $56,485 per year. The proposed minimum annual salary to use the highly compensated employee exemption will increase to $127,091 per year. The proposed minimum rate for exempt computer employees who are paid on an hourly basis will be $34.07 per hour.
If these proposed numbers are finalized, the federal wage thresholds will exceed Colorado's, setting the weekly rate at
$1,128.00 (or $56,656.00 annually) for EAP positions and $151,164.00 annually for the highly compensated employee exemption threshold under the Fair Labor Standards Act (FLSA). However, unlike Colorado's proposal, the FLSA does not establish a separate threshold for computer employees.
As we know, when state and federal laws conflict, the employer must apply the law that benefits the employee most.
Effective January 1, 2025, the new minimum wage rates for Colorado will be implemented. These updated rates reflect Colorado's commitment to fair compensation standards and align with recent legislative adjustments. Employers statewide must ensure compliance with these new minimum wage levels as they prepare for the upcoming year.
As of September 2024, the Colorado Supreme Court ruled that holiday incentive pay, which is extra compensation for hours worked on a holiday, must be included in the calculation of an employee’s "regular rate of pay" when determining overtime eligibility. This decision contrasts with federal law under the Fair Labor Standards Act (FLSA), where holiday incentive pay can generally be excluded from the regular rate if it meets specific premium conditions. Colorado’s ruling aligns holiday incentive pay with shift differentials, meaning it directly contributes to overtime calculations if an employee works beyond standard thresholds (e.g., over 40 hours in a week).
For Colorado employers, this requirement mandates updating payroll practices to ensure holiday incentive pay is factored into overtime calculations, which could affect non-exempt employees who work holidays and exceed weekly or daily overtime limits. The decision impacts businesses operating under the Colorado Overtime and Minimum Pay Standards (COMPS) Order, emphasizing the inclusion of all forms of compensation tied to hours worked.
Under the new rule in Colorado, employers must now include holiday incentive pay in the calculation of the regular rate of pay for determining overtime. This change stems from a recent Colorado Supreme Court decision, which differs from federal law under the Fair Labor Standards Act (FLSA). This decision impacts how employers in Colorado calculate overtime pay for non- exempt employees who work on holidays and receive holiday incentive pay, typically paid at a premium rate (e.g., 1.5 times the normal rate).
To calculate the new rate of pay that includes holiday incentive pay, follow these steps:
See Hamilton v. Amazon.com Svs.
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12/29 – Gag Clause Prohibition Compliance Attestation – The Consolidated Appropriations Act, 2021, Title II, Division BB contains a reporting requirement for group health plans and health insurers to submit a Gag Clause Prohibition Compliance Attestation annually through the Center for Medicaid & Medicare Services’ Health Insurance Oversight Systems to confirm compliance with the prohibition. For more information, please click here.
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