Takeaways:

• A recent Colorado Supreme Court decision deviates from federal law by requiring holiday incentive pay to be included in the regular rate for overtime purposes.
• Employers covered by Colorado’s COMPS Order 39 should not follow the FLSA when considering holiday pay for purposes of overtime calculation.
• Colorado employers should review their pay policies and practices and consider drawing a clear distinction between “holiday pay” and “holiday incentive pay” in their policies and practices.

Related link:

• Hamilton v. Amazon.com Services LLC

The Colorado Supreme Court has ruled that Colorado law is not like federal law when it comes to holiday pay. The Court found that the Colorado Minimum Wage Order (currently, COMPS Order 39) requires holiday incentive pay be counted in the regular rate of pay for calculating overtime for non-exempt employees in Colorado. Hamilton v. Amazon.com Services LLC.

Before this decision, employers in Colorado that provide holiday pay generally followed the Fair Labor Standards Act (FLSA) when considering holiday pay for purposes of overtime calculation. FLSA regulations (29 C.F.R. § 778.203(c)) states that “extra compensation” paid to workers on holidays can be considered an “overtime premium” and not counted toward the regular rate of pay so long as it is not less than time and one-half of the regular rate.

The Court arrived at its conclusion based on Rule 1.8.1 of the COMPS Order, which excludes “holiday pay” from the regular rate but...

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