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Jim Clark: Upcoming election has business implications

Jim Clark/For Steamboat Today
Jim Clark
Courtesy Photo

With fall comes election season, and new rules from the federal government regarding overtime eligibility. Additionally, there are nine initiatives on the Colorado ballot this year, two of which have implications for business.

Let’s talk first about the new ruling from the U.S. Department of Labor. Under the Fair Labor Standards Act, also known as FLSA, the rules governing which employees are exempt from federal overtime requirements are set to change Dec. 1.

The U.S. Department of Labor’s final regulations more than double the minimum salary level required for an employee to remain exempt. Formerly, overtime-exempt employees earning less than $913 per week or $47,476 per year will become entitled to overtime.

It will also raise the highly compensated employee threshold from $100,000 to $134,000, and these salary levels will be updated every three years.

The details of the ruling are more complex, and I have no qualifications as a labor attorney. We highly recommend a free seminar we are conducting from 8 to 9:30 Sept. 27 from 8 to 9:30 a.m. at Bud Werner Memorial Library.

Tina Harkness, of Mountain States Employers Council, is an employment law attorney who can explain the new ruling at this seminar. All we require is that people register at rsvp@steamboatchamber.com, and tell us you’re attending the labor seminar.

Two initiatives on the Colorado ballot are noteworthy for employers. The first, Amendment 69, has been covered by Steamboat Today. In a few words, this amendment to the Colorado Constitution would set a 10 percent payroll tax to fund a single-payer health care system for the state.

The employee would pay 3.33 percent, and the employer would contribute 6.67 percent. Proponents tout the amendment as free universal coverage. Opponents find the measure lacking detail and fear a tax increase and the flight of providers from the state. Many questions remain unanswered. Our organization has not taken an official position on the amendment, but most of our business members are concerned.

As a community that hosts many location-neutral workers and businesses, a 10 percent tax on earned income would put our state income tax at the highest in the state. Additionally, the same 10 percent tax applies to retirement income of more than $24,000 per year.

The Colorado Care program would serve as supplemental to Medicare and could lead to mobile retirees leaving the state. A large number of Colorado business groups oppose Amendment 69.

While Amendment 69 is receiving the most attention, the minimum wage initiative probably has a greater chance of passage. This is a popular movement in the country and has been a part of Democratic Party platforms.

Unfortunately, this initiative impacts the restaurant industry in a negative way. It not only raises the minimum wage over time, it also raises the tipped wage to $8.98 by 2020.

It’s not unusual here for restaurants to pay the back of the house staff well above minimum wage, especially here. However, by raising the tipped wage at the same time, the disparity in pay between the front-of-the-house (servers, bartenders) and the back-of-the-house grows. In many situations, the tipped server makes out and gets a raise, while the back-of-the-house employee doesn’t.

This is an interesting year for businesses in Colorado, with many potential changes afoot. All merit careful observation.

Jim Clark is CEO of the Steamboat Springs Chamber Resort Association.


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