Colorado Minimum Wage 2024

Small business owners and their Colorado employees must know the current Colorado minimum wage requirements. Compliance is essential, but being informed about forthcoming adjustments can also help you plan strategically for your business’s future. This brief guide provides crucial details about Colorado’s minimum wage in 2024.

What Is the Current Minimum Wage in Colorado?

Colorado’s state minimum wage is set at $14.42 per hour in 2024, a rise from the previous rate of $13.65 in 2023. This rate surpasses the Federal Minimum Wage of $7.25, ensuring that employees are entitled to the higher state wage. Most employees in Colorado are covered under this minimum wage, although there are some exceptions, such as tipped employees, certain student workers, and other specific exempt occupations.

The minimum wage for tipped employees is also on an upward trend. After being set at $10.63 in 2023, it will increase to $11.40 starting January 2024.

Additionally, employees working overtime in Colorado are entitled to 1.5 times their regular pay for any hours worked beyond 40 in a standard work week, defined as any seven consecutive work days.

It’s important to note that local minimum wage rates may differ. For example, Denver’s minimum wage will escalate to $18.29 per hour beginning on January 1, 2024. This rate, along with the wages for city and contract workers, will see annual adjustments based on the Consumer Price Index. Furthermore, Denver’s minimum wage for tipped employees will rise to $15.27 in 2024.

The History of Minimum Wage Rate in Colorado

Colorado’s minimum wage history is characterized by a series of progressive increases in response to changing economic conditions, inflation, and legislative decisions.

The initiative to establish a minimum wage in Colorado began in 1935, marking the state’s initial foray into setting wage standards during the challenging economic climate of the 1930s. The first established minimum wage was $0.35 per hour. In 1941, recognizing the need for adjustments, the rate was increased to $0.40 per hour. After a quiet period, it was raised again in 1951 to $0.75 per hour. A significant year was 1967, when Colorado increased its minimum wage to $1.00 per hour in response to the Federal Fair Labor Standards Act.

Throughout the 1970s, in response to economic stagnation mixed with inflation—often referred to as stagflation—Colorado legislators adjusted the minimum wage multiple times, reaching $2.30 by 1979 to help boost workers’ disposable income. The 1980s saw no changes in the wage, reflecting the economic policies of the time. However, the 1990s brought renewed economic growth and several incremental increases, culminating in a minimum wage of $6.08 by 1999. These increases continued into the 2000s, with the wage reaching $7.25 by 2008.

The 2010s marked a significant period for wage legislation in Colorado, starting with the introduction of Ballot Measure 100 in 2010, which linked future adjustments to the Consumer Price Index. This measure aimed to ensure that wages kept pace with inflation. From 2011 to 2017, adjustments based on the CPI brought the minimum wage to $11.10. In 2018, the state passed the “Fair Pay for Working Families Act,” which outlined gradual increases, reaching a goal of $12 per hour by 2020. Subsequent CPI adjustments and the implications of the Fair Pay Act pushed the minimum wage to $13.65 by 2023.

As of 2024, the Colorado minimum wage has been adjusted to $14.42 per hour. These changes illustrate Colorado’s ongoing commitment to maintaining a fair wage structure that supports its workforce.

Here’s the table showing the annual minimum wage rates in Colorado from the last decade:

Year	Minimum Wage
2014	$8.00
2015	$8.23
2016	$8.31
2017	$9.30
2018	$10.20
2019	$11.10
2020	$12.00
2021	$12.32
2022	$12.56
2023	$13.65
2024	$14.42

Colorado Minimum Wage And Labor Law Posters

For business owners in Colorado, it is essential to understand the requirements for displaying labor law posters to comply with state regulations. These posters inform employees about their rights under various labor laws, including minimum wage standards.

The Colorado Department of Labor and Employment (CDLE) requires the display of several specific posters. The required posters can differ based on the business type and other factors such as industry and employee count. Key posters include the Colorado Overtime & Minimum Pay Standards (COMPS) Order Poster and others covering workplace health rights, anti-discrimination policies, and unemployment insurance.

Employers need to keep up-to-date with these requirements, which may change yearly. For instance, the COMPS Order posters are revised annually to reflect updates in minimum wage rates and overtime regulations, which may arise from inflation or new legislative actions.

Employers can find the most recent posters on the CDLE’s website.

Variations in Minimum Wage Across Colorado Locations

Minimum wage rates vary across different localities within Colorado. For example, Edgewater’s standard minimum wage is $15.02 per hour, dropping to $12.00 with a tip credit. Meanwhile, in the unincorporated parts of Boulder County, the minimum wage is $15.69 per hour, or $12.67 with a tip credit. Denver’s minimum wage is $18.29 per hour, but if the employee earns tips, this can be reduced to $15.27 per hour under the tip credit system.

These local minimum wages are subject to annual adjustments based on inflation. Both employers and employees must be aware of and understand the specific minimum wage regulations in their locality to ensure they adhere to the law and that workers receive proper wages.

Overtime Regulations in Colorado

Regardless of the workday’s start and end times, Colorado employees are eligible for overtime pay if they work more than 40 hours per week, more than 12 hours in a single workday, or more than 12 hours in a row. It is not possible to average overtime hours over several weeks. Even though an employee works 40 hours a week on average, they are still entitled to overtime pay for the 20 extra hours they worked in the first week if they work 60 hours one week and 20 hours the next.

The employee receives 1.5 times their regular hourly rate as overtime pay. For overtime worked, this rate would be $21.63 per hour for workers making the minimum wage. Many workers are eligible for overtime compensation, including those who get piece-rate or salary income. However, some salaried workers who do high-level work might be unable to work overtime. Similarly, some workers in particular industries, such as agriculture, summer employment, commissioned work, or camps, would not be entitled to overtime compensation.

2024 Minimum Wage Requirements for Tipped Employees in Colorado

In 2024, the minimum wage for tipped employees is set at $11.40. Employers are responsible for verifying that their tipped staff earns at least the standard minimum wage of $11.10, combining the tipped minimum wage and any earned tips. Should the total earnings fall short, employers must compensate for the shortfall.

Furthermore, while employers cannot directly take possession of an employee’s tips, they can establish a tip pooling or sharing arrangement. Such policies must be transparent, requiring that employers notify customers through written notices, which could be included on menus or receipts.

What Are the Exemptions for Minimum Wage in Colorado?

In Colorado, the COMPS details specific exemptions to the state’s minimum wage and overtime rules. This guide clarifies these exemptions, focusing on their applicability and effects on businesses.

• Administrative Exemption: Employees in administrative roles can be exempt if they meet several criteria: salaried, earn more than the minimum wage for all worked hours, support executives, contribute to important decision-making, and perform essential, non-manual work related to business operations or management.
• Executive Exemption: This applies to employees in supervisory or executive positions. Eligible employees must be salaried, earn above the minimum wage for all worked hours, manage at least two full-time employees, and primarily perform managerial tasks.
• Outside Salesman Exemption: Employees who focus on sales activities away from the business premises and spend most of their time on such activities may qualify for this exemption.
• Professional Exemption: Professionals who are salaried, earn above the minimum wage, and work in fields that require specialized knowledge or creative skills are exempt, though this does not extend to certain professions, such as doctors, lawyers, and teachers, regarding the salary requirement.
• Workers Under 20: According to federal law, employers in Colorado can pay new employees under 20 a training wage of $4.25 per hour during their first 90 days of employment.
• Student Workers: Full-time high school or college students working part-time can earn 85% of the Colorado minimum wage, which equates to $12.26 per hour. This rate applies for up to 20 hours per week at specific employers, like university work-study programs.

These exemptions are specific to Colorado and may vary from those in the federal Fair Labor Standards Act (FLSA). Both employers and employees should be aware of these distinctions to ensure they adhere to both state and federal wage regulations.

Strategies for Colorado Small Businesses Preparing for Minimum Wage Increases in 2024 and Beyond

Small business owners in Colorado should proactively prepare for minimum wage changes set for 2024. Here are several strategies to consider:

• Budget Reassessment:

As Colorado’s minimum wage is set to increase to $14.42 per hour and up to $18.29 per hour in Denver, small business owners must reassess their budgets. This involves examining how the new wages will affect your payroll expenses and might require adjusting pricing strategies or cost controls to sustain profitability.

• Staffing Optimization:

Evaluate your staffing requirements to ensure operational efficiency without reducing service quality. Consider if adjustments, such as more part-time positions or altering operation hours, could help offset the increased payroll expenses.

• Technological Upgrades:

Adopting or enhancing technology can help streamline business operations and reduce labor costs. Automated systems for scheduling, payroll management, or inventory control can improve operational efficiency and support handling higher wages.

• Legal and Financial Consultation:

It is crucial to stay informed about the latest labor regulations by consulting with legal and financial advisors. This will ensure your business remains compliant and you understand how wage adjustments could impact your operations.

• Communication with Employees:

Maintain clear communication with your employees regarding the impact of wage changes on the business and their roles. Discussions may involve potential alterations in work hours, job duties, or tip-pooling arrangements.

• Monitoring Local Wage Laws:

Given that minimum wage rates may differ locally, such as in Boulder, where they could reach $15.70 per hour, it is important to keep updated on wage laws in every area you operate in. This proactive monitoring will help you adapt to varying local requirements.

Conclusion

Colorado’s ongoing adjustments to minimum wage rates reflect the state’s commitment to aligning wages with the cost of living and economic conditions. For 2024, the state minimum wage is $14.42 per hour, with higher rates in some localities like Denver, where it reaches $18.29 per hour. Small business owners must stay informed about these changes to ensure compliance and strategically plan for their financial and operational impacts.

Understanding the details of minimum wage requirements, including local variations, exemptions, and overtime rules, is essential for employers and employees to navigate the evolving wage landscape effectively. By taking proactive steps such as reassessing budgets, optimizing staffing, and utilizing technology, businesses can better manage the effects of these wage increases while maintaining compliance and supporting their workforce.

Frequently Asked Questions