What is the minimum wage in Colorado?

Staying well-informed about labor regulations, including the Colorado minimum wage, is important to maintain compliance and plan accurately for your business. The current minimum wage in Colorado is $12.32 per hour and applies to nonexempt employees in the retail, service, commercial support service, food, health care and medical industries. Other regulations may apply to employees who receive tips and businesses of various sizes.

Colorado minimum wage laws

Federal and state governing bodies have implemented a minimum wage to protect employees from unfair wages and labor exploitation. The intent is to provide employees with a minimum level of income in compensation for labor performed to promote equality and a basic standard of living.

Some employees, such as those who are paid a salary or perform certain duties, may be exempt from a minimum wage requirement according to either the Fair Labor Standards Act (FLSA) or the Colorado Overtime and Minimum Pay Standards Order (COMPS). Employees who don’t meet exemption criteria are entitled to all protections of COMPS and FLSA, respectively, including overtime pay, rest and meal periods.

Employers with employees who are covered by COMPS are required to post informative posters according to Colorado state guidelines, including:

• Colorado Overtime and Minimum Pay Standards (COMPS Order) #37
• Colorado Overtime &, Minimum Pay Standards (COMPS) Order #37 Poster – English
• INFO #1: Colorado Overtime & Minimum Pay Standards Orders (COMPS Order) #37
• Póster de la Orden de COMPS #37 (Colorado Overtime & Minimum Pay Standards [COMPS] Order #37 Poster)

Effective January 1st, 2017, Amendment 70 adjusted Colorado’s minimum wage to $9.30 from $8.31 per hour, with increases of $0.90 every January 1st until it reached $12 per hour in 2020. Increases will continue annually based on the cost of living as measured by the Consumer Price Index (CPI) for Colorado, and the most recent increase occurred in January 2021. Employees who are covered by both federal and Colorado state minimum wage laws are entitled to the higher wage. With the federal minimum wage at $7.25 and the Colorado minimum wage at $12.32, employers are required to pay the state amount. Keep in mind that some cities and towns may have their own local minimum wage requirements.

According to COMPS Order #37, employers who fail to pay an employee the minimum wage may be subject to civil action, complaints or investigation regarding violations and payments due to employees.

Colorado minimum wage for servers and other tipped employees

The Colorado server minimum wage differs from the regular minimum wage. As of January 1st, 2021, the current minimum wage for tipped employees in Colorado is $9.30 per hour. Employers are required to pay the higher minimum wage for employees who are covered by both federal and Colorado state minimum wage laws. The minimum wage for tipped employees is $2.13 per hour under federal law and $9.30 under Colorado state law, which means employers must pay tipped employees $9.30 per hour.

Tip credits

If the combined cash wages from the employer and the employee’s tips do not equal the regular minimum wage rate of $12.32, then employers must make up the difference. According to the Colorado Department of Labor and Employment (CDLE), “No more than $3.02 per hour in tip income may be used to offset the minimum wage of employees who regularly receive tips.”

Types of tipped employees

Tipped employees are defined as those who receive at least $30 per month in tip amounts in addition to their regular pay. Examples of these jobs include:

• Servers
• Bartenders
• Restaurant hosts
• Spa employees
• Hairstylists and estheticians

Pooling Tips

Employers are sometimes allowed to require that employees pool their tips. Employees contribute a portion or all of their tips to the pool, and the pooled funds are then divided equally among all eligible employees. Tips are often divided by hours worked or shifts completed. Employers are not permitted to receive tips from the pool.

Regardless of the pooled tips, employees must still be paid the full minimum wage. If an employee doesn’t normally earn tips but receives money from the tip pool, then they must still be paid the regular minimum wage.

Ensure that employees earn the minimum wage

It’s important to keep track of employee earnings so as to ensure they receive the minimum wage. Be aware that service charges and commissions don’t usually count as tips toward the minimum wage. Implementing a reporting system that accounts for both cash and credit card tips can ensure the accuracy of wages paid, payroll reports and tax amounts.

Colorado minimum wage overtime pay

The Colorado minimum wage for overtime applies to most employees who are also covered by COMPS. If employees are also covered by the FLSA, then employers must follow whichever law provides greater protection to employees.

The CDLE requires that employees entitled to overtime receive one and a half times the regular minimum wage if they work in excess of any of the following:

• 40 hours per workweek
• 12 hours per workday
• 12 consecutive hours regardless of the start and end times of the workday

Colorado minimum wage FAQs

What states have a $15 an hour minimum wage?

Many states are moving toward a $15 per hour minimum wage. Currently, only the District of Columbia has a minimum wage this high, at $15.20 per hour. Colorado is adjusting its minimum wage annually according to the CPI and may eventually reach a $15 minimum wage.

What is the minimum wage for a 16-year-old in Colorado?

According to COMPS, employees under the age of 18 who are considered unemancipated minors may be paid up to 15% less than the regular minimum wage. This means that a 16-year-old may receive a minimum wage as low as $10.47 per hour.

What is a livable salary in Colorado?

A living wage or salary is defined as a minimum amount of income necessary to meet basic needs such as housing, food, health care and other essentials. The World Population Review suggests that Colorado’s livable salary is $54,000 per year.

What is the minimum a salaried employee can make?

According to Rule 2.5 in COMPS, the minimum a salaried employee in Colorado can make is $40,500 per year. This is scheduled to be adjusted to $55,000 per year by 2024, with subsequent adjustments made based on the CPI.

What is the federal minimum wage?

The federal minimum wage for nonexempt employees under FLSA is $7.25 per hour compared to $12.32 in Colorado. The federal minimum wage for tipped employees is $2.13 compared to $9.30 in Colorado.