Local Minimum Wages

Division of Labor Standards and Statistics
707 17th Street, Denver, CO 80202 | 303-318-8441
www.ColoradoLaborLaw.gov | www.LeyesLaboralesDeColorado.gov

Interpretive Notice & Formal Opinion ("INFO") #19: Local Minimum Wages

Overview

Any local government ("LG") in Colorado may adopt a local minimum wage ("LMW") for individuals performing work within its jurisdiction under Colorado H.B. 19-1210, C.R.S. 29-1-1401(1). This INFO explains how an LMW works: where and how it can be adopted and implemented, whom it can cover, and what amounts it can be.

WHERE Can a Local Minimum Wage Be Adopted? (C.R.S. 29-1-1401(2))

An LMW can be adopted by an LG that is any one of the following:

• City (including a home rule or territorial charter city); or
• Combined city and county; or
• County[^1] (including a home rule county); or
• Town.

WHAT Can an LMW Be? (C.R.S. 8-6-101(3)(a)(I), (7))

• Amount. LMWs may exceed other applicable minimum wages, federal (as of this INFO, $7.25) or Colorado (annually adjusted for inflation; $15.16 in 2026, and see INFO #1 for past years).
• Annual increases can't be more than 15% of the prior year's minimum wage. If an LG had no LMW the prior year, then the 15% is from the prior year's applicable Colorado minimum wage.[^2]

Example 1: In 2024, Gotham City, Colorado, enacts an LMW effective as soon, and rising as high, as possible. Its highest possible LMW is $16.58 in 2025 (15% above the 2024 Colorado minimum wage of $14.42), and $19.06 in 2026 (15% above its 2025 LMW), and $21.91 in 2027.

• Inflation adjustment. The state minimum wage adjusts by the Consumer Price Index ("CPI") from the federal Bureau of Labor Statistics for the Denver-Aurora-Lakewood region, except deflation can't yield a decrease. To finalize the adjustment in time for advance notice of the new minimum wage each January 1st, Colorado applies the CPI from July 1 through June 30. Recent annual CPI increases were 1.9% (through mid-2021, for the 2022 minimum), 8.6% (mid-2022, for the 2023 minimum), and 5.6% (mid-2023, for the 2024 minimum).[^3] But an LG is free to choose whether and how to adjust its LMW.

Example 2: To limit employer and employee uncertainty, Gotham City requires adjustment by the CPI for the Denver-Aurora-Lakewood region, but with a minimum of 2% and maximum of 6%. For 2022 to 2024, the adjustments would've been 2.0% for 2022 (up from the 1.9% CPI), 6.0% for 2023 (down from the 8.6% CPI), and 5.6% for 2024 (unadjusted because it is within the 2.0%-6.0% range Gotham City chose). That is permissible, given LG discretion on annual adjusting.

• Overtime. Any minimum wage becomes 50% higher for hours beyond 40 per week, or 12 per day, under state law overtime requirements, except for employers or employees who are exempt from overtime rules.[^4]

• Tip Offset or Credit. An LMW must allow a tip offset — often called a tip credit — equal to or greater than[^5] what the Colorado Constitution requires for the statewide minimum wage, which is $3.02 per hour, but:

• tip credits can't let employers pay direct wages (without tips) below the state tipped minimum wage (which is $3.02 below the state minimum wage);
• an LMW must allow a tip credit for an employer that "prepares and offers for sale food or beverages for consumption," but may allow a tip credit for other types of employers of tipped employees; and
• tip credits can be applied only in situations in which state law allows a tip credit — for example, tip credits can be applied only to "employees who regularly receive tips."[^6]

Example 3: In a future year when the Colorado minimum wage is $23.02, Gotham City adopts a $30.00 LMW, without specifying a tip credit. The maximum tip credit employers in Gotham City can apply is $3.02.

Example 4: Same as example 3, except that Gotham City wishes to adopt a tip credit in a different amount than $3.02. It can, but:
- the tip credit must be at least $3.02, and no greater than $10.00, to ensure that employers must pay direct (non-tipped) wages of at least the $20.00 state tipped minimum wage; and
- whatever tip credit Gotham City chooses, it can't apply to employers who fail any state law requirement, such as when:
(a) servers receive insufficient tips to raise total pay to the full applicable minimum wage (here, the $30.00 LMW), or
(b) part of servers' tips are diverted (e.g., in required tip sharing or pooling) to non-tipped employees, or to the employer itself.

WHO Is Subject to an LMW? (C.R.S. 8-6-101(3)(a), 29-1-1401(1))

• Employees covered: An LMW "shall" cover "all adult employees and emancipated minors, whether employed on an hourly, piecework, commission, time, task, or other basis" — as long as they work (or are expected to work) at least four hours in a week in the jurisdiction.
• Time covered: LMWs cover time "while physically within" an LG's jurisdiction, but not time in jurisdictions "solely for ... traveling through ... from a point of origin ... [and] to a destination outside" the jurisdiction, without work-related stops in it (refueling, meals, or personal errands don't count as such stops).
• Unemancipated minors are covered by the state minimum wage, with permission for a 15% reduction, and hours limits. LGs can choose what if any rate applies to unemancipated minors. The 15% reduction for minors doesn't apply in any jurisdiction with an LMW (with one exception[^7]).

HOW Is an LMW Adopted, Enforced, and Reported?

Adoption (C.R.S. 8-6-101(3), (6), (10)):

• Before enactment, an LG must consult surrounding LGs and stakeholders as state law requires.[^8]
• LGs should consult the Division before or while drafting an LMW, to avoid inconsistencies with state or federal law, or for guidance from Division subject-matter experts. LGs should also inform the Division after an LMW is enacted or amended.
• An LG then can adopt an LMW through its governing body, or by initiative or referendum.
• New LMWs must take effect January 1st, the day of each year's state minimum wage adjustment.
• Once 10% of LGs enact an LMW, others require Colorado General Assembly authorization.[^9]

Enforcement (C.R.S. 8-6-101(3)(b)):

• An LG may enforce its LMW (but does not need to, as noted below) in various ways, such as:
• writing into the LMW a private right to sue to enforce the minimum wage;
• writing into the LMW a list of, or permitted categories of, remedies for violations;[^10] or
• authorizing LG officials to investigate and issue orders to remedy violations.
• An LG is not required to enforce its LMW. It can just set an LMW, without other provisions that — like enforcement or remedies — are already covered by state law.
• Enforcement: Colorado allows "state law complaints by employees who claim entitlement to ... local minimum ... wages" — because state law covers failure to pay any amount required by any source. For example, if an agreement, state law, or local law requires a $20 rate, then paying less violates state wage payment law, so a state law wage complaint can be filed, in court or this Division.[^11]
• Remedies: The Colorado Wage Act, Article 4 of C.R.S. Title 8, details remedies for wage violations. For more details on how wage claims are fined, decided, and enforced, see the INFO #2 series.

Reporting by the Division (C.R.S. 8-6-101(8)). To the extent feasible (e.g., to the extent data are available for any localities that newly adopt an LMW), when new LMWs are adopted, the Division will update Colorado's Local Minimum Wage Report ("Report"), with two types of data:

(1) "The location, nature, and scope of enacted local minimum wage laws"[^12] — current and historical rates by jurisdiction:

(2) "Economic data, including jobs, earnings, and sales tax revenue" in jurisdictions enacting an LMW and "neighboring jurisdictions, relevant regions, and the state," as feasible. Per the 2023 Report, below are data from 2019 (before Denver's LMW took effect January 1, 2020) to 2022 on (A) wages, (B) unemployment rates, and (C) sales tax revenues — in Denver and other localities.[^18]

(A) Wages: "Each of the first three years since its local minimum wage took effect (2020-2022), Denver maintained ... stronger wage growth than Colorado and comparator jurisdictions .... Denver wages rose, and also rose more than those of all Comparator Jurisdictions and the state," starting in the first quarter of 2020, when, for example, Denver wages "increased compared to the state, from $302.00 higher than the state average to $339.00 higher, a 12.3% increase."

(B) Unemployment: In January-February 2020, before COVID-19 but after Denver's minimum wage took effect, Denver's "unemployment rate remained lower than ... Comparator Jurisdictions, ... with only Rural Counties ... lower," and Denver's "rise in unemployment ... was smaller than the statewide rise." Denver had "worse unemployment ... not after adopting a local minimum wage, but months later after ... greater impact from COVID-19" than Colorado overall, given the "strong correlation between unemployment and higher COVID-19." In 2021-2022, Denver unemployment dropped as its LMW rose while COVID-19 declined (e.g., the shutdowns that increased unemployment were mainly in 2020), including relative to other localities and Colorado overall.

(C) Sales Taxes: In 2020, "Denver's [per capita state] sales tax revenues did not suffer relative to other parts of the state ... after it adopted its minimum wage," but instead dropped "only after the impact of COVID-19.... Most Comparator Jurisdictions experienced a larger sales tax decrease than Denver in January-February 2020." Then, in 2021-2022, "as Denver's local minimum wage grew increasingly higher ... its sales tax revenues continued growing more than Colorado's and ... all Comparator Jurisdictions'."

Outreach. The Division will update its website and published guidance, at least annually with each year's minimum wages (state and local), and whenever LGs enact or materially amend LMWs.

For More Information: Visit the Division website, call 303-318-8441, or email [email protected].

[^1]: A county LMW covers only "unincorporated" areas: it excludes a municipality (city, town, etc.) that is "incorporated," meaning a municipality with its own government, unless the county reaches an intergovernmental agreement, with one or more municipalities within it, to apply the LMW in those municipalities as well. (C.R.S. 8-6-101(3)(c)(I).)
[^2]: State law allows the greater of a 15% or $1.75 increase — but 15% is always higher, making that the relevant limit.
[^3]: For years before 2021, minimum wages rose by not CPI, but larger fixed increases yielding 8.1%-11.9% increases.
[^4]: See INFO #1 (overtime and other rules in the Colorado Overtime & Minimum Pay Standards ("COMPS") Order).
[^5]: Tip credits in Colorado are all equal to $3.02 per hour, except for the tip credit in Edgewater, which, for 2026, is $4.67 per hour.
[^6]: See the INFO #3 series (on different types of wages, with content on how and when tip credits apply).
[^7]: Denver allows the 15% reduction for only unemancipated minors in "city-certified youth employment programs."
[^8]: Specifically: chambers of commerce; businesses — small, large, and with tipped workers; workers; unions; and community groups. By way of example: the Division consults stakeholders by inviting all known key stakeholders, and selected individual businesses and workers, to a public meeting (which may be combined with another regularly scheduled public meeting), leaving enough time for comments or questions from all interested in participating.
[^9]: In applying the 10% requirement: (1) An LG enacting an LMW before 10% of LGs do so can amend it without this authorization. (2) The 10% limit counts it as only one LMW if: (a) a county and any other LG(s) within it enact LMWs (only the county's ... counts toward the 10%); or (b) LGs enter an intergovernmental agreement on "enforcement or administration of local minimum wage policies," such as to adopt and identically adjust joint LMWs.
[^10]: Wage law remedies may include, but are not limited to: unpaid wage awards; liquidated damages (a percentage, or multiple, of the unpaid wages); fines and penalties; interest; and costs and attorney fees for prevailing employees.
[^11]: Colorado Overtime and Minimum Pay Standards ("COMPS") Order, 7 CCR 1103-1 (such complaints allowed because "the 'unpaid wages' recoverable in a state-law claim include '[a]ll amounts for labor or service performed' that is 'earned, vested, and determinable'") (quoting the Colorado Wage Act, C.R.S. 8-4-101(14)).
[^12]: For each LMW, the minimum wage with the tip credit follows the full LMW.
[^13]: See note 1. This means the Boulder County LMW does not apply to its 10 incorporated municipalities: four cities — Boulder (which has its own minimum wage, noted above), Lafayette, Longmont, and Louisville; and six towns — Erie, Jamestown, Lyons, Nederland, Superior, and Ward. The Boulder County LMW does apply to its unincorporated municipalities — those without their own government, which includes any areas other than the 10 listed above. Examples: Niwot; Eldorado Springs; Eldora; Allenspark; Gold Hill; Hygiene; Coal Creek Canyon; and Gunbarrel (other than any portions of Gunbarrel within the City of Boulder).
[^14]: Each upcoming year's new Colorado minimum wage is calculated in late summer, then incorporated into Colorado law through the Division's annual fall rulemaking. See the Division's Labor Rules page.
[^15]: The City of Edgewater will rise annually by 10% through 2028, then by inflation or (if greater) to match the Denver LMW.
[^16]: The City of Boulder will rise 8% annually in 2025, 2026, and 2027, then by inflation each year afterwards.
[^17]: Boulder County will rise by inflation each year afterwards.
[^18]: Available "neighboring" data: for earnings, neighboring counties; for unemployment and sales tax revenue, neighboring cities. For methodology details, fuller discussion, and all 2019-2022 data, see the 2023 Report.

INFOs are not binding law, but are the officially approved Division opinions and notices on how it applies and interprets various statutes and rules. The Division continues to update and post new INFOs; email [email protected] with any suggestions. To be sure to reference up-to-date INFOs, rules, or other material, visit ColoradoLaborLaw.gov. Last updated December 18, 2025