Technical Update 62 - Colorado's Minimum Wage Supersedes Current Federal Minimum Wage
December 29, 2020
In November 2016, Colorado citizens voted for Amendment 70, which raises the state minimum wage. The minimum wage is the lowest wage that can be paid to most workers under the law. Since July 24, 2009, the federal minimum wage for covered nonexempt employees is $7.25 per hour. The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA). The federal minimum wage law supersedes state minimum wage laws only where the federal minimum wage is greater than the state minimum wage. Alternatively, in states like Colorado, where the state minimum wage is greater than the federal minimum wage, the state minimum wage prevails, and employees are entitled to the higher minimum wage.
Amendment 70 posed the following question to Colorado voters:
Shall there be an amendment to the Colorado constitution increasing the minimum wage to $9.30 per hour with annual increases of $0.90 each January 1 until it reaches $12 per hour effective January 2020, and annually adjusting it thereafter for cost-of-living increases?
The Amendment passed by 55.4% resulting in the state minimum wage rising from $8.31 per hour to $9.30 on January 1, 2017. Because the Amendment raises the rate in stages, each year since has seen an increase as shown in the following table.
Table: Minimum wage increases by year.
The minimum wage reached $12 in 2020, so from now on, the minimum wage will adjust based on the annual cost of living increases per the Colorado Constitution. After this year, the Colorado minimum wage will be adjusted annually for inflation as measured by the Consumer Price Index. The inflation adjustment is based on the Consumer Price Index for All Urban Consumers (CPI-U). The cost-of-living adjustment increases by .32 for 2021.
Local Minimum Wage Laws
In May of 2019, Colorado lawmakers passed House Bill 19-1210, which gives local jurisdictions the power to set their own minimum wage, subject to certain restrictions. The bill went into effect on January 1, 2020.
What This Means for Counties
Effective January 1, 2021, Colorado will raise its minimum wage rate to $12.32 per hour. Counties should begin paying all minimum wage employees the new rate of $12.32 for regular employees and $9.30 for tipped employees unless and until they enact a local minimum wage law. For more information, contact CTSI at 303 861 0507.
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In November 2016, Colorado citizens voted for Amendment 70, which raises the state minimum wage. The minimum wage is the lowest wage that can be paid to most workers under the law. Since July 24, 2009, the federal minimum wage for covered nonexempt employees is $7.25 per hour. The federal minimum wage provisions are contained […]
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