The Colorado minimum wage will increase by 26 cents, from $7.02 to $7.28 per hour, effective January 1, 2009. The minimum wage for tipped employees in the state will also increase by 26 cents, from $4.00 to $4.26 per hour.
Under Article XVIII, Section 15 of the Colorado Constitution, as amended in 2006, the Colorado minimum wage is adjusted annual for inflation, as measured by the Consumer Price Index for Colorado. That law also increased the Colorado minimum wage to $6.85 per hour in 2007, and capped the tax credit employers can take for tipped workers at $3.02 per hour.
The Colorado minimum wage is adjusted for inflation each year according to a formula by the Colorado Department of Labor and Employment. The Consumer Price Index (or CPI) for All Urban Consumers in the Denver-Boulder-Greeley metro area published by the federal Bureau of Labor Statistics is the source.
The CPI showed a 3.7% increase between the first half of 2007 and the first half of 2008 – the period specified.
As the cost of gas and food continues to rise, so does the inflation rate. That means the Colorado minimum wage for 2010 may show a similar increase.
Many observers warn that this increase in the Colorado minimum wage, coupled with tough economic times, may reduce the number of entry-level jobs available. Small business are particularly hard hit by this increase.
Under state law, the 2009 Colorado minimum wage increase must be paid to any employee entitled to the federal minimum wage, as well as most other workers in the state. When an employee is covered by both state and federal laws, he or she is entitled to the greater benefit. This means that while the federal minimum wage is currently $6.55 per hour, effectively everyone covered by it must be paid $7.26 in Colorado, beginning at the first of the new year.
The new 2009 Colorado minimum wage rate was published by Donald J. Mares, Executive Director of Labor, and head of the Colorado Department of Labor and Employment.
