Colorado Minimum Wage and Salary Threshold Increases, Beginning January 1, 2023

Ashley Graves, Law Clerk

            There are notable adjustments to Colorado’s wage laws beginning January 1, 2023:          

Colorado’s minimum wage will increase from $12.56 per hour to $13.65 per hour.  Governor Polis also signed a law permitting local governments to set higher minimum wages than the state minimum.[1]  For example, Denver’s minimum wage is set to increase from $15.87 per hour to $17.29 per hour.  Additionally, minimum wage for tipped food and beverage employees will increase to $14.24 per hour with a tip credit if the employees earn at least $3.02 in tips per hour.

Additionally, regarding overtime exemptions under the Colorado Overtime and Minimum Pay Standards Order, starting on January 1, 2023, an individual must earn $961.54 per week (or $50,000 annually) to qualify as an administrative, executive, supervisor, or professional employee, in addition to meeting the relevant job duty criteria for the exemption at issue.  

Key Takeaways

            Colorado employers should note that state and local minimum wages will change (and likely increase) annually.[2]  Employers should also be aware of changing exemption requirements for employees, and should be cautioned against relying on the federal minimum salary threshold for the analogous exemptions under the Fair Labor Standards Act, since Colorado’s minimum salary threshold outpaces the federal threshold.  Employers will face penalties, which are also set to increase January 1st, for failing to comply with minimum wage and overtime exemption requirements.  

[1] HB19-1210

[2] Colorado government bases its minimum wage adjustments on the Consumer Price Index in the Denver Metro area. The Denver Department of Finance also uses the Consumer Price Index to calculate its annual increases.