Colorado Reduces Minimum Wage in 2010

For the first time, a state minimum wage will be reduced.

On January 1, 2010 the Colorado minimum wage will be reduced by 4 cents, from $7.28 per hour to $7.24 per hour. However, most Colorado employers will be required to pay $7.25 per hour under the federal minimum wage, the Fair Labor Standards Act.

The minimum wage for tipped employees will decrease from $4.26 per hour to $4.22 per hour according to the Colorado Division of Labor & Employment. If the employee does not average $3.02 per hour over the payroll week, the employer must pay the difference.

The Colorado minimum wage is adjusted annually for inflation. Unlike most states, however, when the cost of living goes down – as it has in the past year – the Colorado minimum wage can be reduced. While a variety of states including Washington, Oregon and Florida increase the minimum wage annually, there is no provision for the automatic reduction of minimum wage in most states.

Colorado employers need to update their state minimum wage posters immediately.

Although the Colorado minimum wage reduction is only 4 cents, it is far better than the annual increases of 20 cents or more in recent years. In 2009, for example, the Colorado minimum wage increased by 26 cents from $7.02 per hour to $7.28 per hour. In 2007, the Colorado minimum wage increased by 17 cents per hour from $6.85 to $7.02.

This is welcome news for beleaguered Colorado employers everywhere, after almost two years of depressing economic events.

The Colorado minimum wage is based on the CPI or Consumer Price Index for the Denver-Boulder-Greeley metro area, published by the US Bureau of Labor Statistics, the BLS.